Employment Law Digest May 2025 – Case law update

Unfair dismissal: seriousness of misconduct

In Hewston v Ofsted:

• Mr Hewston was employed by OFSTED as an Inspector.
• In the course of a school inspection, he brushed water off the head, and touched the shoulder, of a 12 year old student who had been caught in a rainstorm.
• A teacher observed the incident and felt it was “inappropriate and uninviting”. The student completed an incident form stating he didn’t feel comfortable with what had happened.
• There was never any suggestion of any improper motivation on the part of Mr Hewston: what he did was intended as a friendly act of sympathy and assistance.
• The school reported the incident to the officer designated by the local authority to deal with safeguarding allegations (LADO).
• The incident was reported to OFSTED as a case of inappropriate touching.
• In an email to OFSTED, the LADO advised: “On balance I feel the proportionate response is for the employer to investigate this matter internally with Andrew with consideration to raising awareness of professional boundaries and any training that may be required in support of this.”
• Following a disciplinary process, Mr Hewitson was summarily dismissed for gross misconduct, with the dismissing manager finding he had brought OFSTED into disrepute and shown no remorse.

Mr Hewitson’s claims against OFSTED for unfair and wrongful dismissal were dismissed by the Employment Tribunal (ET).

The ET Judge stated that: “While I, and indeed the LADO, may have considered that a sanction falling short of dismissal may be appropriate and further training might be given, it is not for me as an Employment Judge, or anyone else, to substitute our view for that of a reasonable employer, and one in the exceptional circumstances and remit of the respondent.”

Mr Hewston appealed to the Employment Appeal Tribunal (EAT). The EAT allowed the appeal and substituted a finding of unfair dismissal on the following basis:

1. The dismissal had been substantively unfair: Since Mr Hewston had not been told (OFSTED did not have a “no-touch policy” and there was no policy or guidance given in training on the subject of touching students), and he should not otherwise reasonably have understood that any touching of a pupil without consent might result in dismissal, it was not open to the ET Judge to find that it was reasonable for OFSTED to dismiss him for touching of the kind that occurred in this case.
2. The Judge should have found that the dismissal was procedurally unfair because OFSTED had failed to show Mr Hewston important documents (the LADO report, the statement of complaint received from the school and the pupil’s written account of the incident) which had been seen by the dismissing manager.

OFSTED appealed to the Court of Appeal which dismissed the appeal:

• It is common sense that it will not normally be fair to dismiss an employee for an act which they could not reasonably expect the employer to regard as serious misconduct.
• The Acas Code of Practice on Disciplinary and Grievance Procedures recommends that disciplinary procedures should give examples of acts which are regarded by an employer as acts of gross misconduct. Such examples cannot be comprehensive, and there will be cases where the question whether the employee should have appreciated that the employer would regard what they were doing as serious misconduct has to be determined as a matter of judgment having regard to the nature of the act and the surrounding circumstances.
• The EAT had asked itself the right question – whether it should have been obvious to Mr Hewston that what he did in brushing water from the child’s head was conduct for which he could expect to be dismissed. The only possible answer was no, given that, (a) the incident did not raise a safeguarding issue; (b) OFSTED did not have a “no-touch policy;” and (c) there was no policy or guidance given in training on the subject of touching students.
• Although there will be exceptions, as a general proposition, it is not reasonable for an employer to bump up the seriousness of the employee’s conduct only because the employee fails during the disciplinary process to show proper contrition or insight into what they are alleged to have done wrong.

This case is a reminder that employers must ensure their employees know the standards expected of them, whether this is set out in the disciplinary procedure or otherwise, and that appropriate training is given.

Racial harassment: the reasonable steps defence

In Campbell v Sheffield Teaching North Hospitals NHS Foundation Trust:

• Mr Campbell was an employee of the Trust and worked on a full-time basis as Branch Secretary of UNISON.
• Another employee, Mr Hammond had been a member of the union but had decided that he wanted to leave.
• During a discussion between Mr Campbell and Mr Hammond on 20 October 2020 about ongoing deduction of union subscriptions being taken from his wages, Mr Hammond became angry and referred to Mr Campbell as a “f***ing muppet”. As his frustration grew, he then referred to Mr Campbell as a “f***ing monkey”.
• The potential significance of the remark was that Mr Campbell is black and Mr Hammond is white.
• Mr Campbell brought a claim for racial harassment against the Trust and Mr Hammond, arguing that the Trust was liable for the harassment.

The Employment Tribunal (ET) found that the remark had been made by Mr Hammond, as described by Mr Campbell, but concluded on the evidence that it had not been made “in the course of” Mr Hammond’s employment, as is required under the Equality Act 2010 for a claim to succeed.

The ET accepted that there were several connections between the incident and the fact that Mr Hammond was employed by the Trust. It took place during Mr Hammond’s working day, albeit during a break. It happened in an office that was situated a few hundred metres from the ward on which Mr Hammond mainly worked. It related to the deduction of subscriptions for union membership that entitled Mr Hammond to the support of a union recognised by the Trust and in which Mr Campbell had an important role.

Looking at the evidence as a whole, however, the incident was not “in the course of” Mr Hammond’s employment. Mr Hammond did not have to be a union member to be employed by the Trust, his membership was a matter of personal choice, and the conversation in which the comment was made related to a personal dispute he had with the union about deduction of subscriptions.

