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International Journal of Law andManagement

Vol. 52 No. 6, 2010pp. 429-450

# Emerald Group Publishing Limited1754-243X

DOI 10.1108/17542431011093135

Employee misconduct and UKunfair dismissal law

Does the range of reasonable responsestest require reform?

Tor BrodtkorbAmerican University of Sharjah, Sharjah, United Arab Emirates

Abstract

Purpose – The purpose of this paper is to expose practical and theoretical problems with the rangeof reasonable responses (RORR) test as applied in UK unfair dismissal law, and to propose analternative interpretation of the test that would resolve these problems.Design/methodology/approach – Through a close analysis of the purpose and structure of UKunfair dismissal law, and a careful reading of the leading cases in the area, the paper questionswhether the law as it is currently interpreted achieves the goals of the underlying legislation. Thecurrent interpretation of the law being found lacking, alternatives are considered and evaluated.Findings – The RORR test, as delineated in the most recent Court of Appeal cases, holds thatdismissals are fair unless they are based on a reason for which no reasonable employer woulddismiss. This interpretation of the test is internally incoherent; moreover, it fails adequately topromote the goals of unfair dismissal law, which are to protect the dignity and autonomy ofemployees. An alternative and superior interpretation of the test would hold a dismissal to be outsidethe RORR if no rational theory of management would condone dismissal on the grounds given by theemployer.Social implications – The paper draws attention to fundamental incoherence in the currentinterpretation and application of unfair dismissal law, and suggests a new and better approach. If thenew approach were accepted by the courts or by Parliament, it could lead to reform in unfairdismissal law.Originality/value – The paper provides a detailed analysis of the RORR test, a long-standing andwell-recognized problem in UK unfair dismissal law, and suggests a novel solution that wouldimprove the coherence and function of unfair dismissal law.

Keywords Labour law, Industrial relations, United Kingdom, Employment legislation, Dismissal

Paper type General review

I. IntroductionUnfair dismissal law places restrictions on the ability of employers to dismissemployees for misconduct. Section 94 of the Employment Rights Act (ERA) 1996 givesemployees ‘‘the right not to be unfairly dismissed’’ by their employers, and section 98delineates the process for determining whether a dismissal is fair or unfair, withsection 98(4) setting reasonableness of the employer’s behaviour as the benchmark forfair dismissal. Upon a finding of unfair dismissal, an employment tribunal (ET) mayorder reinstatement or reengagement of the employee, if the employee expresses a wishfor such a remedy, and if circumstances permit[1]. More commonly, the ET orders anaward of compensation, made up of a basic award and a compensatory award. TheET’s assessment of the fairness of a dismissal for misconduct will focus on the state ofmind and behaviour of the employer at the time of the dismissal, paying relatively littleheed to the question whether the employee actually engaged in misconduct. It is thuspossible for an employee to be fairly dismissed even if he or she was wholly innocent ofthe misconduct alleged, provided that the employer had good reason at the time of thedismissal for believing the employee had engaged in misconduct. This focus on the

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behaviour of the employer recognizes that it is the employer who bears the burden ofunfair dismissal law – most successful unfair dismissal claims result in an awardpayable by the employer to the employee – and so natural justice demands that theemployer should have this burden imposed only if its own behaviour is blameworthy.

Several justifications have been offered for the intervention of unfair dismissal lawin the employer’s ability to manage its own business: redressing the imbalance inbargaining power between employers and employees; protecting a property right thatemployees have, or ought to have, in their jobs; and protecting the dignity andautonomy of employees. The best explanation is probably offered by Hugh Collins whoclaims that the goal of unfair dismissal law is to offer some degree of protection to thedignity and autonomy of employees in the context of employment and potentialdismissal (Collins, 1993). The protection of these values is far from absolute, and inmany cases economic efficiency and managerial discretion take precedence, but unfairdismissal law demonstrates society’s recognition of the importance of these values.

In evaluating an employer’s decision to dismiss an employee for misconduct, an ETwill consider the fairness of the investigation the employer conducted into themisconduct, the reasons the employer had for believing the employee had engaged in thealleged misconduct, the procedure the employer followed in dismissing the employee, andthe decision of the employer to use dismissal, the most severe sanction available to it, as aresponse to the misconduct[2]. In all of these areas, the employer’s behaviour is judgedagainst a range or band of reasonable responses that employers might take[3]. The rangeof reasonable responses test (hereinafter, ‘‘RORR test’’) is meant to protect managerialdiscretion, condemning dismissals as unfair only if they are entirely unreasonable.

Since its inception, unfair dismissal law has been subjected to a great deal ofcriticism. It would be difficult to argue that it is biased in favour of employees, thoughsome employers would surely argue that however often they succeed in unfairdismissal cases, each case they litigate imposes costs upon them. The more commonargument is that it does too little for employees, and one persistent complaint in recentyears has been that the RORR test prevents employees from pursuing successful unfairdismissal complaints in all but the most capricious of employer decisions to dismiss. Itis argued that the RORR test distorts the statutory language at the root of unfairdismissal law to significantly reduce the chance of an employee successfully pursuinga claim for unfair dismissal. The RORR test is challenged for its insistence that ETsrefrain from substituting their own judgment for that of the employer, a rule thatmakes it more difficult still for ETs to find in favour of dismissed employees. Finally, itis alleged that the RORR test causes unfair dismissal law to mirror and legitimizeprevailing employer practice, rather than guiding it towards a new standard that betterbalances the interests of employer and employee.

The critics of the RORR test are justified in finding fault with the current operation ofthe test within unfair dismissal law. The RORR sets a standard that is very difficult foremployers to violate. In Haddon v. Van Den Bergh Foods Ltd[4], an employment appealtribunal (EAT) tried to eliminate the RORR test from unfair dismissal law, but theirdecision was overruled by the Court of Appeal (CA) in Post Office v. Foley, HSBC plc(formerly Midland Bank plc) v. Madden[5]. Whatever one may think of the CA decision inMadden, the elimination of the RORR test espoused in Haddon goes too far. The testperforms an important function in unfair dismissal law and, therefore, a reinterpretationis to be preferred to the elimination of the test. The RORR test ensures that an ET judgesthe behaviour of the employer against an objective standard rather than simplycomparing the decision of the employer with the decision the tribunal would have made

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in the same circumstances, and finding for the employee if the decisions differ.Unfortunately, the CA decision in Madden reaffirmed the place of the RORR test in a waythat emphasized and entrenched the worst aspects of the test, essentially asserting that,under the proper understanding of the RORR test, only the most arbitrary and irrationalinstances of employer behaviour are to be constrained by unfair dismissal law.

The EAT decision in Beedell v. West Ferry Printers Ltd[6] may offer an appropriatemiddle ground for the role of the RORR test in unfair dismissal law. The EAT suggestedthat the test should be interpreted in line with the standard set forth in Bolam v. FriernHospital Management Committee[7] for a reasonably competent medical practitionerunder medical negligence law. In this interpretation, an employer’s decision to dismiss anemployee would be judged as falling within or without one of several possible standardsof good management accepted within the business community. Thus, considerableautonomy would remain with the employer in employment decisions, but the decisions todismiss employees could be judged by whether they are sensible or wise rather thanmerely rational. More recent developments in medical negligence law can be adapted togive further useful guidance to ETs, suggesting that dismissals be assessed in terms ofwhether they could survive rational scrutiny under at least one theory of goodmanagement. The adoption of the interpretation of the RORR test proposed in Beedellwould address many of the criticisms of the RORR test, but unfortunately, thisinterpretation of the RORR test does not fit harmoniously within all of the establishedcase law on the RORR test, and so would require an overturn of recent precedent by theCA or the House of Lords, or the intervention of Parliament through statute or regulation.

In section II of this paper, the justifications for unfair dismissal law will be assessed,and it will be suggested that the protection of the dignity and autonomy of employeesis the most persuasive. In section III, the current operation of unfair dismissal law willbe explored in the context of dismissals for misconduct. In section IV, criticisms of theRORR test will be considered, including the claim that it is a gloss on the statute, thatthe requirement that the members of ETs not substitute their own opinion for that ofthe employer is contradictory and prevents ETs from finding in favour of employees,and that it prevents unfair dismissal law from establishing a higher standard foremployers in dismissing employees. In section V, the advantages of adopting theinterpretation of the RORR test proposed in Beedell will be explored, and the hurdles inthe way of its adoption will be assessed.

