British Home Stores Ltd v Burchell
British Home Stores Ltd v Burchell [1978] IRLR 379
Facts
British Home Stores Ltd. (the employers) appealed against an industrial tribunal's decision that their employee, Miss Burchell, had been unfairly dismissed. The case involved a suspicion or belief of Miss Burchell's misconduct, specifically dishonesty, which led to her dismissal. Miss Burchell had since returned to work for the employers and did not oppose the appeal. The employers had a specific procedure for staff purchases, requiring employees to follow a particular process for buying goods at advantageous terms, including obtaining a docket signed by a sales assistant from the relevant department.
An investigation was initiated after indications of dishonest activity. The employers' belief in Miss Burchell's guilt was based on four main matters:
A departure from the normal method of signing for internal purchases, revealing a "pattern of signing" for staff purchases among a group of four employees, including Miss Burchell, with a "preponderance of inter-signing" not explainable by accident.
A statement from another employee, Mrs. L., who implicated Miss Burchell in dishonest activities after being challenged herself. Although this was seen as an "accomplice" statement in criminal law terms, the employers were "within reason entitled to take into account" this piece of evidence.
An irregular purchase by another employee on Miss Burchell's docket, though the Employment Appeal Tribunal (E.A.T.) later concluded this factor played "no real part" in the employers' ultimate decision.
A matter concerning Mrs. L.'s purchase of sunglasses, where Mrs. L. allegedly paid for a cheaper pair (£2.99) while acquiring a more expensive polychromatic pair (£6.99) on a docket signed by Miss Burchell. Crucially, Miss Burchell "accepted" that she knew Mrs. L. was getting the goods "too cheap".
The industrial tribunal had accepted that the employers' interviews with the employees were conducted fairly, and that the employers acted throughout in the "utmost good faith".
Held
The Employment Appeal Tribunal (E.A.T.), led by Arnold J., allowed the appeal, finding that Miss Burchell had not been unfairly dismissed. The E.A.T. established a three-part test for determining the reasonableness of a dismissal based on misconduct, now commonly known as the "Burchell test":
The employer must establish the fact of their belief in the employee's guilt.
The employer must have reasonable grounds upon which to sustain that belief.
The employer must have carried out as much investigation into the matter as was reasonable in all the circumstances of the case at the stage they formed their belief.
The E.A.T. stressed that the industrial tribunal's task is not to adjudicate on the guilt or innocence of the employee nor to substitute its view on the quality of evidence, but rather to assess the reasonableness of the employer's belief and investigation. The appropriate standard is one of reasonableness, typically based on the balance of probabilities, not the higher criminal standard of being "sure" or "beyond a reasonable doubt".
Applying this test, the E.A.T. found:
The employers did entertain the belief of Miss Burchell's guilt.
The mutual signing pattern was a "suspicious circumstance" that was reasonable for the employers to consider.
Mrs. L.'s statement implicating Miss Burchell was a piece of evidence that the employers were "within reason entitled to take into account," and it was not unreasonable for them to have resisted a confrontation between Mrs. L. and Miss Burchell.
The sunglasses incident, particularly with Miss Burchell's acknowledgement of knowing Mrs. L. was paying too little, was considered "the most important of the grounds" for the employers' conclusion and provided reasonable material for a belief of guilt.
The industrial tribunal had implicitly accepted that the employer's investigation was fair and conducted in good faith.
The E.A.T. concluded that the industrial tribunal had erred by:
Departing from its proper function and embarking upon an independent evaluation of the evidence, rather than assessing whether the employer's conclusion was reasonable.
Being confused about the standard of proof, inappropriately referring to criminal law standards and failing to distinguish between evidence for reasonable belief and evidence for criminal prosecution.
Confusing the tasks of evaluating the reasonableness of the conclusion with the reasonableness of the investigation.
Therefore, the E.A.T. found that the employers had successfully discharged their burden under paragraphs 6(1) and 6(8) of Schedule 1 to the Trade Union and Labour Relations Act 1974, demonstrating a justifiable ground for dismissal and a reasonable decision-making process.
Comment
This case is a landmark decision in UK employment law, establishing the widely applied "Burchell test" for assessing the fairness of dismissals related to misconduct. It clearly delineates the limited role of an industrial tribunal (now employment tribunal) in such cases: not to retry the employee's guilt, but to evaluate the reasonableness of the employer's actions, belief, and investigation at the time of dismissal. The judgment underscores that an employer does not need to prove the employee's guilt beyond a reasonable doubt, or even on the balance of probabilities in an objective sense, but merely to demonstrate that they held a genuine belief based on reasonable grounds and a reasonable investigation.
The E.A.T. highlighted that the industrial tribunal's "confusion of thought" regarding the standard of proof and its tendency to re-evaluate the evidence objectively led it to an incorrect conclusion. The ruling implicitly places the onus on employers to conduct thorough, fair investigations and to genuinely believe in the employee's misconduct based on the evidence gathered, rather than necessarily being correct in their assessment of the employee's actual culpability.
