R & M Gaskarth v Campbell – Unfair dismissal and the range of reasonable responses test

The case of R & M Gaskarth v Campbell revolves around the fairness of the dismissal of a hotel manager where the takings for the hotel had been consistently falling for a number of years and the manager was deemed to have a negative attitude by his line manager. The Employment Tribunal concluded that the dismissal was outside of the range of reasonable responses and therefore unfair as the Respondent had drawn unfair comparisons with the takings of other pubs in the locality. The Employment Appeal Tribunal upheld the Respondent’s appeal as it believed the Respondent had substituted its own view on fairness for that of the Respondent.

The facts in R & M Gaskarth v Campbell

Mr Campbell (“the Claimant”) commenced employment with R & M Gaskarth (“the Respondent”) at the Eagle Hotel (“the hotel”) in Rochdale in October 2005 as manager. The Respondent owns 50 to 60 public houses in the north-west of England. The Claimant initially ran the hotel together with his partner but they separated in or around June 2007.

By October 2009 the takings of the hotel had dropped significantly and the Respondent became concerned that the Claimant’s break-up had negatively affected his ability to run the premises. The Respondent therefore set certain revenue targets for the Claimant to meet. The Claimant consistently failed to meet these targets and was given a written warning in June 2010, with it being pointed out to him that other pubs in the area had not experienced such a significant fall in revenue. The Claimant was unhappy with this and pointed out a number of “adverse factors” which were negatively affecting his ability to increase custom at the hotel, including the closure of a number of local businesses, the Respondent’s policy not to allow entertainment in its pubs (such as television and gaming), the fact that the Claimant was single whereas the other pubs were managed by partners, and the amount of competition locally for customers. The Claimant was unable to increase the revenue after 2010 and was dismissed by the Respondent in November 2010 for the reason of capability, namely his inability to create a “mein host” atmosphere at the pub and his alleged negative attitude.

The Claimant subsequently complained to the Employment Tribunal of unfair dismissal. The Employment Tribunal found the Respondent liable for unfair dismissal, concluding that the dismissal fell outside of the range of reasonable responses in the circumstances. This was primarily based upon the fact that the Employment Tribunal felt it too crude to draw a simple comparison between the circumstances at the Eagle and other public houses in the vicinity. However, a Polkey reduction of 40% was made. The Respondent appealed on liability, the Polkey reduction and mitigation of loss.

The law relating to unfair dismissal and the range of reasonable responses test (the “Burchell test”)

Under s.94 of the Employment Rights Act 1996 employees have the right not to be unfairly dismissed (subject to certain other qualifications). Under section 98 if an employee is dismissed the employer must put forward a potentially fair reason for the dismissal, otherwise the dismissal will be unfair. The agreed potentially fair reason in the circumstances was capability. Once a potentially fair reason is established for the dismissal the Claimant must demonstrate, on the balance of probabilities, that their dismissal was either substantively or procedurally unfair. We will deal with the issue of substantive fairness in this post.

In order for a dismissal to be substantively fair the dismissal must fall within the range of reasonable responses in the circumstances. This means that the dismissal of the employee must be reasonable. The evaluation of its reasonableness depends on three factors:

  1. Whether a fair investigation had been carried out
  2. Whether the Respondent had an honest belief that the allegations made were true
  3. Whether the Respondent had a genuine belief that the allegations made were true

If the Employment Tribunal believes that the Respondent has failed to fulfil any one (or more) of the criteria in the above test then the dismissal will be deemed outside of the range of reasonable responses and therefore substantively unfair (and hence an unfair dismissal). However, the Employment Tribunal can’t substitute its own view on the fairness of the dismissal for the subjective view of the Respondent at the time of the dismissal. The fairness of the dismissal is therefore premised upon what facts the Respondent had before it at the time of the dismissal and whether it was justified in believing what it believed based on those facts.

The Employment Appeal Tribunal’s judgment in R & M Gaskarth v Campbell

The Employment Appeal Tribunal decided that the Respondent’s decision that the fall in the takings of the Eagle was the Claimant’s fault was not an unreasonable one in the circumstances. Further, the Claimant’s dismissal was not a “spur of the moment” dismissal but the issues had been ongoing for at least 18 months and was based primarily upon the Claimant’s failure to create a “mein host” atmosphere. The Claimant had been given time to improve but had failed to do so. The Employment Tribunal therefore allowed the appeal against the finding of unfair dismissal and remitted the case to a fresh Employment Tribunal.

Our specialist employment lawyers’ views on R & M Gaskarth v Campbell

The Employment Appeal Tribunal makes it quite clear in this case that they do not believe that the Claimant’s dismissal was an unfair one, based upon the Respondent’s knowledge at the time of the dismissal. In our view the decision of the Employment Appeal Tribunal was the correct one. As harsh as it may have been on the Claimant the Respondent had given the Claimant a significant period of time to redress the fall in takings and had based his dismissal upon both his failure to increase the takings and his failure to create a “mein host” atmosphere.

Redmans are no win no fee unfair dismissal specialists and represent employers and employees in the Employment Tribunal.