Unfair dismissal and internal appeal

Severe defects of an internal appeal rendered capability dismissal unfair.

Background

Mr Milrine worked as an HGV driver for DHL from 2013 until his dismissal for medical incapability in 2022, after over two years’ absence caused by vertigo and vestibular migraines.

A tribunal held that the dismissal fell within the range of reasonable responses but also found the internal appeal process was seriously defective. Mr Milrine appealed.

EAT decision

The appeal was allowed.

The EAT summarised the failings at the appeal stage. The nominated appeal manager declined to hear the appeal. His replacement did not attend the rescheduled hearing, leaving Mr Milrine and his union representative waiting on site. The HR business partner then placed the onus on Mr Milrine to choose the appeal manager and propose dates, without confirming this to him in writing. Mr Milrine began early conciliation with ACAS believing that prevented continuation of the internal appeal and DHL did not follow up in writing to check intentions. The internal appeal never took place.

The EAT set out the following principles drawn from case law:

The starting point, and the focus throughout, must always be on the statutory test set out in ERA 1996, s. 98 – and this requires an examination of the dismissal process as a whole, including the internal appeal stage.
An appeal is an important and normal component of fairness. This is underlined, as a matter of good employment relations, by the ACAS Code of Practice.
A failure by an employer to offer an appeal, or an appeal that is procedurally defective, may render unfair a dismissal which, by sole reference to the initial decision to dismiss, would otherwise have been fair. Put another way, there is no requirement that an internal appeal is only relevant where it is capable of curing an earlier defect or otherwise making a difference to the outcome.
It is an error of law for a tribunal to exclude from its consideration whether a failure by an employer to offer an appeal, or an appeal that is procedurally defective, involves unreasonableness for the purposes of the statutory test. It should be part of the tribunal’s overall assessment.
A failure by an employer to offer an appeal, or an appeal that is procedurally defective, does not automatically or inevitably require a finding of unfair dismissal. It is simply one of many factors for the tribunal to consider. The statutory imperative is to consider the circumstances of each case; in some cases, it can properly be concluded that an appeal would have been futile, such that a failure to offer an appeal would not make the dismissal unfair (see, for example, Moore v Phoenix Product Development).
If the tribunal considers that the employer acted unreasonably in failing to offer an appeal, or by conducting a procedurally defective appeal, but further considers that a proper appeal would have made little or no difference to the outcome, that should impact on remedy rather than liability.

The tribunal had failed properly to analyse the appeal-stage defects as part of the overall statutory assessment of fairness. While an absence or defect in an appeal does not automatically render dismissal unfair, the more serious the defects, the greater the need for clear reasoning.

Comment

This case is a useful reminder to employers of the purpose of an appeal and that a failure at the appeal stage can make an otherwise fair dismissal, unfair. Although it is open to an employer to argue that an appeal would have made no difference to the outcome, this will not prevent it being an unfair dismissal; it means that the amount of compensation may be reduced as a result.