II. Justifications for unfair dismissal lawUnfair dismissal law places restrictions upon an employer’s ability to dismissemployees. Absent unfair dismissal law, an employer could dismiss an employee at anytime and for any reason, subject only to the implied contractual obligation to givenotice (enforced though the doctrine of wrongful dismissal and legislation requiringminimum notice periods for persons employed for more than one month[8]) and anyprovisions in the contract of employment itself that put limitations on the employer’sright to dismiss (some employment contracts are for a specific term and specify theconditions under which they can be terminated). In the late nineteenth century, courtsin the USA adopted a legal presumption that contracts of employment were terminable‘‘at-will’’, and so could be terminated upon summary notice, and for any reason or noreason at all. Courts in the UK never adopted the stark jargon of the American doctrineof employment-at-will, but prior to unfair dismissal law, the ‘‘contractual presumptionsin the English common law could often produce a similar result’’ (Deakin and Morris,2005). The employer’s ability to dismiss the employee was essentially unconstrained,

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and if for any reason the employer no longer desired the services of the employee, theemployer had the ability to terminate the contract of employment. Employment is avoluntary arrangement that is created through contract; therefore, it is reasonable totake something like the doctrine of employment-at-will as the default position inemployment law, departure from which should require some justification.

One argument for restrictions on the employer’s ability to dismiss is that the inequalityof bargaining power between employer and employee is such that the employee cannotproperly protect his or her interests through the negotiation of the contract ofemployment. The market for labour is often a buyer’s market, so employees are oftenoffered employment on a ‘‘take it or leave it’’ basis. Furthermore, an employee with a jobgenerally relies on the continuation of employment more than the employer relies on thecontinued labour of that particular employee. Thus, leaving employment contractsentirely in the realm of the ‘‘private law of property and contract’’ helps to ‘‘sustaininequality’’ (Hepple, 2003). Unfair dismissal law could be seen as the equivalent of thestate placing a mandatory implied term not to be unfairly dismissed into every contract ofemployment. It is the sort of term that employees would like to have in their contracts, butcannot demand, because it is a buyer’s market for labour, and employees tend to view thesearch for work as a competition with other prospective employees. It would be awkward,to say the least, for an employee to inquire at a job interview how much misconductwould be tolerated by the employer before the employee would be dismissed.

The inequality of bargaining power is a feature of most, though not all, employmentrelationships. However, unfair dismissal law cannot be justified as a response to thatinequality if it does not actually improve the fortune of employees. Jeffrey Harrisonpoints out that the participants in transactions respond to changes in the rules governingthose transactions, and ‘‘a shift in discharge rights has costs, and the costs will be sharedby employers, employees and consumers’’ (Harrison, 1984). If unfair dismissal law altersemployment contracts to give employees a right not to be unfairly dismissed, ‘‘workers asa group will pay the costs of job security through fewer employment opportunities’’(Harvard Law Review, 1989). The modern global marketplace for labour makes it evenmore likely that some employment opportunities will simply relocate from the UK ratherthan submit to restrictive regulation. Richard Epstein argues that the employment-at-willis to be preferred in terms of economic efficiency, ‘‘not because [it is] perfect, but becausein many contexts [it] respond[s] to the manifold perils of employment contracts betterthan any rivals that courts or legislatures can devise’’ (Epstein, 1984). Epstein points outthat, even if they are unequal, contracts of employment are still bilateral, and any attemptto restrict the sort of contract that can be offered to an employee also restricts the sort ofcontract that employees can accept. He suggests that this restriction is unjustified and, inmany cases, harmful to the interests of employees, because ‘‘people who are competentenough to marry, vote, and pray are not unable to protect themselves in their day-to-daybusiness transactions’’ (Epstein, 1984, p. 954). It may be argued that employees’preferences about job security do not protect their real interests, but in that case, ‘‘thecorrect remedy is not to force the parties to contract on any particular set of terms, suchas a compulsory term against unfair dismissal, but rather to alert them to such apossibility and facilitate such transactions if the parties so wish’’ (Collins, 1993, p. 13).The analyses of Collins, Epstein and Harrison do not deny that employees have lessbargaining power than employers; they suggest that unfair dismissal law will not makeemployees any richer, and will reduce economic efficiency.

It has been suggested that unfair dismissal laws can be justified on economicgrounds, not for the benefits they give to employees, but because they prevent

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employers from engaging in apparently opportunistic dismissals that in fact harmoverall economic efficiency. An example of an opportunistic dismissal would be if aperformance bonus forms a significant part of an employee’s compensation, and anemployer dismisses the employee prior to the performance bonus becoming due inorder to avoid paying it[9]. Another example would be dismissing an older, lessefficient worker in a workplace where there was an implied agreement that loyalty tothe firm in the early years of the employee’s life would be rewarded by job security andincreasing wages as the employee grew older. Clearly, this sort of dismissal raisesissues of justice and fair-dealing, but it has been argued that it also reduces economicefficiency, because news of the behaviour of the employer will spread, and the employermay encounter problems in recruiting and retaining workers. If opportunistic dismissalis at all common, employees will waste efforts investigating the employment practicesof prospective employers. An economic analysis reveals that:

[. . .] market forces will not completely prevent employer opportunism. Given informationbarriers, failure to correct opportunism would create an efficiency cost by forcing workers toinvestigate potential employers’ firing practices (Harvard Law Review, 1989, p. 525).

The efficiency cost could be avoided or reduced by the imposition of unfair dismissallaw, but it is important to recognize that unfair dismissal law will not completelyprevent employer opportunism, and that society must absorb the costs ofadministering unfair dismissal law. Given the costs of administering unfair dismissallaw, the imposition of unfair dismissal laws to curb employer opportunism is ‘‘likely tocreate efficiency losses in the form of higher labor and administrative costs’’ (HarvardLaw Review, 1989, p. 528). It appears that unfair dismissal laws cannot be justified onthe basis of economic efficiency, despite the inefficiency of opportunistic dismissals.

Unfair dismissal laws cannot be justified as a response to employees’ unequalbargaining position because the laws do not make employees as a group any better offeconomically. However, a related problem in the employment relationship is thesubordination of the employee to the employer. The economic, social and evenpsychological dependence of employees on their jobs, together with the ability of theemployer to give orders to and to dismiss its employees, place employees in a position thatis subordinate to their employers. This relationship of subordination is undesirable in ademocratic society that values equality among its members, and unfair dismissal law maybe justified as an attempt to mitigate, if not eliminate, this subordination. The concept ofemployees having a property right in their jobs has been offered as a response to thesubordinate position of employees, and ‘‘the fact that in accepting and continuing in aparticular job, [the employee] has forgone other employment opportunities and thesecurity they might offer’’ (Hermann and Sor, 1982). Clearly, this property right is verylimited indeed, as the holder of a job ‘‘enjoys neither secure possession nor absolute controlover its alienation’’ (Collins, 1993, p. 10). Even the proponents of property rights in jobsaccept that it would only be a ‘‘qualified right’’ that would amount to ‘‘freedom from unjustdismissal’’ (Hermann and Sor, 1982, p. 816). Hugh Collins argues that a better model forjustifying unfair dismissal law is found in the protection of the dignity and autonomy ofemployees. Protection of the dignity and autonomy of employees would also mitigate theworst aspects of the subordination of employees. Collins defines ‘‘dignity’’ as therequirement to treat individuals with ‘‘concern and respect’’ and notes that an employerwho ‘‘dismisses a worker after hearing allegations of misconduct, without eitherinvestigating the matter properly or giving the employee an opportunity to rebut anycharges, also treats that employee with disrespect’’ (Collins, 1993, p. 16). Summary

