Mr A Phillips v Young & Co.’s Brewery, P.L.C. — 2021

Mr Phillips was the General Manager of The Northcote, where the Respondent placed particular emphasis on stock and cash controls. The tribunal reviewed two stock audits on 16 October 2018 and 4 December 2018, together with intervening emails, meetings and Mr Phillips' subsequent line checks and stocktakes. It accepted that the business had recorded serious stock and cash losses, and that Mr Phillips had not carried out the required level of line checking before the December audit.

The tribunal found that the Respondent had a potentially fair reason for dismissal, namely conduct under section 98(2)(b) of the Employment Rights Act 1996. It accepted that Mr Bowen and Mr Loughborough genuinely believed Mr Phillips had neglected stock management and failed to comply with the Business Risk Management Policy, particularly by not carrying out sufficient line checks. Applying the Burchell approach and the section 98(4) reasonable responses test, it also held that the investigation was reasonable in the circumstances.

The dismissal was nevertheless found unfair because the sanction was outside the band of reasonable responses. The tribunal placed weight on the fact that Mr Falarczyk had not clearly warned Mr Phillips that his job was at risk, on Mr Phillips' eventual response after 4 December 2018, when he began carrying out line checks and stocktakes, and on the extent to which the decision-makers did not properly take that later compliance into account. It also noted that the appeal decision did not cure the defect, because Mr Loughborough treated Mr Phillips' post-4 December conduct as evidence that he had chosen not to do the checks earlier, and did not properly reflect the change in behaviour after the company made the seriousness of the issue clear.

On contribution, the tribunal held that Mr Phillips had by his own admission failed to adhere to contractually based stock-checking standards and that this contributed substantially to the dismissal. It decided that it was just and equitable to reduce both any basic award and any compensatory award by 50%. It rejected any Polkey reduction and found no basis for an ACAS uplift.