It is well established in law that tribunals must consider whether an employer acted within the band of responses of a reasonable employer when deciding whether a dismissal is unfair.

In First Manchester Ltd v Kennedy, the employment appeal tribunal (EAT) has confirmed that, in capability dismissals, the question is whether the employer acted reasonably in relying on the medical evidence.

What were the facts?

Mr Kennedy was a bus driver for First Manchester Ltd. He was seen by the occupational health doctor (Dr Farrand) in December 2001, who discovered that he had just had an operation for a serious heart condition. Mr Kennedy had not disclosed any of this to his employer, despite the obvious safety implications. He was given a final warning and returned to work in April 2002.

In January 2003, he suffered chest pains at work. He was taken to hospital but discharged himself before he was given a diagnosis, saying that a doctor had told him it was probably indigestion. Dr Farrand thought he might have had a minor heart attack and recommended that the DVLA be informed.

Mr Kennedy was then referred to an independent cardiologist for an assessment, who confirmed that he had a serious heart condition, but that he thought he was fit to work and that the DVLA would pass him as fit.

Dr Farrand then wrote a risk assessment based on this report and other medical evidence he had obtained, but concluded that Mr Kennedy should not be allowed to return to work because of the risks involved. He specifically referred to Mr Kennedy's reluctance to disclose all the available medical evidence to him. The company dismissed him.

What did the tribunal decide?

Mr Kennedy claimed unfair dismissal and the tribunal agreed, saying that the employer's actions fell short of what a reasonable employer would be expected to do. It specifically criticised First Manchester Ltd for not getting a third, medical opinion and for not consulting the DVLA's medical advisors. It felt this would have been reasonable "in view of the applicant's twenty years' service".

The central aspect of its decision, however, was its conclusion that Dr Farrand was biased against Mr Kennedy. As a result he had been "hostile" to Mr Kennedy's specialist and his judgement had been affected.

What did the EAT decide?

Relying on the lead cases of East Lindsey District Council v G E Daubney (1977, IRLR 181) and Liverpool Area Health Authority (Teaching) Central & Southern District v Edwards (1979, IRLR 471), the EAT said that the bus company was entitled to rely on the OHD's opinion.

It was particularly critical of the tribunal's accusation that Dr Farrand was "biased" against Mr Kennedy. It said that although he was not a cardiologist, he was entitled to come to a different conclusion to that of the independent consultant, not least because he had to consider different factors to compile a risk assessment for the company.

In any event, the EAT pointed out that the tribunal's job was not to question the veracity or otherwise of the occupational health doctor. Rather, it was to decide whether the company had acted reasonably in relying on Dr Farrand's report. The right question would have been "whether this employer knew that the advice was flawed, or ought reasonably to have known it, and that no reasonable employer would have been entitled to rely upon this report".

The issue was remitted to a new tribunal for a re-hearing.