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Stuart Harris Associates Limited v A Gobudhun

[2023] EAT 145
An accountant quit because her boss made her do dodgy tax returns. A judge said the boss was dishonest. A higher court said the judge should have given the boss a chance to explain himself before calling him dishonest, but agreed the boss was unfair to the accountant and she was right to quit.

Key Facts

  • Ms. Goburdhun, a chartered accountant, was instructed by her employer, Stuart Harris Associates Ltd., to include estimated expenses in clients' tax returns, even when lacking proper documentation.
  • These estimates were routinely higher than actual expenses and were not disclosed to HMRC.
  • Ms. Goburdhun refused, citing concerns about unlawful accounting practices. She received a final written warning and resigned, claiming constructive dismissal.
  • The Employment Tribunal found in Ms. Goburdhun's favor, awarding her compensation and costs, and criticized Mr. Harris's conduct as dishonest or incompetent.
  • The employer appealed, arguing prejudgment, improper research, and a failure to properly put the dishonesty allegation to Mr. Harris.

Legal Principles

Apparent bias: The test is whether a fair-minded and informed observer would consider there was a real possibility the tribunal was biased. Premature expression of a concluded view can amount to apparent bias.

Southwark LBC v Jiminez [2003] ICR 1176

Tribunal's role in research: While tribunals can undertake limited research, especially where parties are represented, it's better to invite parties to conduct research. Parties must have a fair opportunity to address the research findings.

East of England Ambulance Service NHS Trust v Sanders [2015] ICR 293

Procedural irregularity: A tribunal making a finding of dishonesty (or bad faith) without giving the accused party an opportunity to respond is a serious procedural irregularity.

City of London Corporation v McDonnell [2019] ICR 1175

Test for dishonesty (Ivey v Genting): A two-stage test. First, ascertain the individual's actual state of knowledge or belief (subjective). Second, apply the objective standards of ordinary decent people.

Ivey v Genting Casinos (UK) Ltd [2018] AC 391

Fairness in judicial questioning: Judges can intervene to clarify ambiguities or identify the nature of the defence, but must avoid descending into the arena and acting as an advocate.

Serafin v Malkiewicz [2019] EWCA Civ 852

Outcomes

Appeal upheld in part.

The finding of dishonesty against Mr. Harris was set aside due to a serious procedural irregularity; he wasn't given the opportunity to address the allegation directly. However, the finding of unfair constructive dismissal remained as it was independent of the dishonesty finding.

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