Reilly v Sandwell Metropolitan Borough Council [2018] UKSC 16

A primary school head teacher was summarily dismissed for failing to disclose her close relationship with a partner convicted of making indecent images of children. The Supreme Court upheld the tribunal's finding that her dismissal was not unfair, confirming her duty to disclose.

Facts

Ms Reilly, an experienced teacher with an exemplary disciplinary record, was appointed head teacher of a primary school maintained by Sandwell Metropolitan Borough Council, taking up the post on 1 September 2009. She had a close, non-sexual, non-cohabiting friendship with Mr Selwood, with whom she had jointly purchased an investment property in 2003. On 25 February 2009, while she was staying overnight at that property, Mr Selwood was arrested on suspicion of downloading indecent images of children. On 1 February 2010 he was convicted of making indecent images of children, receiving a three-year community order and a sexual offences prevention order prohibiting unsupervised access to minors.

Ms Reilly did not disclose the arrest during her application process, nor did she disclose the conviction to the school’s governing body or to Sandwell. Her friendship with Mr Selwood continued, including a joint holiday in April 2010. When Sandwell learned of the conviction in June 2010, it suspended her and convened a disciplinary panel, which in May 2011 found her non-disclosure to amount to gross misconduct and dismissed her summarily. Her internal appeal was dismissed in July 2011.

The Employment Tribunal found the dismissal substantively fair (though procedurally unfair in an irrelevant respect), applied a 90% Polkey reduction and assessed contributory conduct at 100%. The EAT and a majority of the Court of Appeal (Elias LJ dissenting) upheld the tribunal’s decision.

Issues

The principal issue was whether the Employment Tribunal had been entitled to conclude, under section 98(4) of the Employment Rights Act 1996, that Ms Reilly’s dismissal fell within the range of reasonable responses open to Sandwell. This turned on whether she was under a duty to disclose her relationship with Mr Selwood to the governing body, and whether non-disclosure, coupled with her continuing refusal to accept she had been wrong, reasonably warranted dismissal.

Lady Hale identified two further points of general public importance which were not argued and therefore not decided: (i) whether “conduct” under section 98(2)(b) must amount to a breach of contract; and (ii) whether the test in British Home Stores Ltd v Burchell [1980] ICR 303, as extended by Foley v Post Office [2000] ICR 1283, correctly governs the section 98(4) inquiry.

Arguments

Appellant (Ms Reilly)

Ms Reilly challenged the tribunal’s acceptance that she had been under a duty to disclose her relationship with Mr Selwood, contending that there was no evidence that her particular relationship engaged the governing body’s safeguarding functions. She argued that absent such a duty, her non-disclosure could not properly found a dismissal within the range of reasonable responses.

Respondent (Sandwell)

Sandwell contended that the duty of disclosure arose under Ms Reilly’s contract of employment, reinforced by section 175(2) of the Education Act 2002 and her job description, which required her to advise, assist and inform the governing body in discharging its safeguarding duties. Ms Hannett submitted that as head teacher Ms Reilly was “the eyes and ears of the governors in the school”, and that the risk posed by Mr Selwood required assessment by the governors, not by her.

Judgment

The Supreme Court unanimously dismissed the appeal. Lord Wilson (with whom Lord Carnwath, Lord Hughes and Lord Hodge agreed) held that the tribunal had been entitled to conclude that Ms Reilly’s non-disclosure amounted to a breach of duty and that dismissal fell within the range of reasonable responses.

The section 98(4) inquiry

Lord Wilson observed that the tribunal’s function is not to answer directly whether a dismissal was unfair, but whether it fell within the range of reasonable responses to the reason shown, preceded by a reasonable amount of investigation. Appellate bodies are at a further remove, being confined to points of law under section 21(1) of the Employment Tribunals Act 1996. He noted that the three Burchell requirements were originally directed to the first part of the statutory inquiry (the reason for dismissal) but had been extended by the Court of Appeal in Foley v Post Office to cover reasonableness under section 98(4). He considered that this extended application had caused no harm, since in practice it simply required inquiry into whether dismissal was within the range of reasonable responses following reasonable investigation.

Duty of disclosure

Section 175(2) of the Education Act 2002 places safeguarding duties on the governing body. Ms Reilly’s job description required her to assist the governors in fulfilling those duties, and her contract identified failure to report matters she was bound to report as potential misconduct. Lord Wilson referred to the Children (Disqualification) Regulations 2009 as illustrating Parliament’s recognition that sexual offenders against children may pose risks indirectly, through their close associates, who may be unaware of how they are being used to facilitate access.

Mr Selwood’s recent, serious conviction, combined with Ms Reilly’s close relationship with him and her unique position as head teacher (with unrivalled knowledge of pupils and control over access to school premises), created at least a potential risk which required assessment by the governors. It was for them, not her, to carry out that assessment. Had she disclosed the relationship, it was highly unlikely she would have been dismissed.

Reasonableness of dismissal

Lord Wilson concluded that the tribunal was entitled to find that dismissal was a reasonable response, particularly because Ms Reilly’s continuing refusal to accept her breach of duty demonstrated a lack of insight rendering her unsuitable to continue running the school.

Lady Hale’s concurrence

Lady Hale agreed that Ms Reilly had breached her contract and that dismissal was reasonable, even arguably inevitable, given her failure to acknowledge fault. She flagged, however, that two significant questions of law remained open: whether non-contractual conduct can found a fair dismissal, and whether the Burchell test correctly reflects section 98(4). She noted Sedley LJ’s description in Orr v Milton Keynes Council [2011] ICR 704 of section 98(4) as

both problematical and contentious

and referred to the “cogently reasoned” decision in Haddon v Van den Burgh Foods [1999] ICR 1150, overruled in Foley. She explained that destabilising the 40-year-old Burchell approach, which Parliament had not altered and which practitioners apparently accepted as workable, would be irresponsible absent full argument.

Implications

The decision confirms that a head teacher’s failure to disclose a close personal relationship with a person recently convicted of sexual offences against children can properly amount to misconduct justifying summary dismissal, where disclosure is required to enable the governing body to discharge its statutory safeguarding functions under section 175(2) of the Education Act 2002. The judgment emphasises that risk assessment in such circumstances is a matter for the governors and not for the employee to determine unilaterally.

The case reinforces the orthodox approach to section 98(4): tribunals must ask whether dismissal fell within the range of reasonable responses, and appellate courts may intervene only on points of law. An employee’s persistent refusal to acknowledge wrongdoing may itself bolster the reasonableness of dismissal by evidencing lack of insight.

Importantly, the Supreme Court expressly declined to reconsider two questions of potentially wide significance: whether “conduct” under section 98(2)(b) must be contractual, and whether the Burchell/Foley framework properly governs the statutory reasonableness inquiry. Lady Hale’s observations signal that these issues remain open for future challenge on full argument, though the long-standing practice, parliamentary acquiescence, and practitioner acceptance weigh against easy displacement. The decision is therefore significant both for its practical guidance on safeguarding-related disclosure duties in schools and for its candid acknowledgement of unresolved doctrinal tensions in unfair dismissal law.

Verdict: Appeal dismissed. The Supreme Court unanimously upheld the Employment Tribunal’s decision that Ms Reilly’s summary dismissal was not substantively unfair, finding that the tribunal was entitled to conclude she was under a duty to disclose her relationship with Mr Selwood and that dismissal fell within the range of reasonable responses open to Sandwell.

Source: Reilly v Sandwell Metropolitan Borough Council [2018] UKSC 16