Unraveling Unfair Dismissal in the UK: The Case of Stephen Mullen and Section 98(4) of the Employment Rights Act, 1996

Introduction

Understanding the complexities of unfair dismissal claims is crucial in employment. The case of Stephen Mullen offers an insightful look into the application of legal principles, such as those outlined in section 98(4) of the Employment Rights Act, 1996. This article explores the details of Mullen's case, highlighting the allegations, investigations, findings, and judicial decisions, while referencing specific legislation.

Section 98(4) of the Employment Rights Act 1996 states that:

"The determination of the question whether the dismissal is fair or unfair (having regard to the reason shown by the employer) —

(a) depends on whether in the circumstances (including the size and administrative resources of the employer’s undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee, and

(b) shall be determined in accordance with equity and the substantial merits of the case."

In other words, Section 98(4) of the Employment Rights Act 1996 outlines the statutory fairness test that an Employment Tribunal must apply when determining whether a dismissal was fair. According to this section, the determination of whether a dismissal is fair or unfair depends on whether the employer acted reasonably or unreasonably in the circumstances. 

Background of the Case

Stephen Mullen was employed at Glasgow Royal Infirmary in the UK from November 2001 until his dismissal in October 2021. By 2018, he was a Supervisor in the Endoscopy Decontamination Unit (EDU). His employment was terminated following an incident on March 11, 2021, where he was accused of aggressive and threatening behavior towards a technician. This allegation set off a chain of investigations that eventually led to his dismissal for gross misconduct on October 28, 2021.

The Investigation

Following the complaint, Mullen's line manager, Ms. Ward, conducted an initial investigation, which led to a formal inquiry by Ms. Phyllis Watt. Watt's investigation, spanning from April to July 2021, included interviews with eyewitnesses, the complainant, and Mullen himself. Testimonies, particularly from Mr. Rankin, supported the technician's account. During this period, Mullen was on leave and later on sick leave until early October 2021.

Watt's report, submitted on August 11, 2021, recommended a formal conduct hearing, which was approved by Mr. McIvor, the EDU Service Manager. Mullen was notified of the allegations and the disciplinary hearing on August 26, 2021. The hearing, delayed due to witness availability, occurred on October 16, 2021. Mullen attended with his union representative. The disciplinary panel, chaired by Mr. William Hunter and including Mr. McIvor, found the allegations against Mullen substantiated, leading to his dismissal.

Tribunal Findings

Mullen's appeal against his dismissal was unsuccessful, prompting him to file a claim for unfair dismissal and arrears of pay. The Employment Tribunal (ET) initially upheld his claim, citing several procedural deficiencies:

1. Delayed Notification: The ET noted that Mullen was not promptly informed of the allegations, violating the hospital's bullying and harassment policies and breaching natural justice principles.

2. Prolonged Investigation: The investigation's length was deemed unreasonable, contrary to the hospital's conduct policy, which mandates timely investigations.

3. Conflict of Interest: Mr. McIvor's involvement in both the investigation and as a panel member was a conflict of interest, breaching the policy that panel members should have no prior involvement.

4. Uncertainty in Dismissal Reasons: The ET found inconsistencies in the reasons provided for Mullen's dismissal, raising doubts about the true reason for the decision.

The ET ruled these procedural flaws significant enough to render Mullen's dismissal unfair under section 98(4) of the Employment Rights Act, 1996, which assesses whether the employer acted reasonably in treating the reason for dismissal as sufficient.

Appeal Tribunal's Decision

The Employment Appeal Tribunal (EAT) provided a different perspective, focusing on the employer's genuine belief in Mullen's misconduct and the reasonableness of their actions:

1. Genuine Belief in Misconduct: The EAT emphasized that the employer's belief in Mullen's misconduct was genuinely held and based on reasonable grounds following a thorough investigation, aligning with section 98(4) of the Employment Rights Act, 1996.

2. Separation of Issues: The EAT criticized the ET for conflating the reason for dismissal with procedural fairness. Once misconduct was established and the employer's belief was genuine, procedural deficiencies should not undermine the dismissal's legitimacy.

3. Range of Reasonable Responses: The EAT concluded that the dismissal fell within the range of reasonable responses available to the employer, even with procedural lapses, as outlined in section 98(4).

Consequently, the EAT set aside the ET's judgment of unfair dismissal and the consequent awards, including notice pay, and substituted a judgment that Mullen's dismissal was fair.

Key Lessons

The Stephen Mullen case highlights several important lessons for employers and employees:

1. Comprehensive Investigation: Employers must ensure that misconduct investigations are thorough, impartial, and timely. A genuine belief in the misconduct is crucial, as mandated by section 98(4) of the Employment Rights Act, 1996.

2. Procedural Fairness: While procedural lapses can impact the fairness of a dismissal, they must be significant enough to undermine the decision-making process. Minor lapses do not necessarily render a dismissal unfair.

3. Clear Communication: Employers should promptly and transparently communicate allegations and disciplinary actions. Employees should be informed of the process and their rights at the earliest opportunity.

4. Impartial Disciplinary Panels: Those involved in the initial investigation should not serve on the disciplinary panel to maintain fairness.

5. Reasonable Responses: Employers' actions should be assessed within the context of the incident. Dismissals for gross misconduct, even with procedural errors, can be fair if they fall within the acceptable range of responses as per section 98(4).

Notice Pay and Polkey Reduction

The Employment Tribunal did not identify any separate issue relating to notice pay in its list of issues for determination at the full hearing on merits and remedy (ET, para. 75). Specifically, it did not identify any claim for breach of contract under the Employment Tribunals Extension of Jurisdiction (Scotland) Order, 1994. Instead, the Tribunal treated notice pay simply as an aspect of the claim for compensation for unfair dismissal (ET, paras. 75 and 134ff). This approach was understandable given the framing of the ET1. However, it was peculiar that the Tribunal then made a distinct award of notice pay separately from the compensatory award and also made a Polkey reduction from the latter but not from the former. For the purposes of this appeal, it is sufficient to note that the part of the Tribunal’s award referred to as “notice pay” was entirely dependent on its finding that Mr. Mullen's dismissal was unfair.

A claim for unfair dismissal may succeed on the grounds that the employer failed to follow a fair procedure in every respect. However, in such a case, it is still possible for an employer to argue that even if a fair process had been observed, the employee would still have been dismissed. This can lead to any award for compensation being reduced—a ‘Polkey reduction’—based on the tribunal’s view of the likelihood of dismissal occurring. The actual reduction is a matter for the discretion of the employment tribunal and can range from nil to 100%. This principle was established in the case of Polkey v AE Dayton Services Ltd [1987].

Conclusion

The Stephen Mullen case underscores the intricate dynamics of unfair dismissal claims, emphasizing the importance of fair procedures and genuine beliefs in misconduct. For employers, it highlights the need for thorough, transparent, and impartial investigations. For employees, it underscores the importance of understanding their rights and the nuances of procedural fairness. This case provides valuable insights into maintaining a fair and just workplace, balancing the rights and responsibilities of both employers and employees, in line with section 98(4) of the Employment Rights Act, 1996.