London Borough Of Hackney v Usher

Factual and Procedural Background

The case involves two appeals by the employer, Company A, against decisions of the London Industrial Tribunal regarding the unfair dismissal of the employee, Plaintiff. The first appeal ("liability appeal") challenges the Tribunal's finding that the Plaintiff was unfairly dismissed for gross misconduct. The second appeal ("remedies appeal") contests the Tribunal's order for reinstatement of the Plaintiff. The Plaintiff had been employed by Company A from July 1970 until summary dismissal in May 1993 based on allegations of sexual abuse made by a former resident, referred to as DL, of a children’s home managed by the Plaintiff.

The Plaintiff was suspended in July 1992 following allegations made by DL, who claimed abuse during his time at the Home from 1972 to 1974. Investigations were conducted by internal management and the police, with an independent expert involved in the child protection inquiry. The Plaintiff denied the allegations throughout the disciplinary process, which proceeded in his absence due to pending criminal proceedings.

Following a disciplinary hearing, Company A dismissed the Plaintiff on the basis of gross misconduct, citing the need to protect vulnerable children and the credibility of DL’s account as assessed by the investigating officers. The Plaintiff was acquitted of criminal charges related to the allegations in September 1993. An internal appeal against dismissal was dismissed by a panel of Company A councillors. The Plaintiff then appealed the dismissal to the Industrial Tribunal, which found the dismissal unfair.

Legal Issues Presented

1. Whether the Industrial Tribunal erred in law by placing a burden of proof on the employer to establish the reasonableness of the dismissal at the stage of considering fairness.
2. Whether the Tribunal was correct to halt the hearing at the close of the employer’s evidence, without hearing evidence from the Plaintiff, and to find the dismissal unfair on that basis.
3. Whether the Tribunal’s decision on unfair dismissal was plainly and unarguably right notwithstanding any procedural errors.

Arguments of the Parties

Appellant's (Company A) Arguments

• The Tribunal incorrectly applied the burden of proof by requiring the employer to prove reasonableness of dismissal, contrary to the statutory position since the Employment Act 1980.
• The Tribunal erred by stopping the hearing at the close of the employer’s evidence without calling evidence from the Plaintiff, which was procedurally unfair.
• Relying on precedent, the employer contended that the Tribunal should have heard both sides before reaching a decision, except in exceptional cases.
• The employer argued that the Tribunal’s approach was inconsistent with established case law, including the Burchell test and subsequent authorities.

Appellee's (Plaintiff) Arguments

• The Plaintiff’s representative accepted that the question of reasonableness was neutral and that the Tribunal approached it without placing a burden on either party.
• It was submitted that the Tribunal had sufficient evidence to decide the issue of reasonableness and that evidence from the Plaintiff would not have altered the outcome.
• The Plaintiff’s counsel relied on the Tribunal’s detailed findings and contended that the decision was plainly and unarguably right despite any procedural errors.

Table of Precedents Cited

Court's Reasoning and Analysis

The court analysed the procedural and substantive fairness of the dismissal decision. It found that the Tribunal incorrectly applied a burden of proof on the employer to establish the reasonableness of dismissal, which was inconsistent with the statutory position post-Employment Act 1980. The Tribunal’s language indicated it required the employer to prove a prima facie case, which was a misdirection of law.

Regarding procedural fairness, the court examined the Tribunal’s decision to halt the hearing at the close of the employer’s evidence without hearing from the Plaintiff or calling his witnesses. While the Tribunal has discretion to stop proceedings if the party with the onus has clearly failed, this power must be exercised with caution. The court held that the Tribunal’s error in placing the burden of proof on the employer may have influenced its decision to stop the hearing prematurely. Furthermore, this case was not so hopeless or frivolous as to justify such a course.

The court rejected the submission that the Tribunal’s decision was plainly and unarguably right despite these errors. It emphasized that the Tribunal not only makes primary factual findings but also exercises judgment based on those facts, and the absence of the Plaintiff’s evidence means the outcome could have been different. Therefore, the proper course was to remit the case for rehearing before a fresh Tribunal without preconceptions.

The court did not analyze the Tribunal’s findings on the merits in detail, deferring such assessment to the new hearing. As the liability appeal failed, the remedies appeal was not considered.

Holding and Implications

The court’s final ruling was to set aside the Industrial Tribunal’s decisions and REMIT the case for a fresh hearing before a different Tribunal. The application for leave to appeal to the Court of Appeal by the Plaintiff was refused.

The direct effect of this decision is that the question of unfair dismissal and associated remedies will be reconsidered afresh, allowing both parties to present full evidence, particularly from the Plaintiff. No new legal precedent was established; rather, the decision reinforces the importance of correct application of burdens of proof and procedural fairness in unfair dismissal proceedings.