Judgments of the Supreme Court concerning employment law issues are fairly infrequent and usually worthy of attention. That is certainly so in the recent case of Reilly v Sandwell Metropolitan Borough Council which concerned an individual convicted of the surprisingly common offence of downloading indecent images of children.
Ms Reilly was the deputy head teacher of a primary school. She was in a close but not sexual relationship with a Mr Selwood and they did not live together. In 2003 they bought a property in joint names as an investment and Mr Selwood lived there, although he did not make any payments to Ms Reilly. Ms Reilly did not live there but she occasionally stayed overnight, including on 24 February 2009 when, the following morning, she awoke to the arrival of the police who searched the property and arrested Mr Selwood on suspicion of having downloaded indecent images of children. In September Ms Reilly was promoted to the post of head teacher at the school and in February 2010 Mr Selwood was convicted of making indecent images of children by downloading. On a scale of 1-5, the images ranged from level 1 to level 4. He was sentenced to a three year community order, made the subject of a sexual offences prevention order (which included a ban on him having unsupervised access to minors) and he was required to take part in a sex offenders’ programme.
Ms Reilly was immediately aware of the conviction and sentence but chose not to disclose them to the school governors or the local authority. In June 2010 the authority became aware of the conviction and she was suspended on full pay. She was required to attend a disciplinary hearing, the allegation being that, in failing to disclose her relationship with a man convicted of sexual offences concerning children, she had committed a serious breach of an implied term of her contract of employment, sufficient to warrant dismissal for gross misconduct. Following a hearing in May 2011 she was summarily dismissed. The panel was particularly concerned that Ms Reilly continued to refuse to accept that her continued association with Mr Selwood might pose a risk to children at the school. Her appeal against her dismissal failed.
In August 2011 she presented a complaint of unfair dismissal in the employment tribunal. There was a four day hearing in September 2012. The tribunal decided that her claim was unsuccessful, based on the following findings:
- The reason for dismissal was that she failed to disclose a relationship with a convicted sex offender.
- The local authority genuinely believed that the non-disclosure amounted to misconduct.
- There were reasonable grounds for the local authority to hold that belief (it was “obvious” that it was “a matter of misconduct”)
- Notwithstanding an otherwise exemplary record, dismissal was within the range of reasonable responses available to the authority.
Those of you who are familiar with dealing with employment and related HR issues will immediately recognise the approach adopted by the tribunal, which is frequently referred to as “the test in BHS v Burchell”.
On the face of it, all was not lost for Ms Reilly because the tribunal went on to conclude that the appeal was so badly handled that the dismissal was procedurally unfair. However, applying the test in Polkey v A E Dayton Services (what was the likely outcome if the process had been correct), the tribunal decided that there was a 90% chance that the appeal would still have been dismissed. As a result, her compensation was reduced by 90%.
However, that was not the end of the matter in the tribunal, which went on to consider to what extent, if any, Ms Reilly had contributed to her dismissal by blameworthy conduct. It decided that she had done so, to the extent of 100%.
So, in summary, save in respect of a procedural defect, the dismissal was found to be fair. Her appeals to the Employment Appeal Tribunal in 2014 and to the Court of Appeal in 2016 were both unsuccessful.
In his lead judgment in the Supreme Court, Lord Wilson considered the famous guidance in BHS v Burchell, described by Lord Justice Elias as the “classic formulation of the employer’s obligation in misconduct cases”. He also referred to the requirement under section 98(4) of the Employment Act 1996:
“…the determination of the question whether the dismissal is fair or unfair (having regard to the reason shown by the employer) —
(a) depends on whether in the circumstances (including the size and administrative resources of the employer’s undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee, and
(b) shall be determined in accordance with equity and the substantial merits of the case.”
Burchell and section 98(4) have been for many years the bread and butter of deliberations in unfair dismissal cases when considering whether or not the employer acted reasonably.
It had emerged in evidence at the tribunal that Ms Reilly had made enquiries of several people concerning whether or not she should disclose Mr Selwood’s conviction to the governors of the school, including a police officer, probation officers and officers of other local authorities, all of whom had replied that she was not under a duty to disclose. However, Lord Wilson disagreed:
“The objective decision-makers on the panel, all school governors, ruled that the case fell on the side of the line which required disclosure. Mr Selwood was the subject of a serious, recent conviction. The basis of his sentence was that he represented a danger to children. His relationship with the head of the school created, to put it at its lowest, a potential risk to the children. The risk required assessment. It was not for Ms Reilly to conduct the assessment; it was a function of the governors. As head teacher, she represented, as Ms Hannett on behalf of Sandwell submits, the eyes and ears of the governors in the school. Had she disclosed her relationship to them, it is highly unlikely that she would have been dismissed, still less that the tribunal would have upheld any dismissal as fair. Far more likely would have been the extraction by the governors of promises by Ms Reilly that she would not allow Mr Selwood to enter the school premises and perhaps, for example, that outside the school she would not leave information about pupils, for example stored electronically, in places where he might be able to gain access to it.”
It followed that the tribunal was entitled to conclude that Ms Reilly’s non-disclosure amounted to a breach of duty which merited her dismissal.
Supreme Court President, Lady Hale, raised two general points of interest arising from the case. The first is whether a dismissal based on an employee’s “conduct” can ever be fair if that conduct is not in breach of the employee’s contract of employment. In other words, can there be “conduct” (sufficient to dismiss) which is not contractual misconduct. Intriguingly, she also referred to the question of whether the guidance in BHS v Burchell when deciding the fairness of a conduct dismissal was correct. In doing so she has raised the possibility that, after all these years, it might not be the right approach. However, we will have to wait and see because the point was not expressly raised during the appeal and she therefore declined to express an opinion on the matter.