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dismissal without investigation treats the employee as a commodity to be disposed ofwhen his or her reputation has been tainted, rather than as an individual who values his orher reputation and expects it to be an outcome of his or her actual behaviour. On the otherhand, dismissal of an employee who is genuinely incompetent is based on a relevantcharacteristic of the employee and does not reflect disrespect but rather ‘‘a legitimateconcern to promote the general welfare achieved through efficient production’’ (Collins,1993, p. 16). Collins defines ‘‘autonomy’’ as ‘‘a positive and perfectionist notion of freedom,one which requires regulation of social life in order to ensure fair access to worthwhileexperiences in life’’ (Collins, 1993, p. 18). Employees often spend a considerable portion oftheir lives at work, create important relationships and social networks at work, anddepend on the income they receive from work to pursue other goals and interests.Furthermore, employers sometimes place restrictions upon an employee’s behaviour andactivities outside of work on the grounds that they can affect the ability of the employee toperform his or her work, or affect the reputation of the employer. The autonomy ofemployees is enhanced by unfair dismissal law because ‘‘a workplace governed by harshrules and brutal conditions detracts from autonomy’’ (Collins, 1993, p. 18), and excessiverestrictions on an employee’s activities outside of work can prevent employees frompursuing experiences that they find worthwhile. Collins argues that:

[. . .] autonomy thus introduces the principles of the Rule of Law into the workplacedisciplinary code, for just as the citizen must be able to discover the law or else live inconstant fear of unexpected punishment by the State, so too the employee must know thedisciplinary code or else work in fear of sudden loss of employment (Collins, 1993, p. 20)

Self-government is not possible if one cannot discover the rules by which one will bejudged and if one cannot have some confidence that the rules will be applied fairly.Indeed, other laws that promote dignity and autonomy, such as laws prohibitingdiscrimination on the grounds of sex, race, disability, age, religion, and sexualorientation depend on unfair dismissal law operating in the background. If anemployer can dismiss an employee for any reason, even pure whimsy, then it will bevery difficult to prevent dismissals based on unlawful discrimination. It does not makesense to provide ‘‘women with a right to maternity leave if the employer can dismissthem as soon as they take the leave’’ (Davies, 2004).

III. The present state of unfair dismissal lawThe statutory standards for evaluating the fairness of a dismissal are found in section 98of the ERA 1996. The schema set forth in section 98 can be divided into two stages: thefirst of which is concerned with establishing and categorizing the reason for dismissal; andthe second of which is concerned with the reasonableness of the employer’s conduct intreating that reason as a justification to dismiss. Certain categories of reasons for dismissalare automatically fair[10], and other categories of reasons are automatically unfair, so insome cases the fairness of the dismissal is settled in the first stage. Section 98(2)(b)establishes that reasons related to ‘‘conduct’’ belong to one of the legitimate categories ofreasons to dismiss, so dismissals for misconduct are potentially fair and require anassessment of the reasonableness of the employer’s conduct.

Once it has been established that the reason for dismissal was misconduct, the ETmoves on to section 98(4):

Where the employer has fulfilled the requirements of subsection (1), the determination of thequestion whether the dismissal is fair or unfair [having regard to the reason shown by theemployer] –

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(a) depends on whether in the circumstances [including the size and administrative resourcesof the employer’s undertaking] the employer acted reasonably or unreasonably in treating itas a sufficient reason for dismissing the employee, and(b) shall be determined in accordance with equity and the substantial merits of the case.

The ET is required to take into account the size and administrative resources of theemployer; consequently, a larger employer with greater administrative resources isexpected to conduct a more thorough investigation of the misconduct and to follow athorough procedure appropriate to its capabilities before dismissing an employee. Anearly interpretation of the reference to ‘‘equity and the substantial merits of the case’’required the ET, in assessing the reasonableness of the employer’s conduct, to ‘‘look atthe question in the round and without regard to a lawyer’s technicalities. It has to lookat it in an employment and industrial relations context and not in the context of theTemple and Chancery Lane’’[11].

When an employee is dismissed for misconduct, there are three related butlogically separable issues relevant to determining the reasonableness of theemployer’s decision to dismiss. The first is the fairness of the procedure followed bythe employer in dismissing the employee, including the employer’s investigationinto the misconduct, and whether the employee was given an opportunity to presenta defence and appeal the decision. The second is how much proof was available, atthe time of the dismissal, that the employee engaged in the misconduct alleged. Thethird is whether the employer acted reasonably in choosing dismissal, rather thansome lesser penalty, as the appropriate sanction for the misconduct. The issues arerelated because the evaluation of how much investigation is necessary may beaffected by the degree of proof initially available to the employer. In ILEA v. Gravett,the EAT reasoned that:

At one extreme there will be cases where the employee is virtually caught in the act and at theother there will be situations where the issue is one of pure inference. As the scale movestowards the latter end, so the amount of inquiry and investigation, including questioning ofthe employee, which may be required is likely to increase[12].

Similarly, the reasonableness of the employer’s decision to dismiss may be affected bythe degree of certainty that the employee engaged in the misconduct in question. InParr v. Whitbread[13] the EAT held that a dismissal of a group of employees was fair,despite the fact that some were almost certainly innocent and they were all dismissedsimply because the employer could not determine which of them had engaged inmisconduct. In this case, the lack of proof against each of the dismissed employees wasmitigated by the fact that the employer had conducted a thorough investigation thathad nonetheless failed to show which individual within a group of employees hadcommitted misconduct. The form of misconduct was sufficiently serious that theperpetrator had to be excluded from the workplace, even at the cost of dismissingblameless employees.

The legal test for the degree of proof of the misconduct available to the employerand the adequacy of its investigations is set out by Arnold J. for the EAT in BritishHome Stores v. Burchell:

First of all, there must be established by the employer the fact of that belief; that the employerdid believe it. Secondly, that the employer had in his mind reasonable grounds upon which tosustain that belief. And thirdly, we think, that the employer, at the stage at which he formedthe belief on those grounds, at any rate at the final stage at which he formed that belief on

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those grounds, had carried out as much investigation into the matter as was reasonable in allthe circumstances of the case[14].

The first step requires that the reason given by the employer be the real reason and not acover for an automatically unfair reason or otherwise unjustifiable reason. The next twosteps assess the employer’s justification for believing that the employee committed themisconduct in question, looking at the investigation performed to produce evidence, andthe strength of the inference of guilt based on that evidence. It is important to note that anemployer’s decision to dismiss on the grounds of misconduct could be found to bereasonable even if the beliefs upon which it was based were not true, and the employee hadnot in fact engaged in the misconduct. This proposition is demonstrated by Arnold J.’sstatement that, ‘‘we are not concerned with whether Miss Burchell was guilty or innocentof the offences charged against her’’[15]. Burchell establishes that the standard ofinvestigation and evidence required for an employer to reasonably dismiss is lower thanwould be expected of the police in a criminal investigation, and that ‘‘a conclusion on thebalance of probabilities will in any surmisable circumstances be a reasonableconclusion’’[15]. The strength of this last statement demonstrates that in somecircumstances, an employer could reasonably dismiss based on evidence that falls belowthe standard of the balance of probabilities.

In its evaluation of the employer’s decision to dismiss, the ET may not take intoaccount any information that was not available to the employer at the time of thedismissal. Thus, if evidence surfaces subsequent to the dismissal that conclusively provesthe employee engaged in the misconduct alleged, or some other form of misconduct, thisevidence does not help to establish that the employer acted reasonably in dismissing theemployee. Similarly, evidence discovered after dismissal that vindicates the employee ofthe misconduct alleged has no bearing on whether the employee was unfairly dismissed.This rule, established in Devis & Sons Ltd v. Atkins[16], was cast into doubt by BritishLabour Pump Co. Ltd v. Byrne[17], but later confirmed by the House of Lords in Polkey v.AE Dayton Services Ltd[18]. The rule is the natural epistemic response to the fact thatunfair dismissal law is concerned with ‘‘the conduct of the employer and not on whetherthe employee suffered any injustice’’[19]. Information that an employer did not knowcannot have had any bearing on its deliberations about how to respond to the misconductand, therefore, has no relevance to the ET’s evaluation of the reasonableness of theemployer’s decision to dismiss. Polkey also confirmed a related rule on the fairness of theprocedure followed by the employer in dismissal, making it clear that if an employer doesnot follow a fair procedure in dismissing an employee, ‘‘[the] weight to be attached to suchprocedural failure should depend upon the circumstances known to the employer at thetime of the dismissal, not on the actual consequences of such failure’’[20].

