The Range of Reasonable Response Test (“RORR”)

What is unfair dismissal?

A dismissal must be based on one of the following five factors in order to be considered possibly 'fair': capability or qualifications, conduct, illegality or poor performance, sickness absence, some other substantial reason SOSR. Unfair dismissal is a topical area in employment law as it has been contended by some that it offers some degree of protection to the dignity and autonomy of employees in the context of employment and potential dismissal while some others contend that it adds no value to either the employer or the employee.

What qualifies as unfair dismissal?

Instances such as the following increase the likelihood that your firing was unjust: you requested for more flexible working hours. you refused to give up any of your working time rights, such as the ability to take breaks and rest periods. resigned while providing the appropriate amount of notice. If any of the following was the primary factor that led to the termination of an employee's employment, then it is very probable that the termination was unfair: The worker signed up to become a member of the labour union. The worker made a request for a more accommodating working arrangement. The worker blew the whistle on the company's misconduct.

The claim

Unfair dismissal is a topical area in employment law as it has been contended by some that it offers some degree of protection to the dignity and autonomy of employees in the context of employment and potential dismissal[1] while some others contend that it adds no value to either the employer or the employee.[2] Moreover, unfair dismissal claims account for over half of all cases brought before employment tribunals.[3] A staggering 49,600 unfair dismissal claims were dealt with by tribunals in 2011 out of which 12,300 claims were withdrawn by the claimant. The tribunals struck out 5,400 cases without a hearing while 1,400 claims were dismissed at a preliminary hearing. The disputing parties settled in 20,500 of those cases while the remaining 9,000 went to full hearing. Out of these cases, 4,800 were dismissed while 4,200 were successful.[4] This was the motivating factor behind the introduction of employment Tribunal fees (which was held to be unlawful by the Supreme Court in R (UNISON) v Lord Chancellor [2017] UKSC 5) and early conciliation process.

The success or failure of an unfair dismissal claim would depend largely on the alleged infraction of the employer. Basis for challenging a dismissal can be procedural or substantive or both. Section 94 ERA seeks to protect employees from unfair dismissal while section 98 contains the process for ascertaining the fairness or otherwise of a dismissal. In particular, section 98(4) sets out the reasonableness of the employer’s behaviour as the benchmark for fair dismissal. It is expected that for a dismissal to be considered fair, the procedures and investigations upon which the decision is made should be scrupulous and fair.[5] Employment Tribunals (ET) are minded to assess the fairness of the procedure by looking into the investigation conducted by the employer on the allegation of misconduct, reasons that convinced the employer of the culpability of the employee, the steps followed by the employer in dismissing the employee, and the proportionality of the response. It should go without saying that only gross misconduct should warrant the most severe sanction of dismissal.[6] It is this last condition, as provided in section 98(4) of the Employment Rights Act 1996 (ERA), which feeds into the “Range of Reasonable Response Test” (RORR) applied by tribunals.

Two issues stand out when assessing judges’ approaches to unfair dismissal claims; first, whether judges should be minded to challenge a dismissal where an employer fails to follow a fair procedure. Second, what should be the appropriate interpretation of the “reasonableness” requirement? This will be treated in turn.

Judges and Managerial Discretion

It has been noted that depending on the right concerned, an employer’s conduct be assessed against; an irrationality standard, a subjective standard, a mixture of subjective and objective standards, and a proportionality standard.[7] In the specific context of unfair dismissal, it has been noted that in formulating the appropriate standard, judges have been reluctant to interfere in areas which they believe to be a manager’s prerogative. Two of the topical aspects have been identified above and would thus be treated below

