The role of external HR consultants

Posted by Natalie Painter on
External HR consultants are becoming an increasingly common, and useful, tool for small to medium size businesses that do not have the resources or demand for a full size HR department. 

When a disciplinary or grievance becomes complex it may be necessary to hire an external consultant to help ensure the process or hearing is independent and impartial.  Two recent Employment Appeal Tribunal (EAT) cases have given some clarity as to how such consultants should be used. 

One case in particular has confirmed that the recommendation of an HR consultant does not necessarily have to be followed to guarantee a fair procedure.

The first case centred on an employee, Miss Kisoka, who had been dismissed for gross misconduct by her employer, Rydevale Day Nursery, for starting a fire at the nursery. Miss Kisoka appealed against her dismissal and as Rydevale did not have sufficient internal resources it decided to engage an independent panel to hear her appeal.

On hearing the appeal, the panel felt there was insufficient evidence to dismiss Miss Kisoka and overturned Rydevale's decision. However, Rydevale chose not to implement the panel's recommendation and the decision to dismiss stood.  Miss Kisoka subsequently brought a claim in the Employment Tribunal (ET) for unfair dismissal on the grounds that Rydevale should have followed the panel's recommendation.

The ET found in favour of Rydevale, in a judgment which the EAT agreed with.  The EAT held that the dismissal was fair in all the circumstances and Rydevale had followed a fair procedure, which gave Miss Kisoka an effective appeal hearing.  The EAT based its decision on several factors including taking into account the size and resources of Rydevale.  It noted there was no legal requirement for Rydevale to have even engaged an external panel, let alone follow its recommendations.  In particular, the EAT felt it was important that there were no terms of engagement between Rydevale and the panel confirming that Rydevale would follow the panel's decision. Importantly the EAT also considered that Rydevale's initial investigation had been reasonable.

Employers will be encouraged by this decision indicating that they will not be bound by the decisions of independent panels or consultants who they choose to engage.  However, it is important to note this decision very much turned on the facts and the reasonableness of Rydevale prior to engaging the external consultants.

A second case acknowledges that small employers are entitled to hire external HR consultants and accept their recommendations. In this case the Managing Director had seen a senior manager engaging in sexual activity with a junior colleague. A Dictaphone recording of the two individuals speaking in derogatory terms about the Managing Director had also been found.  Being a small company of just nine employees, the disciplinary process was outsourced to external HR consultants.  They recommended the employee be dismissed for gross misconduct, a decision which the Managing Director accepted. 

The ET found that the principal reason for dismissal was the sexual activity on company premises. It considered that this was not gross misconduct and that dismissal was outside the band of reasonable responses.  The company appealed.

In deciding whether the decision to dismiss had been reasonable the EAT looked at the reason for dismissal including all the evidence that made up the decision to dismiss an employee and not just part of it.  The EAT found that the HR consultant, whose recommendation was relied on, had also taken into account derogatory remarks made by the employee about the company and therefore held that the Tribunal had erred by substituting its own view of as to the reasonableness of the dismissal.

The key point to note from both these cases is that delegating disciplinary duties to external HR consultants or other experts is a reasonable step for an employer to take, especially where they are a small organisation. Employers of all sizes will also be reassured by the EAT's implicit acceptance that consenting sexual activity in the workplace could be considered gross misconduct.

Please note: Blake Morgan offers an HR Consultancy service to assist with a range of HR issues including disciplinary and grievance investigations and hearings.  Please contact David Miles for further details.

Cases:

Kisoka v Ratnpinyotip (t/a Rydevale Day Nursery)

GM Packaging v Haslem

About the Author

Natalie advises employers at all stages of Employment Tribunal proceedings and regularly provides bespoke training to clients on a variety of matters such as equal opportunities and employment law updates.

Natalie Painter
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023 8085 7049

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