Will an Employee’s Failure to Disclose Material Information to their Employers Warrant Dismissal?

Partner Sue Dowling, in our Employment Law team, discusses whether a headteacher was unfairly dismissed following the discovery of a non-disclosure.

Last month’s Supreme Court decision in Reilly v Sandwell Metropolitan Borough Council represents an important and noteworthy case, particularly for those employees in the education sector. The case itself involved the Claimant, Ms Reilly, a head teacher of a primary school, who had failed to disclose a close relationship with a convicted sex offender. The Supreme Court had to consider whether Ms Reilly had been unfairly dismissed by the school following the discovery of the non-disclosure.

Facts

Shortly after becoming head teacher, a close friend of Ms Reilly’s, Mr Selwood, was convicted of downloading indecent images of young children to his computer in early 2010. While the relationship was purely platonic and the pair were not cohabiting, amongst other things, they did jointly own an investment property and had enjoyed a holiday together.  

Upon learning of Mr Selwood’s conviction, and particularly that Ms Reilly enjoyed a close relationship with him, the school suspended her for her failure to disclose this information to the school’s governing body. The school concluded that this failure was a serious breach of an implied term of her contract of employment (i.e. to disclose any relationships with, or close proximity to, convicted sex offenders) amounting to gross misconduct, and dismissed Ms Reilly summarily. The school was also concerned by Ms Reilly’s consistent refusal to acknowledge and accept that her relationship with Mr Selwood might put pupils at risk. Following Ms Reilly’s unsuccessful appeal against her dismissal, she brought a claim for unfair dismissal, arguing that she was under no duty to disclose the relationship.

Employment Tribunal, Employment Appeals Tribunal & The Court of Appeal

The employment tribunal held that Ms Reilly’s actions did amount to gross misconduct, that the school had genuinely held this belief and it had reasonable grounds to hold this belief; therefore the dismissal was not unfair. While the tribunal found that Ms Reilly’s appeal hearing had been so unsatisfactory as to render her dismissal procedurally unfair, it determined that even if the appeal hearing had been satisfactory there was a 90% chance she would have been dismissed regardless. In coming to this conclusion, the tribunal also found that Ms Reilly had contributed to her dismissal by blameworthy conduct and assessed her contribution at 100%.

Ms Reilly’s subsequent appeals were dismissed by the EAT and Court of Appeal.

Supreme Court decision

The Supreme Court unanimously dismissed Ms Reilly’s appeal, determining that her failure to disclose Mr Selwood’s convictions was a breach of an implied term of her contract of employment and did amount to gross misconduct. The case therefore turned on whether the dismissal was fair within the meaning of section 98(4) Employment Rights Act 1996 (“ERA 1996”), namely whether the dismissal was within the range of reasonable responses, and whether it had been preceded by a reasonable amount of investigation. The court acknowledged that the proper approach to the inquiry was the Burchell Test, which involves the following three elements:

1. Does the employer have a belief that the employee is guilty of the misconduct in question?
2. Are there reasonable grounds to sustain that belief?
3. Prior to forming that belief, did the employer carry out a reasonable investigation?

In applying that test, Lord Wilson, in his lead judgment, said it was reasonable for the school disciplinary panel to have concluded that Ms Reilly’s non-disclosure of her friendship with Mr Selwood not only amounted to a breach of duty, but also merited her dismissal.

The Supreme Court found Ms Reilly was under a contractual duty to assist the school’s governors in discharging its duty to exercise their functions with a view to safeguarding the pupils of the school. While Ms Reilly fervently rejected the possibility that Mr Selwood posed a safeguarding danger, Lord Wilson identified several laws which show that Parliament recognised sexual offenders represent a threat to children not just directly, but also indirectly by operating through those with whom the children associate. Mr Selwood’s close relationship with Ms Reilly therefore posed a potential risk to children. This risk required the assessment of the school’s governing body and it was not for Ms Reilly to determine and conduct herself.

Comment

Employee’s duty to disclose

While the rationale behind Ms Reilly’s dismissal is clear, namely she had a duty to disclose her relationship with a convicted sex offender and the response to dismiss her was a reasonable one, the court’s decision, unhelpfully for teachers, does not shed light on when that duty actually arises and in what circumstances a teacher is justified in not disclosing this type of information. Although this particular case is more a concern for employees, to avoid any ambiguity on this topic and to justify any dismissal for non-disclosure, employers should include clear definitions and examples of any reporting obligations and consequences for employees in their relevant HR policies.

Further, this case acts as a useful reminder to employers of the requirement in unfair dismissal cases to ensure that a potentially fair reason for dismissal is identified, together with ensuring a fair procedure is undertaken throughout.

Will the Burchell Test be challenged?

It is significant to note that both Lord Wilson, and Lady Hale, in her concurring judgment, stated the Burchell Test did not fit entirely well within the second limb of the unfair dismissal test (s.98 (4) ERA 1996) as it also deals with the first limb (ss. 98 (1)-(3)) concerning the reason for dismissal.  Whilst neither Lord Wilson nor Lady Hale conclude the test was or was not correct, they appear to in effect, invite a potential challenge to the longstanding Burchell Test.

For further information or legal advice, please contact law@blandy.co.uk or call 0118 951 6800.