Even if the employer honestly believed, on reasonable grounds, reached through afair investigation, that the employee engaged in misconduct, section 98(4) of the ERA1996 requires the ET to consider whether the employer ‘‘acted reasonably orunreasonably in treating it as a sufficient reason for dismissing the employee’’. Onewould expect this language to require an ET to evaluate not just the investigation intothe misconduct, the certainty of the employer that it had occurred, and the procedurefollowed during the dismissal, but also whether the misconduct was sufficientlyserious to justify dismissal. In fact, there are few cases where an ET has found adismissal to be unfair on the basis that the sanction of dismissal was disproportionateto the offence; moreover, the reported cases show that when an ET does make such afinding, it is typically reversed by the EAT or a higher court. Strouthos v. LondonUnderground Ltd[21] is a rare exception, where an ET found an employee’s misconduct

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was not sufficiently serious to justify dismissal, the EAT reversed the decision of theET on the grounds that some reasonable employers would have dismissed inthe circumstances, and the CA reinstated the decision of the ET, on the grounds thatthe ET was entitled in the circumstances, including the employee’s many years offaultless service, to find that the dismissal fell outside the RORR open to an employer.Far more typical is Anglian Home Improvements Ltd v. Kelly[22], in which the ET hadfound that some errors in banking and record keeping were not sufficiently serious tojustify dismissal, but the CA held that the only reasonable conclusion that the ET couldhave reached was that the employee was fairly dismissed. In order to understand thedecision in Anglian Home Improvements Ltd, and to appreciate why it represents thenorm in unfair dismissal law, it is necessary to examine the RORR test.

In all unfair dismissal cases, the ET must approach the question whether theemployer acted reasonably in dismissing the employee by referring to the RORR test,developed first in British Leyland UK Ltd v. Swift[23] and definitively stated byBrowne-Wilkinson J (as he then was) in Iceland Frozen Foods Ltd v. Jones:

(1) the starting point should always be the words of s.57(3) themselves;(2) in applying the section an Industrial Tribunal must consider the reasonableness of theemployer’s conduct, not simply whether they [the members of the Industrial Tribunal]consider the dismissal to be fair;(3) in judging the reasonableness of the employer’s conduct an Industrial Tribunal must notsubstitute its decision as to what was the right course to adopt for that of the employer;(4) in many [though not all] cases there is a band of reasonable responses to the employee’sconduct within which one employer might reasonably take one view, another quitereasonably take another;(5) the function of the Industrial Tribunal, as an industrial jury, is to determine whether inthe particular circumstances of each case the decision to dismiss the employee fell within theband of reasonable responses which a reasonable employer might have adopted. If thedismissal falls within the band the dismissal is fair: if the dismissal falls outside the band itis unfair[24].

The RORR test, as stated above, can be distilled into two related instructions. The firstis for the ET to refrain from substituting its judgment for that of the employer; that is,it should not find the employer’s decision to be unreasonable simply because it is notthe decision that the ET would have made in those circumstances. The second is for theET to recognize that there is no single correct way to manage a business and thatemployers might legitimately and fairly adopt different disciplinary standards, some ofwhich might be harsher than others.

The role of the RORR test in unfair dismissal law was challenged in Haddon v. VanDen Bergh Foods Ltd[25], when Morison J. of the EAT described it as a ‘‘mantra’’ that hascaused ETs to apply ‘‘what amounts to a perversity test’’[26] instead of applying the clearterms of the statute. The decision does not challenge the prohibition against thetribunal’s substituting its judgment for that of the employer. Morison J. acknowledgesthat a tribunal is unlikely to be able to assess the reasonableness of the employer’sconduct without considering what the members themselves would have done in thecircumstances, but insists that they must go ‘‘somewhat further’’ than that,acknowledging that their own views may not ‘‘accord with reasonableness’’[26], whichmust be evaluated with an objective test. The decision in Haddon also acknowledges thatemployers might fairly and reasonably adopt different disciplinary standards, but itmaintains that the notion of a band or range of responses leads the tribunal to considerthe extreme ends of the range as falling within the bounds of reasonableness.

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Writing the decision for the EAT in Midland Bank plc v. Madden[27] Lindsay J.acknowledged that ‘‘no court short of the Court of Appeal’’[28] could overturn the RORRtest, but offered an explanation of the test that would significantly reduce its role in unfairdismissal law. Lindsay J. wrote that in the context of dismissals for misconduct, the ET is‘‘free to substitute its own views for those of the employer in coming to a view on each ofthe three parts of the Burchell test’’, and is also ‘‘free to substitute its own views for those ofthe employer as to the reasonableness of dismissal as a response to the reason shown forit’’[28]. The EAT decision in Madden also notes the danger of ETs treating the RORR testas a perversity test and suggests that a codicil be attached to the RORR test remindingETs of the language of section 98(4).

The decision of the EAT in Madden was reversed by the CA in Post Office v. Foley,HSBC plc (formerly Midland Bank plc) v. Madden[29], in a judgment that reaffirmed theplace of the RORR test in unfair dismissal law. Mummery LJ did not accept the EAT’sreasoning in Madden and insisted that there is no point at which an ET may substituteits own judgment for that of the employer. The decision acknowledges that, in onesense, if the members of an ET ‘‘conclude that the dismissal was unfair, they are ineffect substituting their judgment for that of the employer’’[30], but only in the sensethat the members are concluding that the employer was not acting within the objectivestandards of reasonableness in the decision to dismiss, and are therefore overruling theemployer’s decision. This is not the same as the members of the ET concluding that,had they been the employer, they would have acted differently in the circumstances.The latter form of substitution is not permissible at any stage of the ET’s deliberations.The difference between these forms of reasoning is subtle, and failure to appreciate thedistinction could cause confusion. An ET is presumably composed of reasonablepeople, so if they conclude that the employer’s decision was outside the objectivebounds of reasonableness, then it is not a decision that they would have made.However, this logic does not flow in the other direction: the fact that the ET would nothave acted as the employer did does not prove that the employer had actedunreasonably. As Mummery LJ states, ‘‘although the members of the tribunal cansubstitute their own decision for that of the employer, that decision must not bereached by a process of substituting themselves for the employer and forming anopinion of what they would have done had they been the employer’’[30].

The judgment of the CA in Madden also firmly overruled Haddon and rejected theargument that the RORR test amounted to a perversity test. In an attempt to illustrate theRORR test, Mummery LJ gave two examples of employee conduct: the first is anemployee burning down the employer’s factory; the second is an employee saying, ‘‘goodmorning’’ to a line manager. Mummery LJ states that in the first case, the only reasonableresponse would be to dismiss, while in the second case, it would be unreasonable todismiss, and that ‘‘between those extreme cases there will be cases where there is room forreasonable disagreement . . . as to whether dismissal . . . is a reasonable or unreasonableresponse. In those cases, it will be helpful for the tribunal to consider the ‘RORR’’’[30].An employer’s decision to dismiss will be found fair if it falls within the RORR, so itappears from this example that any action by an employee more serious than saying,‘‘good morning’’ to a line manager could result in a fair dismissal of the employee. Saying,‘‘good morning’’ is not misconduct at all, so the example given by Mummery LJ explainswhy unfair dismissal law offers relatively little protection against dismissal formisconduct that is trivial, but undisputed or conclusively proven.

In Anglian Home Improvements Ltd v. Kelly[31], an ET had found by a majoritydecision that the dismissal of an employee for misconduct was unfair because the

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misconduct was too minor to justify dismissal, and the EAT upheld the decision. TheCA, however, allowed the appeal of the EAT’s decision, and dismissed the claim forunfair dismissal. It is worth noting that the ET decision in Anglian HomeImprovements did not dispute the applicability of the RORR test nor did it depart inany way from legal orthodoxy in unfair dismissal law; it simply found that the decisionto dismiss in this case fell outside the RORR available to an employer. Mummery LJ,writing the decision for the CA, states that the decision of the ET was ‘‘perverse’’because ‘‘the only conclusion that a reasonable tribunal could have come to in this case,applying the band of reasonable responses test, was that it was open to a reasonableemployer summarily to dismiss’’[32]. The CA decision represents a blow to thediscretion of the ET as an industrial jury, and is bound to have a chilling effect on theability of ETs critically to evaluate the employer’s assessment of the seriousness ofemployee misconduct. The effect of the decision is made worse by the veiledimplication in the judgment of Mummery LJ that the lay members of the ET ought togive deference to the views of the legally trained chairman.

