In the previous two posts (here and here) I summarised the effect of the Orr judgement on the fairness of dismissals and how the the effect of Orr on how an employment tribunal will determine the reason for dismissal has been tweaked by the Supreme Court’s decision late last year in Jhuti. I think ‘tweak’ is the right term, as Jhuti is by no means a radical decision.

In this post I want to explore the implications of the decision and also consider whether it really resolves the problem it was addressing. The problem was ably put forward in Sedley LJ’s dissent in Orr which is again worth quoting:

The relevant state of mind [of the decision maker] is not, with great respect to Lord Justice Aikens, the “real reason” for the dismissal. It is the totality of information which the employer holds when deciding whether or not to dismiss an employee. No corporation, and certainly not a public law body such as the respondent, can ordinarily plead that its left hand did not know what its right hand was doing.

Of course, it was the Respondent’s case in Orr, as it was in Jhuti that the decision maker’s ignorance really was a defence – that the left hand did not know the improper motives of the right hand and, therefore, the dismissal was fair. This belies the fact that when making a unfair dismissal claim an employee is not bringing a case against an individual manager but the employer itself. And so there are surely good reasons that it is the employer’s knowledge rather than an individual officer of the employer’s knowledge that should be determinant. In large part for policy reasons that is not the approach unfair dismissal law has followed.

Determining the reason for dismissal. 

The Supreme Court’s decision in Jhuti did not interfere with the general position in Orr that is is the knowledge of the employer’s representative rather than the whole corporate body that determines the reason for dismissal. However, it did add an important qualification that even if the decision maker conducts a disciplinary proceeding in good faith if it was engineered by a manager in the immediate management chain then for improper purpose (such as whistleblowing) then that reason is transposed as the reason for dismissal. This is an important qualification.

Other Knowledge?

The decision may also be of relevance in other contexts. Suppose an employee is dismissed for misconduct but denies the misconduct. The investigation into the misconduct is nonetheless a reasonable one and the decision manager genuinely believed in the employee’s guilt etc. In the ordinary course of events that would be a fair dismissal.

Now suppose that a company director who was several rungs higher than the employee (what Jhuti calls the “hierarchy of responsibility” and decision maker and had prior knowledge of the misconduct allegation against the employee and had received but ignored a written letter from another employee confessing to the misconduct the other employee had been accused of. Here, again, there is nothing but decisions made in good faith by the decision maker. Would that dismissal be unfair? This is not a case concerning the reason for dismissal which was the focus in Jhuti but I think it would be likely to be applicable and, if this were to be established in evidence then there is a reasonable liklihood that a tribunal would determine this to be an unfair dismissal. Time will tell whether that is indeed the case.

However, even if it is it is not clear to me this solves the problem. Sedley LJ argued in his dissent that the decision maker (presaging – much more eloquently – the tenor of my argument above) that the decision maker

has to be taken to know not only those things which he or she ought to know but any other relevant facts the employer actually knows [including] facts known to persons who in some realistic and identifiable way represent the employer in its relations with the employee concerned. If, as would seem inescapable, relevant things known to a chief executive must be taken to be known to both the corporation and its decision-maker, the same is likely to be the case as the chain of responsibility descends. It is equally likely not to be the case when one reaches the level of fellow employees or those in more senior but unrelated posts.

I certainly accept that unless it should have been accessible by route of a ‘reasonable investigation’ there is a reasonable case that the knowledge of “fellow employees” should not be usually deemed to be knowledge of the employer. But, equally, it is not clear to me that limiting this to the ‘hierarchy of responsibility’ is good enough unless this is interpreted expansively to include associated and even junior employees with a specific vocational obligation for personnel matters. It seems to me that some junior personnel will frequently – in the course of their roles – have knowledge relevant to a disciplinary accusation and have knowledge of the existence of ongoing misconduct investigations (HR officers are a case in point). If such an officer has knowledge relevant to a dismissal decision but does not volunteer this should this not also be knowledge held within the hierarchy of responsibility?

At present that issue is not clear and, for that reason, although Jhuti is indeed a positive step forward it is – or at least I hope it is – far from being the last word on the subject.

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