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Employment Law Case Update: Reilly v Sandwell Metropolitan Borough Council

Apr 5, 2018

In the case of Reilly v Sandwell Metropolitan Borough Council, Ms Reilly was head teacher at a primary school, and had failed to disclose her close personal relationship with a man (S), who had been convicted of making indecent images of children.

The relationship was not sexual and they were not co-habiting, but they jointly owned a property. S was sentenced to a community order and a sexual offences prevention order forbidding him from having unsupervised contact with children under the age of 18. Upon discovery of the relationship the school suspended Ms Reilly and began a disciplinary process.

The school alleged Ms Reilly had committed a serious breach of an implied term in her employment contract to disclose relationships with convicted sex offenders. The school believed that this amounted to gross misconduct and were concerned by Ms Reilly’s failure to accept her relationship with S posed a risk to the children. Ms Reilly was summarily dismissed.

Ms Reilly brought a claim for unfair dismissal, arguing that there was no duty on her to disclose her relationship with S. The ET found the decision to dismiss her was not unfair. The Employment Appeal Tribunal and the Court of Appeal agreed, dismissing Ms Reilly’s appeal.

Ms Reilly appealed to the Supreme Court, which also dismissed, finding the decision to dismiss was fair and within the range of reasonable responses. The SC applied the test for unfair dismissal as laid out in the cases of Burchell and Foley which required determination of whether the dismissal was within a range of reasonable responses, and whether a reasonable amount of investigation had taken place.

The SC turned to whether the test laid down in Burchell is correct. Lord Wilson comments “It is at once apparent that the three requirements identified [in Burchell] do not well fit the inquiry mandated by what is now section 98(4). It is indeed clear that, on the contrary, they were directed to the first part of the inquiry under what is now section 98(1) to 98(3).” He concludes that due to lack of argument on this point, there has been no harm done in this case and that case law has developed a band of reasonable responses test, along with the requirement for reasonable investigation, and that this is consistent with the statutory test in section 98(4).                                                                                                                                                   

In her judgement, Lady Hale stated that had the case been argued differently the Supreme Court may have been presented with an opportunity to consider two points of law of general public importance. Those were:

  • Whether a dismissal based on an employee’s conduct could ever be fair if that conduct was not in breach of the employee’s contract of employment. This point could arise in cases where the employer pleads conduct as the potentially fair reason for dismissal but also where the employer pleads some other substantial reason as the reason for dismissal.
  • Whether the approach laid down by the EAT in Burchell was correct.

Lady Hale said that in the absence of argument on either of these points then the law remained unchanged and expressed no view as to whether this was correct.

The impact of this case is the judgments of Lord Wilson and Lady Hale who have laid down a challenge to 40 years’ worth of case law on what section 98(4) requires. This will likely lead to further litigation which could have a significant impact on unfair dismissal in future.

We will keep a close eye on this and will update you with any developments.

ENDS

This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice.