Knowledge and power

Francis Bacon said that “knowledge is power”, but if an employer delegates the power to dismiss to a manager, to what extent is that manager deemed to have knowledge of all the relevant facts?  Accordingly to the Court of Appeal, a manager undertaking a dismissal is not deemed to know everything that is known to the employer generally, or all its employees.  John Moore reports.

In this article...

• The background
• The facts
• The decision
• What does this mean for me?

 

The background

In order for a dismissal to be fair, an employer must have a ‘potentially fair reason’ for dismissal under section 98(1) of the Employment Rights Act 1996 (ERA), and must demonstrate that it acted reasonably in dismissing the employee for that reason.  The relevant test is set out in section 98(4) of the ERA and is whether: "... the employer acted reasonably or unreasonably in treating [the reason for dismissal] as a sufficient reason for dismissing the employee” and this must be “determined in accordance with equity and the substantial merits of the case."

The employment tribunal must also decide whether the employer’s decision to dismiss was within the ‘range of reasonable responses’ open to a reasonable employer in those circumstances. 

Furthermore, a tribunal is only permitted to take into account facts known to the employer at the time it took the decision to dismiss.
 
In the case of Orr v Milton Keynes Council , the Court of Appeal had to grapple with the thorny question of what a dismissing manager is deemed to know when making the decision to dismiss – as an agent of the employer, should he or she be imputed with all the relevant facts which were known to the employer generally as a ‘body corporate’; or, is the fairness of the dismissal assessed on the basis of the information available to the individual dismissing manager, at the time of the dismissal, even if relevant facts were deliberately concealed from that manager?

The facts

Mr Orr was employed by Milton Keynes Council as a youth worker.  Against the express instructions of his manager, Mr Orr discussed with some young people the details of a recent sexual assault.  During a later discussion with his manager, Mr Madden, about his working hours, Mr Orr had become rude and truculent towards Mr Madden.

The Council commenced disciplinary proceedings against Mr Orr, overseen by a group manager, Mr Cove.  A full investigation was carried out, and Mr Madden’s statement formed a significant part of the evidence against Mr Orr.  Mr Orr did not attend the disciplinary meeting.

Mr Orr was summarily dismissed for the two incidents set out above. It was not until after the decision to dismiss had been made that it was discovered that Mr Madden had concealed from the dismissing officer that

1. the conversation in which Mr Orr had been rude to Mr Madden was sparked by an underhand attempt by Mr Madden to reduce Mr Orr’s working hours; and
2. during the course of the altercation, Mr Orr started to use Jamaican patois and Mr Madden had said: “You lot are always mumbling…I can’t understand a word you lot are saying.”

An Employment Tribunal found that, although the comments made to Mr Orr regarding his use of patois were racist, the dismissal was fair because it was a reasonable response to what was known to the dismissing officer at the time.  The Employment Appeal Tribunal upheld the tribunal’s decision, and Mr Orr appealed to the Court of Appeal.

The decision

The Court of Appeal rejected Mr Orr’s appeal and held that Mr Orr’s dismissal was fair.

In reaching its decision, the Court came to the following conclusions

• the Council had undertaken as full and fair an investigation as was reasonable in the circumstances
• it had been entitled to accept Mr Madden’s evidence
• the decision to dismiss had fallen within the ‘band of reasonable responses’ available to the Council
• for practical reasons, it must be the dismissing manager’s knowledge of matters at the time of the dismissal which is relevant.  Even if another senior employee is aware of facts that would exonerate an employee, this knowledge cannot be imputed to the dismissing manager.  Although section 98 of the ERA requires ‘the employer’ to act reasonably, this does not mean that all the employer’s employees are deemed to be of one mind when making a decision to dismiss; it is only the actual knowledge of the individual manager making the decision to dismiss that is relevant.

The Court of Appeal noted, as an aside, that the ERA must be interpreted in a manner that makes it capable of practical application in the workplace, regardless of the size of the employer.  Accordingly, for large employers, it must be workable for them to delegate day-to-day employment decisions to an appropriate manager.

What does this mean for me?

This decision is good news for employers, as it confirms that the level of knowledge required for a dismissing manager to make a decision to dismiss is limited to their own actual knowledge, following a fair and reasonable investigation.  If a dismissing manager were required to uncover facts which another manager had deliberate concealed, then this would place a huge burden on the investigation.

However, it is important to note the Court of Appeal’s comments regarding the fairness and reasonableness of the Council’s investigation.  The Court of Appeal may well have come to a different conclusion if the investigating manager had ‘closed his mind’ to the possibility that information had been concealed from him – for example, if he had reason to suspect that Mr Madden’s evidence may have been unreliable.  This highlights the importance of ensuring that a thorough and fair investigation is carried out, so that an employer may confidently rely on the facts available to the manager to whom it has delegated the decision to dismiss.