The ET stated it did not accept “that the legislative intention was to hold an employer liable for abuse that might occur in a conversation between a union official and a union member about union membership matters, even if it did happen on the employer’s premises and during working hours… Applying the ordinary, everyday meaning of the term “during the course of employment”, the interaction between Mr Hammond and Mr Campbell did not occur during the course of Mr Hammond’s employment by the Trust.”

The ET also found that if it had accepted that Mr Hammond had made the racist remark in the course of employment, it would have concluded that the Trust was not liable for it because it had taken all reasonable steps to prevent Mr Hammond committing acts of racial abuse.

The steps taken by the Trust included:

1. an induction session attended by Mr Hammond at which the issue of “acceptable behaviour at work” and the Trust’s core values of “affording dignity, trust and respect to everyone” (referred to as “the PROUD values”) were emphasised;
2. annual performance assessment of Mr Hammond which covered the issue of whether he was acting in accordance with PROUD values;
3. the display of the PROUD values on posters in areas where Mr Hammond worked; and
4. mandatory training of Mr Hammond on equality and diversity issues every three years, most recently on 1 October 2020, when training was conducted in small groups and involved Mr Hammond going through a PowerPoint presentation. The presentation referred to the promotion of “a positive attitude towards equality and diversity by showing respect for others, valuing people’s differences and treating people with dignity.

Mr Campbell’s complaint before the ET was dismissed. His appeal to the Employment Appeal Tribunal (EAT) was refused:

The EAT was satisfied the ET had balanced the factors for and against the argument that the comment was made in the course of Mr Hammond’s employment. The weight it attributed to those factors was a matter for the tribunal as an industrial jury. Correctly, it did not approach its task by asking simply whether the conduct was related to an employment relationship. The factors it identified justified its decision.

The ET made a factual finding that, only days before the incident, the Trust provided Mr Hammond with mandatory equality and diversity training in a small group. It was clear enough that the ET had properly directed itself on the statutory defence of “all reasonable steps” and made a positive finding that the Trust had discharged the burden of proving that defence. That was an entirely understandable conclusion, particularly where no further steps that could have been taken were suggested either in the evidence or referred to in submissions to the ET.

This case is a good example of the proactive steps an employer can take to put effective policies and procedures in place and a programme of staff training – firstly, to prevent workplace harassment, and secondly, to give the employer a defence to a claim if it can show that it took “all reasonable steps” to prevent the employee from doing the discriminatory act or from doing anything of that description.

Reduction to compensation

In Gourlay v West Dunbartonshire Council:

• Mr Gourlay was employed by the Council between 2008 and 2015. He was summarily dismissed on the grounds of gross misconduct and brought a claim to the Employment Tribunal (ET) complaining of unfair dismissal, disability discrimination and victimisation.
• Mr Gourlay had multiple sclerosis and alleged that the Council had failed to provide office equipment that would have reduced the impact of his condition on his work.

The Employment Tribunal (ET) upheld the appellant’s complaints of (i) disability discrimination by failure to make reasonable adjustments; and (ii) victimisation.

At a subsequent remedy hearing, the ET accepted evidence that, as a result of the Council’s discriminatory conduct, Mr Gourlay developed a severe depressive episode which had made him permanently unfit for work.

When assessing compensation, the ET made an assessment of past and future wage loss and pension loss to the date of retirement but reduced that figure by 80% to reflect its assessment of the possibility that either:

• Mr Gourlay would have sought and obtained ill health retirement on grounds unrelated to his severe depressive episode or, alternatively,
• his employment with the Council would have terminated early, either by dismissal on the basis of an irretrievable breakdown in working relationships or by a mutually agreed termination of employment on agreed terms.

Mr Gourlay appealed to the Employment Appeal Tribunal (EAT) arguing that the ET had made an error in law in applying any reduction to what was, in fact, a career long loss.

The Council also appealed contending that the ET should have awarded loss only to the date on which it had concluded that Mr Gourlay would have been lawfully dismissed in any event.

The EAT upheld Mr Gourlay’s appeal:

• The task of an ET in assessing compensation for a respondent’s discriminatory acts and omissions is to put the claimant in the same position in which he would have been but for the unlawful conduct of the employer.
• The ET had considered the issue of whether Mr Gourlay’s employment might have been terminated lawfully. In so doing, however, it failed to recognise that, on the findings it had already made, the Council’s acts of discrimination had caused an ongoing psychiatric illness that resulted in Mr Gourlay being permanently incapable of working.
• The correct question for the ET was whether it was possible that a lawful and non-discriminatory dismissal would have had that same effect – but the ET did not consider that question. It considered only whether there would (or might) have been a lawful dismissal. It had failed to consider what the effect of a lawful dismissal may have been.
• There was also no proper basis in the ET’s findings of fact for a conclusion that Mr Gourlay’s non-psychiatric health conditions might have led to ill health retirement in any event. The conclusions reached by the ET were based entirely upon speculation rather than upon evidence.
• On the findings of fact it made, the ET should have regarded this as one of the rare class of cases where a career-long award for financial loss ought to have been made.
• The Council’s submission that financial loss inevitably ceased at the date when Mr Gourlay would have been lawfully dismissed was based upon the same error of law made by the ET, and was rejected.
• On the Council’s submission that there was evidence of other causes of Mr Gourlay’s ill health which were not related to the Council’s discriminatory acts and therefore his losses should have been apportioned between the different causes of harm, the EAT concluded that the ET had ultimately accepted the uncontradicted medical evidence that there was only one cause of the psychiatric illness, and that was the Council’s unlawful discrimination.