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Overlap of Conduct and Capability Reasons

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[Thanks to Laurie Anstis of Boyes Turner who is standing in for Daniel Barnett during holiday absence, and to Dr John McMullen of Wrigleys Solicitors LLP for preparing this case summary]

If a dismissal letter gives misconduct as the reason for dismissal, but the employment tribunal ET3 pleads "incapability", does the wrong label in the ET3 prevent a tribunal from dealing with the claim on the basis of misconduct?

Not if there is no prejudice to the claimant, says the EAT in Screene v Seatwave.

Mr Screene was a financial controller for an events ticketing business. It was the victim of a fraud when approximately €1.7m were lost from its German bank account. The employer took the view that Mr Screene was grossly negligent in failing to spot this and summarily dismissed him. The employment tribunal found the serious negligence in the employee's failings amounted to gross misconduct and that the dismissal was fair.

On appeal it was argued the tribunal should not have departed from the employer's reason of capability as pleaded in the ET3. Accordingly, it was argued, the tribunal substituted its own reason for dismissal (conduct) in place of the employers pleaded reason (capability) and, as a consequence, failed to direct itself to the relevant law in relation to capability.

The EAT disagreed, relying on comments by Waite J in Hotson v Wisbech Conservative Club [1984] ICR 859. A tribunal was entitled to make its decision on the basis of what it considered to be the real reason for dismissal, provided the claimant was not thereby prejudiced. There was no such prejudice in the present case. At all times the dismissal had been grounded on the same facts, the tribunal plainly conducted the case on the basis of misconduct, and the claimant had acknowledged that he had been summarily dismissed by reason of gross misconduct.