In Sainsbury’s Supermarket Ltd v. Hitt[33], the CA addressed another attempt by theEAT to narrow the application of the RORR test. In this case, the EAT had held that in adismissal for misconduct, the RORR test was not relevant to the investigation of themisconduct, but only to the question whether dismissal was a reasonable response to themisconduct. Mummery LJ rejected this position, stating that the RORR test applies to‘‘the conduct of the investigations, in order to determine whether they are reasonable inall the circumstances, as much as it applies to other procedural and substantive aspectsof the decision to dismiss’’[34]. Thus, a range of investigation methods, from reasonableand rigorous to reasonable but lax, must be accepted by ETs as capable of supporting afair dismissal. This finding is sensible because section 98(4) of ERA 1996 anticipatesvarying degrees of investigation from different employers in different circumstances byits reference to ‘‘the size and administrative resources of the employer’s undertaking’’.However, some of the language in Sainsbury’s can be interpreted to require a very lowstandard of investigation from employers, much as the CA decision in Madden set anextremely broad range of types of misconduct that could justify dismissal. Mummery LJstates that:

The investigation carried out by Sainsbury’s was not for the purposes of determining, as onewould in a court of law, whether Mr. Hitt was guilty or not of the theft of the razor blades. Thepurpose of the investigation was to establish whether there were reasonable grounds for thebelief that they had formed. . .that there had been misconduct[35].

This statement seems to confuse the purpose of an employer’s investigation with thepurpose of a tribunal’s review of that investigation. It is true that when an ET examinesan employer’s investigation of misconduct, its purpose is not to determine whether theemployee engaged in misconduct, but to determine whether the employer’sinvestigation of the misconduct was reasonable. It is also true that the employer’sinvestigation of the misconduct of the employee should not be held to the standard of acriminal investigation and trial. However, it is reductive to state that the purpose of anemployer’s investigation of misconduct is no more than an attempt to establishreasonable grounds for a belief in employee misconduct that the employer has alreadyformed. A tribunal must take into account the resources available to the employer toconduct investigations, and allow the employer to err on the side of caution inexcluding from its workforce employees who may have engaged in misconduct, but the

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goal of a reasonable employer investigating misconduct ought to be to discoverwhether misconduct occurred.

The decision in Sainsbury’s allows an employer a broad degree of discretion even inthe investigation into misconduct and the procedure followed in dismissing on thebasis of misconduct. In 2004, section 98A of the ERA 1996 introduced a specificminimum procedure that employers were required to follow if a dismissal was to befair. Failure to complete the minimum procedure that was ‘‘wholly or mainlyattributable to failure by the employer to comply with its requirements’’[36] wouldmake the dismissal unfair, and trigger a minimum basic award for the employee[37],unless this would ‘‘result in injustice to the employer’’[38]. Since their introduction, theminimum statutory procedures have not been considered a success, and they wererepealed under the Employment Act, 2008[39]. While they were in force, the minimumstatutory procedures evidently had little effect on the standards to which employerswere held in the investigation of misconduct. EATs, relying on the RORR test asoutlined by the CA in Madden and Sainsbury’s, continued to overturn ET decisionsthat found dismissals unfair because of insufficient investigation by the employer intothe alleged misconduct of the employee[40].

IV. Criticism of the RORR testCriticism of the RORR test is extensive and varied, but a unifying theme is the concernthat it gives too much discretion to employers and as a result unfair dismissal law offerstoo little protection to employees. The RORR test is faulted for being an inaccurate glosson the statute, for tying the hands of ETs by prohibiting their members fromsubstituting their own judgment for that of the employer, and for establishing aperversity standard for the review of employer decisions to dismiss, rather thanestablishing new and higher standards for employers to follow when dismissingemployees. The most telling problem with the RORR test is that instead of allowingunfair dismissal law to raise the standard of procedural and substantive fairness indismissal, the test reifies the lowest standard of current employment practice.

The RORR test is condemned as a ‘‘gloss’’ on section 98(4) of ERA 1996. The test‘‘replaces the statutory test of fairness in terms of the reasonableness of the employer’sdecision with a negative, but not identical, formula of whether the employer’s conduct wasunreasonable’’ (Collins, 1993, p. 38). Hugh Collins show how the use of the negativeformula affects the likelihood of a dismissal being found to be unfair by analogy to theterms ‘‘sharp’’ and ‘‘blunt’’:

if we ask whether a knife is sharp, then we might expect a negative reply if the knife’s edgefalls anywhere between completely blunt and slightly dull. If, on the other hand, we askwhether the knife is blunt, then we receive a negative answer provided that the knife hassome cutting edge (Collins, 1993, p. 39).

In a case where the dismissal is neither clearly unreasonable nor clearly reasonable, ifone asks if it is reasonable, one is more likely to get a negative reply than if one asks ifit is unreasonable. One response to this criticism is that the statute itself supports theinterpretation of the RORR test, in that it does not merely ask if the behaviour of theemployer was reasonable, but if the employer acted ‘‘reasonably or unreasonably’’ indismissing the employee. The disjunction of ‘‘reasonably’’ and ‘‘unreasonably’’ impliesthat the two terms together exhaust all possible categorizations of employer decisionsto dismiss, so that if a dismissal is not unreasonable, it must be reasonable. Thus, theRORR test does find fewer dismissals to be unfair than a simple evaluation of the

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reasonableness of the dismissal, but the language of the statute offers some support tothe RORR test.

The RORR test is also claimed to be a gloss on the statute because it ignores thereference in section 98(4)(b) ERA 1996 to the ‘‘equity and substantial merits of the case’’.Andy Freer argues that the language in section 98(4)(b) ‘‘imports an even-handedassessment of fairness to all parties’’ and that the RORR test, by its deference to managerialdiscretion, ‘‘deprives industrial tribunals of the opportunity to curb managementprerogative and fully to consider the interests of employees or the public (Freer, 1998)’’.This paper has already considered the alternative explanation of the language in section98(4)(b) offered by Union of Construction Allied Trades and Technicians v. Brain[41], whichis that section 98(4)(b) is meant to exclude ‘‘lawyer’s technicalities’’ from unfair dismissallaw. Nevertheless, Freer supports his alternative explanation by reference to the CAdecision in Dobie v. Burns International Security Service (UK) Ltd[42], where the referenceto the ‘‘equity and substantial merits of the case’’ is held to require an ET to consider, whenevaluating an employer’s decision to dismiss, whether ‘‘there will or will not be injustice tothe employee, and the extent of that injustice’’[43]. To the extent that section 98(4)(b) wasintended to require an even-handed approach that is concerned with whether the dismissalcaused injustice to the employee, the RORR test as explained by the CA in Madden andSainsbury’s falls short of that goal.