Procedural Fairness

As stated above, firm procedures are essential elements for reaching a decision as to the reasonableness of an employer to dismiss. However, how should judges react when it can be substantiated that despite the failure to follow procedure, the employer’s decision to dismiss should be upheld because the ultimate decision was reasonable and would not have changed even if the employer had followed a fair procedure? In British Labour Pump case,[8] it was clearly emphasised that such decision to dismiss will stand despite the failure to follow procedure. This decision appears to avoid questioning the managerial prerogative of employers but also raises a lot of questions particularly as to the interest of the employee. The court was unequivocal in its focus on the reasonableness of the employer’s decision to dismiss and not whether an employee has been unjustly treated. As it would be shown below in the substantive assessment of reasonableness, focus on the employer could be justified in its own right. This is because the assessment of reasonableness of a dismissal from the position of the employer as opposed to the position of the employee prevents an unfair treatment of employers. Nevertheless, this should not justify a complete neglect of the interest of employees. The danger posed by the reasoning in British Labour Pump has been recognised by the House of Lords in Polkey v Dayton[9] where the need for procedural safeguards in unfair dismissal claims was affirmed. In fact, the reasoning of Lord Bridge and Lord Mackay in Polkey – that is, procedure should still be complied with even if an employer reasonably decides that procedure would have been futile or would have made no difference to the decision to dismiss – has been described by Fredman and Lee as  the “touchstone for the effectiveness of procedural justice”.[10] The positive decision notwithstanding, there is still a sense of difference towards the employer’s decision as the court in this case reduced the amount of compensation obtainable by employees in such instance. Moreover, there are subsequent cases which seem to keep alive the ghost of British Labour Pump. It has been argued for instance that in Duffy v Yeoman,[11] the requirement of procedural fairness has been further eroded in the interest of managerial prerogative. In this case, it was held that an employer’s decision to dismiss was not rendered unfair by its failure make the necessary consultation as it was observed that such consultation would have added nothing to the final outcome.[12]

The confusion in this area was further complicated by the provision of section 98(2) of ERA which has been variously characterised as “Polkey reversal”. This provision is particularly controversial as it seems to bring back the “no-difference” rule. It provides that “the failure by an employer to follow a procedure in relation to the dismissal of an employee shall not be regarded for the purposes of section 98(4) as by itself making the employer’s actions unreasonable if he shows that he would have decided to dismiss the employee if he had followed the procedure”. Ultimately, this raises a question as to whether courts should take into account the compliance with procedure in ascertaining the reasonableness of a dismissal. This controversy as to the extent to which courts are allowed to assess a dismissal was brought to light by the diverging views in two conflicting decisions of the EAT. In Alexander v Bridgen Enterprises,[13] Elias J was not convinced that the meaning of “procedure” should be narrowed down to procedures adopted by the employer. Rather, procedure was said to mean “the steps which ought to be taken by an employer before determining that he will dismiss a particular employee”. However, a contrasting decision was reached in Mason v Governing Body of Ward End Primary School[14] where HHJ McMullen held that the words “procedure” and “by itself” as contained in section 98A(2) ERA imply the need for tribunals to narrow down their assessment to situations where there is a breach of the employer's own dismissal procedures. This latter case emphasises the level of caution often adopted by judges’ in deference to the employer’s managerial prerogative. Of these two positions, the tribunal in Kelly-Madden v Manor Surgery preferred the decision in Alexander.

As far as the procedural fairness is concerned, it appears that based on the confirmation in Kelly-Madden, judges’ have been purged from undue restrain and are thus more likely to balance the interest of the employer and that of the employee. It is therefore necessary at this juncture to assess how the court approaches the reasonableness decision.

Reasonableness of Decision

The RORR test was first developed in the case of British Leyland UK Ltd v Swift.[15] Its strictures were affirmed in the case of Iceland Frozen Foods Ltd v Jones[16] where it was stated that tribunals should consider the reasonableness of the employer’s conduct, not simply whether they consider the dismissal to be fair. Browne-Wilkinson J (as he then was) further stated that in making a decision as to the reasonableness of the employer’s conduct, the tribunal must not substitute the employer’s decision with its own. The court recognised that there are often a band of reasonable responses, which even though are different, are all capable of meeting the reasonableness test. As such, once a decision is seen to fall within this band of reasonableness, it will be considered fair even if another person would have decided differently.

On the one hand, the RORR test appears to be geared at ensuring proportionality by assessing the propriety of the decision to dismiss as compared to other less severe sanction in any given case of proven employee misconduct. On the other hand, it can be contended that RORR merely seeks to reinforce and protect employers’ managerial discretion such that a dismissal is considered as unfair only if it is entirely unreasonable.

