The Court of Appeal has brought to an end months of uncertainty for
employers over one of the most fundamental issues in unfair dismissal law.
In the long-awaited case of HSBC v Madden it has re-established the
"range of reasonable responses" test as the correct way for tribunals
to decide whether an employer’s decision to dismiss is reasonable. The test was
rubbished last year by the Employment Appeal Tribunal in the Haddon vs Van den
Bergh Foods case as making it too hard for individuals to win unfair dismissal
claims by ensuring only "perverse" decisions failed the test.
The EAT also said a tribunal should put itself in the employer’s shoes and
ask if it would have dismissed in the circumstances. The ruling was criticised
by employers for making the decision on fairness subjective and turning the
tribunal into a further level of appeal for dismissed employees.
But the Court of Appeal said employers are the right people to discipline
their own workforce. Tribunals simply have to decide objectively if sanctions
are fair by considering whether they fall within a range of reasonable
responses that could have been made in the circumstances. It was for Parliament
and not the courts to decide if the law should be changed, the judges added.
"This is a resounding victory for common sense, and there will be a
sigh of relief from employers," said Colin Tweedie, senior employment
partner at Addleshaw Booth, which advised HSBC.
"The uncertainty caused by Haddon meant going to tribunal would have
become far more of a lottery for employers. They were already becoming more
cautious and making disciplinary procedures over-elaborate, or taking the line
of least resistance and avoiding dismissal."