The RORR test has also been faulted for prohibiting ETs from substituting their ownviews for those of the employer. Andrew Freer argues that ETs necessarily rely on theirown subjective experience in order to determine what is reasonable, and that, therefore, itis ‘‘contradictory to adopt a test that entrusts individual tribunals with the task ofmaking an objective assessment of the precise range of responses open to a reasonableemployer’’, when the underlying justification for the test is that, ‘‘industrial tribunals arenot capable of applying the plain words of statute and basic reasonableness withoutguidance’’ (Freer, 1998, p. 342). The argument seems to be that whenever a tribunal findsa dismissal to be unfair, they are, in effect, substituting their own judgment for that of theemployer, and, therefore, that the prohibition against the tribunal’s substituting its ownjudgment for that of the employer acts as a virtual prohibition on the tribunal’s finding adismissal to be unfair. Freer’s view is based on a misunderstanding of the task of an ET.An ET that finds a dismissal to be unfair because what the employer did is not what theETwould have done is substituting its judgment for that of the employer. A tribunal thatfinds a dismissal to be unfair because what the employer did is not what any reasonableemployer would have done is not substituting its judgment for that of the employer. Inthe latter case, the tribunal is judging the actions of the employer against a standard. It istrue that, in all likelihood, the dismissal in such a case is not what the tribunal wouldhave done, but that is because the tribunal is probably composed of reasonable people. Itis a merely contingent fact that the tribunal would not have dismissed in such a case. Thereason the dismissal is found to be unfair is that no reasonable employer would havedismissed. Nonetheless, it is a fair point that a tribunal could be misled by the prohibitionon substituting its judgment for that of the employer, and, as a result, it could showexcessive deference to the interests of the employer in evaluating an employer’s decisionto dismiss.

One of the goals of unfair dismissal law at the time of its enactment was to raise thestandards followed by employers in dismissal to offer employees greater security intheir employment (The Report of the Royal Commission on Trade Unions andEmployers’ Associations, 1968). Some critics claim that as a result of the RORR test,unfair dismissal has done very little to increase job security for employees and to

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protect them from the whims of management. The RORR test requires a tribunal toimagine a range of reasonable employer responses to misconduct, from mild to harsh,and then anoints all of them as fair. As a result, it is possible for a dismissal to be‘‘harsh but fair’’ (Collins, 2004). The standard applied by the RORR test of employerdecisions to dismiss is said to be ‘‘a restatement in employment law of theadministrative law concept of Wednesbury unreasonableness, i.e. a test of perversity’’(Smith, 2000a). Under administrative law, the standard for a court interfering with thedecisions of a local authority is set out in Associated Provincial Picture Houses, Limited v.Wednesbury Corporation, and the standard is that the court must not intervene unlessthe decision of the local authority is ‘‘so unreasonable that no reasonable authoritycould ever have come to it’’[44]. Freer insists that ‘‘despite contentions to the contrary,the RORR test is akin to Wednesbury reasonableness and perversity’’ (Freer, 1998,p. 340). The RORR test is certainly similar to the Wednesbury test of reasonableness,but it is not identical. One of the harsher formulations of the RORR test is the statementin British Leyland Ltd v. Swift that, ‘‘If no reasonable employer would have dismissedhim, then the dismissal is unfair’’[45], yet this statement still requires a lower standardthan the one set in Wednesbury. The statement in Swift requires a decision to dismiss tobe unreasonable in order to be unfair, but the inclusion of the word ‘‘so’’ in theWednesbury test implies that the decision of local authority must not only fall withinthe category of unreasonable decisions, but must belong to the subset of veryunreasonable decisions. There is, therefore, a difference between the unfair dismissalstandard and the administrative law standard in that all unreasonable dismissals areunfair, but some unreasonable decisions of local authorities should be immune from theintervention of the courts: those that are unreasonable but not ‘‘so unreasonable that noreasonable authority could ever have come to it’’. There is clearly a difference in logicbetween the RORR test and the Wednesbury test, but Freer may have a point insuggesting that this subtle difference may elude the ETs charged with hearing unfairdismissal cases. Indeed, as noted above, while trying to refute the claim that the RORRtest is a perversity test, Mummery LJ in Madden describes a RORR that would includeall but the most irrational decisions to dismiss.

Mark Freedland argues that the RORR test, together with the fear ETs have of theirdecisions being reversed, cause ETs to err on the side of finding dismissals to be fair,which in turn relieves any pressure that unfair dismissal law might be expected toexert upon employers to improve the standards followed in dismissal and to exerciserestraint in the use of dismissal as a disciplinary measure (Freedland and Collins,2000). Michael Bennet points out that in applying the RORR test, an ET is:

[. . .] not setting standards, it is merely following existing standards. In fact the tribunal isfollowing the standard of the employers most likely to dismiss employees. It thus can beargued that the tribunal is legitimating the actions of the worst employers (Bennet, 2002).

Collins argues that the RORR test, ‘‘substantially undermines the thinking behind thelegislation – that tribunals should be empowered to assess the fairness of dismissalsaccording to some objective standards’’ (Collins, 2004, p. 38). It is, at first glance,strange to criticize the RORR test for failure to hold employers to a fixed standard,when one of the elements of the RORR test prohibits ETs from substituting their ownviews for those of the employer in order to ensure reference to an objective standard ofreasonableness. However, Paul Davies and Mark Freedland argue that the RORR testdoes erode the objectivity of the notion of reasonableness in unfair dismissal law ascompared to the public law notion of reasonableness. They state that the public law

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notion of reasonableness consists in a ‘‘scrutiny of the reasoning or rationality of theparticular decision in the hands of the particular decision-making [sic] in terms of itsinclusion of all relevant factors or considerations and its exclusion of all irrelevantones’’ (Davies and Freedland, 1997). (Note that the words ‘‘decision-making’’, in thequotation ought to be read as ‘‘decision-maker’’.) By contrast, the RORR test:

[. . .] was more subjective in the sense that, by being polycentric, it invoked the idea of ashared common sense among a multiplicity of employers as to what a reasonable decision inthe particular circumstances might consist of. This makes much stronger reference to notionsof intuition than the idea of relevancy does, and is to that extent more subjective in character,even if the subjectivity has to be a widely disseminated one (Davies and Freedland, 1997,p. 326).

Thus, the RORR test fails to hold employers to a standard of fairness that wouldrespect the dignity and autonomy of employees by requiring employers to dismissemployees only on relevant grounds, and prohibiting employers from dismissingemployees on irrelevant grounds. This problem is illustrated by the application of theRORR test in Saunders v. Scottish National Camps Association[46], where an employeewas dismissed from working at a children’s camp on the basis of his homosexuality.The industrial tribunal heard evidence that homosexuals were no more likely to abusechildren than heterosexuals, but accepted that it was a common prejudice thathomosexuals were a danger to children, and concluded that it was not unreasonable forthe employer to dismiss the employee because of his sexual preference. The EATapproved the reasoning of the industrial tribunal. Contemporary anti-discriminationlegislation would probably prevent a similar result today, but what is noteworthy aboutSaunders is that a dismissal was found to be fair based on the employer’smisconception, just because that misconception was a common one.

If it is problematic that the RORR test prevents unfair dismissal law from holdingemployers to a better standard when they dismiss employees, it is even moreproblematic that the test allows employers to create their own standards. When anemployer’s disciplinary code defines certain behaviour as misconduct, and threatensdismissal for that form of misconduct, that typically ends the inquiry into the fairnessof a dismissal for that behaviour, because ‘‘a tribunal is likely to find that a dismissal inconformity with the rules is fair, without any assessment of whether the rulesthemselves were fair’’ (Collins, 2004, p. 37). In Hadjioannou v. Coral Casinos Ltd, anemployee was dismissed for relatively minor infractions of very strict rules governingstaff interaction with gambling customers. In reference to this case, Labour Law: Textand Materials notes:

the absence of any evaluation of the merits of the employer’s disciplinary rule. It is assumedthat the rule must state the appropriate substantive standard for disciplinary matters. Thereis no examination, for instance, of the question whether other employers in the same line ofbusiness apply a similar disciplinary rule, which might demonstrate the importance of therule to the success of the employer’s business (Collins et al., 2005).

Collins suggests that the RORR test needs to incorporate a test of proportionality,which would investigate ‘‘whether the decision-maker is pursuing a legitimateobjective, and then [ask] whether the means that were adopted were necessary andproportionate to achieving that objective’’ (Freedland and Collins, 2000, p. 296). In thecontext of dismissal for misconduct, the question would be whether the rules found inthe employer’s disciplinary code were created to pursue a legitimate business objective,and whether dismissal was a necessary and proportionate response to an infraction of

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those rules. A proportionality test of the type described by Collins would allow unfairdismissal law to raise the standards followed by employers in dismissals, but Collinsgoes too far with the use of the word ‘‘necessary’’. If a dismissal must be necessary to befair, then a dismissal will be fair only if there was no other sanction short of dismissalthat could have adequately addressed the employee’s misconduct. A test of necessitywould not be a modification of the RORR test; it would be the opposite of the RORRtest. However, the introduction of some element of proportionality would address thefact that the current interpretation of the RORR test reifies prevailing standards, ratherthan setting new ones, and that it allows employers to have a significant role in settingthose standards through their own disciplinary codes. Without some element ofproportionality, there is a distinct possibility that unfair dismissal law could lead to adecline in fairness in the dismissal of employees. The current application of the RORRtest gives employers as a group the incentive to enact strict disciplinary codes, and torigidly enforce them, in order to create a new low standard of employer behaviouragainst which future dismissals will be judged.