The hands-off approach adopted by tribunals is motivated by the perceived need to avoid substituting the employer’s decision with what they would have done if they were faced with similar employee misconduct. There is thus a clear tension arising from ETs’ application of the RORR as it very well muddles up the interest of the employer, the employee and the public. One could say for instance that the test does not afford adequate protection to employees.[17] It could also be said that in fact the test empowers employers to exercise uncontrolled discretion by preventing employees from pursuing their dismissal complaints except in the most capricious cases.[18] On the contrary, a more positive appraisal highlights the flexible adaption of the RORR whereby tribunals and courts have been more willing to assess the managerial discretion of employers where the human right of an employee is concerned.[19] 

It should be noted that some judges have recognised the potential danger associated with the application of RROR test. Indeed, the Employment Appeal Tribunal (EAT) made this clear in Haddon v Van Den Bergh Foods Ltd,[20] when it practically abolished the RORR. The relief that must have been felt by opponents of RORR was however short-lived as in the cases of Post Office v Folly and HSBC Plc v Madden,[21] the Court of Appeal overruled the decision at the earliest opportunity. The Court stated in this case that the EAT’s reasoning in Haddon went too far.

Despite the avalanche of criticisms that could be levelled against the courts’ treatment of the RORR test, there are at least two main values it serves. First, as already stated, it prevents tribunals from substituting their decisions for that of the employer. Secondly, the test accords with natural justice which demands that employers should only be held liable if their behaviour is blameworthy.

Nevertheless, the courts’ attitude particularly in Madden can be faulted on the grounds that it reinforces the worst aspect of the reasonableness test by affirming that the court will declare a dismissal unfair only in the most arbitrary and irrational instances. Equally mind-bugging is the case of British Leyland Ltd v. Swift where the court stated that ‘‘[i]f no reasonable employer would have dismissed him, then the dismissal is unfair’’.

The conceptual basis behind the major justification for the RORR test – that is, the need to prevent the judges from substituting the employer’s decision with theirs – has been challenged.[22] If the term “substitution” is assessed more closely, Brodktorb argues that it cannot be said that a tribunal is substituting its own decision because it finds a dismissal unfair. Rather, the judge would be merely assessing the employer’s decision against a standard.[23]

Also worrying is that the RROR test places a rather low burden on employers. It was noted in British Home Stores v. Burchell[24] that in some circumstances, an employer’s decision to dismiss an employee could be considered reasonable even if it falls below the standard of the balance of probabilities provided the procedure adopted is fair.[25] This possibility is easily conceivable especially when one considers that the test focus on the state of mind of the employer such that for as long as the employer thought its decision to be necessary and fair, the actual truth would carry less weight. The problem associated with this reasoning is evident in Parr v Whitbread[26] where a dismissal of employees was considered despite the fact that some of the employees sacked were almost certainly innocent. The decision to dismiss all of them was clearly because the employer could not determine which of them had engaged in misconduct.

Further, courts’ attitude in the application of the RORR test tends to disregard the need for the preservation of the dignity and autonomy of employees by failing to hold employers to the requisite standard which will ensure that employees are dismissed only on relevant grounds. Due reference in this regard can be made to the case of Saunders v. Scottish National Camps Association[27] where the court considered an employee’s dismissal from a children’s camp on the basis of his sexuality to be fair. Despite the hard fact revealing that homosexuals were no more likely to be child abusers, the tribunal gave credence to the societal prejudice and bias to justify the reasonableness of the dismissal.[28]

Recommendation and Conclusion

Having identified the justification for and the criticism against the judges’ deference to set aside employers’ decisions to dismiss employees, it is believed that one could fashion a more suitable and appropriate test that draws on the value employees would obtain from the procedural fairness and a thorough assessment of reasonableness and on the other hand, the need to avoid injustice to the employer. As regard the procedural fairness, the approach adopted in Kelly-Marden seems to strike the requisite balance as it considered the blameworthiness of both parties. On the one hand, it ruled on the procedural unfairness of the part of the employer. On the other hand, it limited the compensation payable to the employee as the tribunal was convinced that the employees conduct was blameworthy.  Regarding the assessment of reasonableness in particular, the recommendations of Collins and Brodtkorb are hereby assessed.

