Here’s a question. Employee Mr U is accused of sexually assaulting A. She goes to the Police about it and simultaneously U’s employer starts an investigation into his conduct. The investigator J concludes that there is a case to answer, based in part on A having gone to the Police. On the back of J’s report, once issued, a disciplinary process is convened and U is summarily dismissed by a separate manager, F. Sounds all fair enough so far, yes?

However, between the submission of J’s investigation report and F’s decision to dismiss, there was a development – after some hesitation about her story had been expressed by the Police, A withdrew her criminal allegations (as in “I don’t remember it happening”, rather than “It did happen but I don’t wish to pursue it”). J knew this but didn’t tell F before the dismissal decision was reached.

That left decision-maker F with genuine and reasonable grounds to conclude that the assault had indeed happened. She had followed a reasonable procedure so far as she was aware and reached a decision which, in all the circumstances, was clearly within the range of reasonable responses. Surely she (and hence the statutory fairness of the dismissal) could not be criticised for not taking into account information, the retraction of A’s complaint, of which she was unaware? After all, it is well established that an employer’s belief in an employee’s misconduct can be reasonable and genuine for fair dismissal purposes even if objectively wrong. Assuming that there had been a fair investigation, as here, whether its “wrongness” arose from mistake, ignorance or incomplete information in the hands of the decision-maker surely did not matter. The Employment Tribunal in Uddin –v- London Borough of Ealing last week agreed, holding U’s dismissal to be fair.

The EAT disagreed. J’s knowledge that the criminal assault allegation had been retracted (not just discontinued) was clearly relevant to any on-a-balance-of-probabilities finding in relation to U’s guilt. As someone fully involved in the process through his conduct of the investigation and consequently aware of the potential significance of this development, J should have told F.

The fact that he did not do so meant that F was making a decision on behalf of the employer without the benefit of clearly relevant knowledge which the employer had in its possession. Therefore the EAT found the dismissal unfair even though F had for all outward purposes done everything right – procedure, thought processes, range of reasonable responses, the works.

Lessons for employers

But does that mean that if a manager dismisses when not in the possession of potentially relevant information held elsewhere in the organisation, the dismissal will automatically be unfair? If so, how could the employer ever know if it yet knew everything it needed to know?

This decision is not so wide as it appears. It will probably only be a problem for employers where:-

(i)  the person holding the missing bit of information is aware of its potential significance to the individual’s continued employment;

(ii) that person is senior enough in hierarchy or role in the investigation process to fairly be said to represent (or be included in) the “corporate mind” of the employer;

(iii) the information in question is genuinely likely to make a difference to the outcome of the dismissal process, i.e. to the reasonableness of the employer’s belief in the misconduct; and

(iv) if the dismissing manager doesn’t have that information because he didn’t carry out a reasonable investigation, then you are going to lose anyway. However, if the employee under threat also knew it but didn’t mention it on his own behalf at the disciplinary meeting, then it is much less likely that this failure of corporate awareness would be visited on the employer.

There is nothing in this decision which requires J’s failure to tell F to be deliberate or malicious (though any evidence of that would put obviously the unfairness beyond doubt). It is enough that the information is in the employer’s corporate mind somewhere – quite why it doesn’t reach the person who could have used it is irrelevant.

In addition, more scarily, there is no reason why the principles in this case should be limited to misconduct cases. If I make an employee redundant because I personally am unaware that my company has won a big new contract which would make that unnecessary, you could probably expect the same outcome.