V. The RORR test reformedAfter the challenge to the RORR test in Haddon, but before the CA reversed Haddon inMadden, the EAT had occasion to consider the RORR test in Beedell v. West FerryPrinters Ltd[47]. The EAT’s judgment, delivered by Judge Peter Clark, accepted thatthe RORR test was established by binding precedent that could not be altered by theEAT, but it offered much better defence than Madden against the claim that the RORRtest was a perversity test. Judge Peter Clark suggests that the proper analogy for theRORR test is not the administrative law concept of Wednesbury unreasonableness, butthe Bolam test used in medical negligence cases, set out in Bolam v. Friern HospitalManagement Committee[48]. Under this test, a doctor would not be found negligent foracting according to the practices of one body of medical opinion merely because therewas another body of medical opinion that advocated different practices. Judge PeterClark completes the analogy as follows:

[. . .] the question of a doctor’s negligence will depend upon whether a reasonable body ofmedical practitioners would have accepted the practice which he followed, even if anotherbody of equally reasonable practitioners would have acted differently [a band or range orreasonable responses], so it may be said that the question of whether an employer has actedreasonably in dismissing his employee will depend upon the range of responses of reasonableemployers. Some might dismiss; others might not. It is not necessary for the applicant’scomplaint to succeed that the employment tribunal concludes that no reasonable employerwould have dismissed[49].

The analogy ties the concept of a RORR to an idea of competing theories of goodmanagement, some of which might be more inclined to dismiss than others, but all ofwhich are reasonable. Ian Smith approves of the interpretation of the RORR test offeredin Beedell, and offers the following illustration:

Assume for a moment a modish focus group of 10 employers, being asked if they would sackon the facts in contention. The range test means that if they split 5-5, or 6-4, or even 7-3 [eitherway] there may still be a finding of fairness, but it would still be open to a tribunal to findthat, if the split was 9 versus one latter-day descendant of Genghis Khan, the dismissal wasunfair (Smith, 2000b).

The Beedell interpretation prevents the standard for the RORR test from being set bythe employer whose eagerness to dismiss is tempered just enough to be considered

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reasonable (or not unreasonable). This reinterpretation of the RORR test would addressthe argument that the RORR test is a perversity test; moreover, it would ameliorate therestrictions that the RORR test places on the ability of unfair dismissal law to improvethe standards followed by employers in dismissals.

In current medical negligence law, the Bolam test remains good law, but it has beenmodified slightly by the House of Lords decision in Bolitho v. City and Hackney HealthAuthority[50]. In Bolitho, Lord Browne-Wilkinson stated that:

[. . .] where there are questions of assessment of the relative risks and benefits of adopting aparticular medical practice, a reasonable view necessarily presupposes that the relative risksand benefits have been weighed by the experts in forming their opinions. But if, in the rarecase, it can be demonstrated that the professional opinion is not capable of withstandinglogical analysis, the judge is entitled to hold that the body of opinion is not reasonable orresponsible[51].

Under this interpretation, a doctor will not escape liability merely by showing thatthere is a body of medical opinion that supports the particular practice or procedureused by the doctor; the body of medical opinion supporting the accused doctor musthave comprehensible justifications for preferring that particular practice or procedureover other alternatives. If the RORR test were interpreted in line with the Bolam test asmodified by the Bolitho decision, it would introduce into unfair dismissal lawsomething very like the proportionality analysis advocated by Collins. Rather thanrestricting unfair dismissal to cases where no reasonable employer would havedismissed, and accepting prevailing employment practices as the standard ofreasonableness, the Bolam and Bolitho approach to the RORR test would allow an ETto find a dismissal to be unfair if there were no theory of good management that wouldsupport dismissal in such a case; moreover, this approach would permit the ET toexamine the logic of harsh disciplinary codes or inflexible disciplinary practices. Thisalternative interpretation of the RORR test would thus offer dismissed employees agreater chance to succeed in unfair dismissal claims, and it would address the criticismthat individual employers are currently able to set their own standards for dismissalthrough harsh disciplinary codes. The Bolam test would reduce, to some extent, thesubordination employees experience in the employment relationship and would offergreater protection of their dignity and autonomy.

Interpreting the RORR test in line with the Bolam test would not negate the roleplayed by the RORR test in unfair dismissal law, nor would it address all of thecriticisms directed against it. The RORR test would still prohibit the members of ETsfrom substituting their own view for that of the employer. The members of the ETwould still have to look to an objective standard for reasonableness in businesspractices; the difference would be that the standard would be set by a rational theory ofmanagement rather than judgment of the reasonable employer most inclined to dismissemployees. In this context, the criticism against the substitution point loses much of itsforce, though the possibility remains that a misunderstanding of the prohibition coulddeter ETs from finding dismissals to be unfair. The reinterpretation of the RORR testwould not completely address the argument that unfair dismissal law reflectsprevailing employment practices rather than imposing a new and higher standardupon them. The standard for determining whether a dismissal is unfair would still beset by employers as a group rather than employees, their representatives, or the state,but the standard would be higher, as a decision to dismiss would have to be in line with

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a theory of management that could be rationally justified, rather than the whim of theharshest possible reasonable employer.

The most significant impediment to the reinterpretation of the RORR test offered inBeedell is that it is not consistent with the line of authorities that established the RORRtest. Summing up reinterpretation of the RORR test in line with the Bolam test, JudgePeter Clark states in the Beedell decision, ‘‘It is not necessary for the applicant’scomplaint to succeed that the employment tribunal concludes that no reasonableemployer would have dismissed’’[52]. This statement contradicts the declaration inBritish Leyland Ltd v. Swift: ‘‘If no reasonable employer would have dismissed him, thenthe dismissal is unfair. But if a reasonable employer might reasonably have dismissedhim, then the dismissal is fair’’[53]. Beedell appears to offer a compromise position thatmaintains the benefits of the RORR test while addressing the most serious chargesagainst it, but it cannot be reconciled with all of the precedents that define the RORRtest. It appears then that the CA or House of Lords must be willing to overturn at leastsome of the language that established the RORR test if a judicial response is to befound to the legitimate criticisms of the RORR test. Alternatively, Parliament couldamend or expand the language of section 98(4) of ERA 1996 to reject or alter theapplication of the RORR test.

VI. ConclusionThe right not to be unfairly dismissed offers employees only limited relief from thesubordination of the employment relationship and only limited protection against therisks posed by the employment relationship to their dignity and autonomy. In part, thisis the unavoidable result of the realities of the employment relationship. The existenceof employment depends on employers needing work done rather than employeesneeding work. The market for labour is typically a buyer’s market, and employeesgenerally depend on their jobs more than employers depend on the services of aparticular employee. A competitive economy requires that managers retain the abilityto control, direct and discipline their workforce, and there are limits to the degree oflegal oversight of employer practices compatible with economic efficiency. Unfairdismissal law could, however, be doing more than it currently does to protectemployees from the whims and unfounded biases of employers in the context ofdismissal for misconduct.