Collins proposes that the RORR test should be supplemented by a test of proportionality. The modified RORR test would thus assess ‘‘whether the decision-maker is pursuing a legitimate objective”. It will be check “whether the means that were adopted were necessary and proportionate to achieving that objective’’.[29]

Brodtkorb referred to the case of Beedell v West Ferry Printers Ltd[30] which she sees as holding a great prospect for a refined RORR test as it “may offer an appropriate middle ground for the role of the RORR test in unfair dismissal law.”[31] In this case, the EAT was of the opinion that the RORR test should be based on the standard set out in Bolam v Friern Hospital Management Committee[32] and subsequently modified in Bolitho v City and Hackney Health Authority.[33] In this medical negligence case, it was established that the decision of a medical practitioner was to be adjudged against that of a reasonably competent medical practitioner. The modification in Bolitho is to the effect that a practice could well be considered to be negligent even if it is supported by a body of medical practitioners.

Conclusively, the concerns raised the courts current practice to the interest of employees and the public are real. However, the cautious approach adopted by the court is not without reason. Going forward, it is therefore proposed that judges should be open to more worthy alternatives whilst at the same time steering clear of an employer’s managerial prerogative.  

Footnotes

[1] H Collins, Justice in Dismissal (Oxford, Clarendon Press, 1993) 2.

[2] R Epstein, (1984), “In defense of the contract at will” (1984) 51 University of Chicago Law Review 947-52

[3] S Anderman, The Law of Unfair Dismissal, (3rd ed, London, Butterworths, 2001) 1.

[4] K Ewing and J Hendy, “Unfair dismissal law changes – unfair?” (2012) 41 Industrial Law Journal 115-121.

[5] K Brearley, “Case Comment: Employers - are you being fair? (2000) 11 International Company and Commercial Law Review 260-263

[6] T Brodtkorb. “Employee misconduct and UK unfair dismissal law Does the range of reasonable responses test require reform?” (2010) 52 International Journal of Law and Management 429-450 See ILEA v. Gravett [1988] IRLR 497. , the EAT reasoned that: “At one extreme there will be cases where the employee is virtually caught in the act and at the other there will be situations where the issue is one of pure inference. As the scale moves towards the latter end, so the amount of inquiry and investigation, including questioning of the employee which may be required is likely to increase.”

[7] D Cabrelli, “The Hierarchy of Differing Behavioural Standards of Review in Labour Law” (2011) 40 Industrial Law Journal 146

[8] British Labour Pump v. Byrne [1979] I.C.R. 347

[9] [1987] IRLR 503

[10] S  Fredman and S. Lee “The Unacceptable Faith of Proceduralism” (1986) 15 Industrial Law Journal 15

[11]  [1994] IRLR 642

[12] M Wynn, “Unfair Dismissal – The Ghost of Byrne Resurrected? (1995) 24 Industrial Law Journal 272

[13]  [2006] IRLR 422

[14] [2006] IRLR 432

[15] [1981] IRLR 91

[16] [1983] ICR 17. See A Sanders, Expanding The ‘ No-Difference ’ Rule in the Law of Unfair Dismissal (2007) 36 Industrial Law Journal 355.

[17] C Sheffield “Case Comment: The reasonable response test in unfair dismissal cases” (2003) 8 Coventry Law Journal 67-73.

[18] Ibid.

[19] Pay v Lancashire Probation Service [2004] ICR 187.

[20] [1999] IRLR 672 

[21]  [2000] EWCA Civ 330

[22] T Brodtkorb. “Employee misconduct and UK unfair dismissal law Does the range of reasonable responses test require reform?” (2010) 52 International Journal of Law and Management 429-450.

[23] Ibid.

[24] [1978] IRLR 379 EAT.

[25] Sainsbury's Supermarkets Ltd v Hitt [2003] IRLR 23.

[26]  [1990] I.C.R. 427, [1990] I.R.L.R. 39.

[27] [1980] IRLR 174.

[28] C Sheffield “Case Comment: The reasonable response test in unfair dismissal cases” 8 (2003) Coventry Law Journal 67-73.

[29] M Freedland and H Collins, “Finding the right direction for the industrial jury”, (2000) 29 Industrial Law Journal 288-92.

[30] [2001] EWCA Civ 400.

[31] T Brodtkorb. “Employee misconduct and UK unfair dismissal law Does the range of reasonable responses test require reform?” (2010) 52 International Journal of Law and Management 429-450

[32]  [1957] 1 WLR 582.

[33] [1997] 3 WLR 1151.