Forty year old rule called into question?

There was a flurry of excitement in mid-March when the Supreme Court handed down a judgment which, at first blush, appeared to challenge the 40-year-old unfair dismissal test set out in British Home Stores Ltd v Burchell [1978] IRLR 379. In brief, Burchell establishes that an employer must show they have a genuine belief on reasonable grounds after sufficient investigation, to the effect that an employee’s conduct was such as to trigger a test on whether dismissal could be justified because it fell within the band of reasonable responses that a (reasonable) employer could make.

In Reilly v Sandwell Metropolitan Borough Council [2018] UKSC 16 (14 March 2018), Ms Reilly had been a primary school head teacher with a lengthy, exemplary career behind her. She had taken up her latest post in 2009.

Unknown to the governors of the school Reilly had a very close, albeit non-sexual, relationship with a Mr Selwood, and had bought a property jointly with him. Selwood lived at the property, but Reilly lived elsewhere. In 2010, Selwood was convicted of possession of child pornography, and placed under a three-year community order and a sexual offences prevention order, which included a prohibition on his having unsupervised access to minors and a requirement to participate in a sex offender programme.

Reilly sought advice from various quarters, including the police and probation officers about whether she should report her relationship with Selwood to the governors or the council. In the event, she did not, but the conviction and her relationship with Selwood came to the notice of the council, and she was dismissed after a disciplinary hearing. Her internal appeal failed. The employment tribunal, however, held that the internal appeal had been faulty, but that she stood a 90% chance of being dismissed had the appeal been fair, and reduced her compensation by 90%, applying Polkey v A E Dayton Services Ltd [1988] 1 AC 344. It then applied s 123(6) of the Employment Rights Act 1996, concluding that she had made a 100% contribution to her dismissal, and reduced her compensation to nil. Reilly appealed.

Dismissing her final appeal, the Supreme Court held that Reilly had a duty to report her relationship with Selwood to her employers, and knew so. It observed that if she had disclosed the relationship she might not been dismissed. Lady Hale set the legal cat among the pigeons by noting that the legal framework set out in Burchell was an imperfect fit for the case. Read carefully, however, there is nothing in the judgment to suggest that Burchell, which was endorsed by the Court of Appeal in Post Office v Foley [2000] EWCA Civ 3030, is under threat.