The RORR test is in part responsible for the failings of unfair dismissal law.Although it is arguably compatible with the language of section 98(4) of ERA 1996,which poses the disjunctive question, ‘‘whether the employer acted reasonably orunreasonably’’ in dismissing the employee, the RORR test cements the interpretationthat is least favourable to dismissed employees, and makes little of the language in thesection requiring courts to take into account ‘‘equity and the substantial merits of thecase’’. The criticism of the rule prohibiting the members of ETs from substituting theirown judgment for that of the employers is of little weight, as it really just requires ETsto hold employers to some standard other than their own instincts or preferences, andthere is no reason inherent in the substitution point that the objective standard mustrequire unreasonable behaviour on the part of the employer. There is considerablymore force in the criticism that the RORR test, while not identical to the Wednesburytest of reasonableness, is very nearly as serious a hurdle to the success of employeespursuing unfair dismissal claims. The RORR test impedes the ability of unfairdismissal law to impose new standards on employers that would offer more protectionto the dignity and autonomy of employees in the employment relationship. Instead, it

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adopts existing employment standards as the model for assessing employer decisionsto dismiss, and even allows individual employers to have a role in setting thosestandards by accepting uncritically any workplace disciplinary codes the employermay adopt.

The rejection of the RORR test in Haddon was highly unorthodox, and the EAT didnot have the authority to discard the CA precedents that established it. However, theCA decision in Madden reaffirming the RORR test emphasized some of the worstelements of the test, and the illustration of the test offered by Mummery LJ creates aRORR that would appear to tolerate dismissal for any form of misconduct, no matterhow minor. The later CA decision in Sainsbury’s establishes very low expectations foremployer investigation of misconduct, implying that it would be sufficient for theemployer to conduct the investigation solely with the view of justifying dismissal. Theresponse to the challenge posed by Haddon to the RORR test resulted in the creation oftwo new precedents that emphasize the worst aspects of the RORR test and giverenewed force to the legitimate criticisms of the test.

The EAT decision in Beedell offered a better way to respond to Haddon, butunfortunately it was not taken up by the CA. The suggestion in Beedell that the RORRtest be interpreted in line with the Bolam test used in medical negligence cases wouldhave mitigated some of the harshest aspects of the RORR test, replacing the standardof the reasonable employer most inclined to dismiss with the standard of a rationaltheory of management. The Bolam test as currently used in medical negligence law ismodified by the Bolitho approach, which allows a court to consider not just whether aparticular medical practice is accepted by a body of medical opinion, but whether thatbody of medical opinion has a rational justification for preferring that practice overalternatives. If the Bolam test were imported into unfair dismissal along with theBolitho approach, the RORR test would lose much of its harshness and its excessivedeference to the established practices of employers. The Beedell interpretation of theRORR test would be in accord with the language of section 98 of the ERA 1996, thoughthere would be some degree of conflict with the judicial authorities that created theRORR test. The offence to established precedent would be relatively minimal, however,and would be justified by the improved ability of unfair dismissal law to achieve itsgoals of reducing the degree of subordination of employees to employers andprotecting the dignity and autonomy of employees.

Notes

1. This remedy is rarely used, with only eight out of the 3,425 unfair dismissalcases upheld in 2005-2006 resulting in reinstatement or reengagement: ‘‘EmploymentTribunals Service Annual Report and Accounts 2005-2006’’, DTI, Table 3, p. 30.

2. British Home Stores v. Burchell [1978] IRLR 379, EAT.

3. Iceland Frozen Foods v. Jones [1982] IRLR 439, EAT.

4. Haddon v. Van Den Bergh Foods Ltd [1999] IRLR 672, EAT.

5. HSBC plc (formerly Midland Bank plc) v. Madden [2000] IRLR 827, CA.

6. Beedell v. West Ferry Printers Ltd [2000] IRLR 650, EAT.

7. Bolam v. Friern Hospital Management Committee [1957] 2 AER 118, QB.

8. ERA 1996, s 86.

9. See Horkulak v. Cantor Fitzgerald International, 2004, RLR 942, CA in which the CAheld a wrongfully dismissed employee could recover damages for the loss of the

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opportunity to be paid a discretionary bonus that was part of the remunerationstructure of the contract of employment.

10. For example ERA 1996, ss. 98B, 99, 100, 101, 102, 103, 104, 104A, 104B, 104C, 105.

11. Union of Construction Allied Trades and Technicians v. Brain [1981] ICR 542.

12. ILEA v. Gravett [1988] IRLR 497. In A v. B [2003] IRLR 405 the EAT held that theworkplace misconduct that also constitutes a serious crime may require moreinvestigation by the employer because of the stigma that would attach to an employeedismissed for such a reason.

13. Parr v. Whitbread [1990] ICR 427.

14. British Home Stores v. Burchell [1978] IRLR 379 EAT. Approved in Weddel (W) & Co.Ltd v. Tepper [1980] IRLR 96.

15. Ibid., p. 380.

16. Devis & Sons Ltd v. Atkins [1977] IRLR 314, HL. National Heart & Chest HospitalsBoard of Governors v. Nambair [1981] IRLR 196, EAT establishes that informationrelevant to the dismissal that arises during an employer’s internal appeals process maybe considered in determining the fairness of the dismissal.

17. British Labour Pump Co. Ltd v. Byrne [1979] IRLR 94, EAT.

18. Polkey v. AE Dayton Services Ltd [1987] IRLR 503, HL.

19. Devis & Sons Ltd v. Atkins [1977] IRLR 314, HL, at 317.

20. Polkey v. AE Dayton Services Ltd [1987]IRLR 503, HL, at 505.

21. Strouthos v. London Underground Ltd [2004] IRLR 636, CA.

22. Anglian Home Improvements Ltd v. Kelly [2004] IRLR 793, CA; See Post Office v.Liddiard [2001] EWCA Civ 940 and Nkengfack v. Southwark London BC [2002] EWCACiv 711.

23. British Leyland UK Ltd v. Swift [1981] IRLR 91, CA.

24. Iceland Frozen Foods Ltd v. Jones [1982] IRLR 439, EAT at 446. Note that s.57(3) of theEmployment Protection (Consolidation) Act 1978 referred to in the quotation isbasically the same as s. 98(4) of the ERA 1996.

25. Haddon v. Van Den Bergh Foods Ltd [1999] IRLR 672, EAT.

26. Ibid., p. 676.

27. Midland Bank plc v. Madden [2000] IRLR 288, EAT.

28. Ibid., p. 295.

29. Post Office v. Foley, HSBC plc (formerly Midland Bank plc) v. Madden [2000]IRLR 827,CA.

30. Ibid., p. 831.

31. Anglian Home Improvements Ltd v. Kelly [2004] IRLR 793, CA.

32. Ibid., p. 799.

33. Sainsbury’s Supermarket Ltd v. Hitt [2003] IRLR 23, CA.

34. Ibid., p. 28.

35. Ibid., p. 27.

36. ERA 1996, s. 98A.

37. ERA 1996, s. 120(1A).

38. ERA 1996, s. 120(1B).

39. ERA 2008, s. 1.

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40. Queen Elizabeth Hospital NHS Trust v. Ogunlana, UKEAT/0372/06/DM, EAT;Rhondda Cynon Taff Borough Council v. Close, UKEAT/0503/07/MAA, EAT; Celebiv. Compass Group UK and Ireland Ltd (trading as Scolarest) [2009] All ER (D) 172,EAT.

41. Union of Construction Allied Trades and Technicians v. Brain [1981] ICR 542, CA.

42. Dobie v. Burns International Security Service (UK) Ltd [1984] IRLR 329, CA.

43. Ibid., p. 332.

44. Associated Provincial Picture Houses, Limited v. Wednesbury Corporation [1948] K.B.223, p. 230.

45. British Leyland Ltd v. Swift [1981] IRLR 91, CA, p. 98.

46. Saunders v. Scottish National Camps Association [1980] IRLR 174, EAT.

47. Beedell v. West Ferry Printers Ltd [2000] IRLR 650, EAT.

48. Bolam v. Friern Hospital Management Committee [1957] 2 AER 118, QB.

49. Beedell v. West Ferry Printers Ltd [2000] IRLR 650, EAT, p. 656.

50. Bolitho v. City and Hackney Health Authority [1998] AC 232, HL.

51. Ibid., p. 242.

52. Beedell v. West Ferry Printers Ltd [2000] IRLR 650, EAT, p. 656.

53. British Leyland Ltd v. Swift [1981] IRLR 91, CA, p. 98.

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Corresponding authorTor Brodtkorb can be contacted at: tbrodtkorb@aus.edu

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