The boundaries of the band of reasonable responses

In deciding whether or not a dismissal was fair, the tribunal must apply the "band of reasonable responses" test and consider if dismissal was an option open to a reasonable employer. While the band is wide, there are limits to when dismissal will be a reasonable response, as a recent Court of Appeal decision highlights. Consultant editor Darren Newman discusses.

Employment law is a subject that can change and develop at an alarming speed, but some of its key concepts have been with us for a long time. The recent decision of the Court of Appeal in Bowater v Northwest London Hospitals NHS Trust [2011] IRLR 331 CA concerns the "band of reasonable responses" test in unfair dismissal claims. That test was first set out by the Court of Appeal in 1981. In British Leyland UK Ltd v Swift[1981] IRLR 91 CA, Lord Denning, the Master of the Rolls, said: "It must be remembered that in all these cases there is a band of reasonableness, within which one employer might reasonably take one view: another quite reasonably take a different view."

Over the years, this test has become a permanent fixture in unfair dismissal law. Essentially, it means that a tribunal is not entitled simply to decide whether or not it thinks that a dismissal is unfair, but must also consider whether or not dismissal was an option open to a reasonable employer. This involves paying close attention to the nature of the employer's business, because what might seem of little consequence in one kind of business can assume central importance in another. Many employers will tolerate minor pilfering from the stationery cupboard, and not treat the use of an envelope or two for personal use as a dismissing offence. In a retail environment, however, where stock control is a key factor in the success of the business, even very minor pilfering is likely to lead to summary dismissal. This is generally regarded as fair, provided that the employer has clearly communicated the applicable standard, acts consistently with it and follows a fair procedure before dismissing.

Sometimes, however, it has seemed that the band of reasonable responses is so wide that it encompasses clearly unreasonable behaviour, and that only the most perverse dismissal decisions will be held to be unfair. In the late 1990s, these concerns led to a challenge to the very concept of the band of reasonable responses. In Haddon v Van den Bergh Foods Ltd [1999] IRLR 672 EAT, an employee was dismissed for leaving his shift early. However, the reason for his early departure was that he had been given a drink at his own long-service party (provided by the employer) and he did not want to operate machinery afterwards. He persuaded the tribunal and the Employment Appeal Tribunal (EAT) that the band of reasonable responses test had become, in effect, a perversity test, which allowed overly harsh dismissals to be upheld as fair. For a short period it looked as though the very basis of unfair dismissal law was undergoing a major shift. However, the Court of Appeal disagreed with the approach - in Haddon and in Post Office v Foley; HSBC Bank plc (formerly Midland Bank plc) v Madden [2000] IRLR 827 CA it firmly reinstated the band of reasonable responses test.

However, in doing so, the Court of Appeal stressed that the test for fairness must not become one of perversity. The requirement that the tribunal must apply the standards of a reasonable employer does not mean that it is powerless to act when an employer's decision to dismiss is simply too harsh.

In Bowater, the Court of Appeal has reminded employers - and the EAT - that the band of reasonable responses has its limits. The tribunal in this case found that the dismissal of a nurse for making an isolated lewd comment as she sought to restrain an unconscious patient at the end of a long shift was unfair. The tribunal noted that most people would simply regard the comment as humorous and held that dismissal was not an option open to a reasonable employer. The EAT disagreed and was critical of the tribunal's reference to "most people". What mattered was not what most people would think, but what a reasonable NHS trust would think. The EAT held that the dismissal was fair as it fell within the band of reasonable responses open to an NHS trust. However, the Court of Appeal has now restored the original decision of the tribunal. It found that the tribunal had directed itself carefully and accurately on the correct test of fairness and was entitled to find that no reasonable employer would have dismissed.

I have discussed the facts of this case with hundreds of HR professionals over recent months, and the overwhelming consensus has been that dismissal was too harsh a penalty. It would seem that the EAT was so keen to prevent the tribunal from substituting its own view for that of a reasonable employer that it missed the common-sense conclusion that this dismissal was simply unfair.

The case shows that following a fair procedure is not the be-all and end-all of a fair dismissal. Whether or not the employer acted reasonably, taking into account "equity and the substantial merits of the case", is central. While a tribunal should not substitute its own view of the right outcome, it can still use its own experience as an "industrial jury" to find that a dismissal is unfair, even if all the proper procedures have been followed.

That means, of course, that dismissal will sometimes involve a gamble on the part of the employer. If it concludes that dismissal is the right outcome from a process, there is no way of guaranteeing that an employment tribunal will agree. It also means that one employment tribunal might view a dismissal as unfair, whereas another faced with identical facts might conclude that dismissal was a fair outcome.

When questioned, employers tend to say that they want employment tribunals to be more consistent and predictable in their outcomes. But the unpredictability of the tribunal system goes hand in hand with its flexibility and informality. There is no avoiding the trade-off here. The alternative to employment tribunals as an industrial jury taking a view as to whether or not employers have behaved reasonably would be a more rigid and formal employment law system, with more complicated case law and a much stricter approach to precedent. On balance, I think most of us prefer the less formal and more common-sense approach.

Email: perspective@xperthr.co.uk