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You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Rawlinson v Brightside Group Ltd [2017] UKEAT 0142_17_2111 (21 November 2017) URL: https://www.bailii.org/uk/cases/UKEAT/2017/0142_17_2111.html Cite as: [2018] ICR 621, [2018] IRLR 180, [2017] UKEAT 0142_17_2111, [2018] WLR(D) 4, [2017] UKEAT 142_17_2111 |
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At the Tribunal | |
On 12 October 2017 | |
Before
HER HONOUR JUDGE EADY QC
(SITTING ALONE)
APPELLANT | |
RESPONDENT |
Transcript of Proceedings
JUDGMENT
Transcript of Proceedings
For the Appellant | MR LARRY RAWLINSON (The Appellant in Person) |
For the Respondent | MR STEPHEN WYETH (of Counsel) Instructed by: Shoosmiths LLP Russell House 1550 Parkway Solent Business Park Whiteley Fareham PO15 7AG |
SUMMARY
CONTRACT OF EMPLOYMENT - Notice and pay in lieu
Notice and pay in lieu - breach of the implied term of trust and confidence - application of the Johnson exclusion zone
The Respondent had determined to dismiss the Claimant due to concerns regarding his performance. To "soften the blow" for the Claimant, who the Respondent wanted to work through his three month notice period to ensure a smooth handover of work, the Respondent did not tell him the real reason for its decision but told him there was to be a re-organisation of his work, which would be carried out by an external service provider. The Claimant thought this was a service provision change under the Transfer of Undertakings (Protection of Employment) Regulations 2006 ("TUPE") and that the Respondent had acted in breach of its information and consultation obligations. He duly resigned, claiming (relevantly) he had been constructively dismissed. In rejecting the Claimant's claim for damages for his notice period, the ET found the Respondent had not breached the implied obligation not to act in such a way as would be likely to destroy or seriously damage the relationship of trust and confidence ("the implied term"); it further considered that the Claimant's complaint really related to the manner of his dismissal. The Claimant appealed.
Held: allowing the appeal
In considering whether there had been a breach of the implied term, the ET had erred in approaching this by only considering the absence of a duty to tell an employee of the reason for dismissal and/or to dismiss in good faith in general terms. It had failed to consider the position where, as here, the Respondent had chosen to give a reason for the dismissal to the Claimant. That had - pursuant to the implied term - given rise to an obligation not to mislead the Claimant. Moreover, it was incorrect to characterise the Claimant's complaint as relating to the manner of his dismissal. Although an employee could not claim common law damages allegedly suffered as a result of the manner of a dismissal (see Johnson v Unisys Ltd [2001] IRLR 279 HL), this was a case where the complaint was in respect of financial loss suffered as a result of the Respondent's breach of the implied term that preceded and stood apart from the dismissal; indeed, it arose at a time when the employment relationship was intended to continue (Eastwood and Anor v Magnox Electric plc, McCabe v Cornwall County Council [2004] IRLR 733 HL applied).
In the circumstances, the ET's dismissal of the Claimant's notice pay complaint would be set aside and a decision substituted that this claim was to be upheld. If the parties were unable to agree remedy, that question would need to be remitted to the ET.
HER HONOUR JUDGE EADY QC
Introduction
The Background
"23. … Although Mr Wallin, Mr Johnston and Mrs Banks [the Respondent's HR People Officer] were clear that the reason for terminating his contract was performance Mr Wallin in discussion with Mr Johnston, directed that to soften the blow, the claimant would be told that the reason for his dismissal was a review of legal services and not solely his performance. As an industrial jury we are fully aware that in many similar situations employers give employees an incorrect reason for terminating their employment to make the news more palatable."
The Claims before the ET and the ET's Conclusions and Reasoning
"38. … There was no obligation on the respondent to give him a reason for the termination of employment. It provided him with the contractual notice to which he was entitled namely three months. It was not required by law to give him feedback that existed and it was not required to forewarn him of its intention to dismiss him."
"39. … Had a period of reflection taken place the claimant might have understood, in due course, that there was no service provision change contemplated which amounted to a TUPE transfer. … Unfortunately, it was the explanation given to him by Mr Johnston that sowed the seeds for his misunderstanding at the time. It pointed him towards the direction that TUPE might arise."
"40. His complaint is, essentially, in relation to the manner of dismissal. Although the claimant now seeks to rely on an earlier alleged breach of the implied term of mutual trust and confidence, namely, the meeting of 14 April and what he was told and the failure to disclose to him feedback received, we find that this was not the reason for his resignation. Neither were any of the earlier matters … contributory reasons for his resignation."
"41. … In this particular set of circumstances we conclude that although the claimant genuinely, and with some cause, considered that he was unfairly treated, the respondent had no legal obligation to provide the information to him. Well before the 14 April it had decided that it was going to terminate his employment for performance reasons. Its only obligation was to give him his contractual notice which it provided in due course. We find that nothing in the way that the respondent conducted itself can amount to a breach of the implied term of mutual trust and confidence. …"
The Appeal
"13. … This, the Employment Tribunal seems to have thought, was perfectly acceptable, but their decision at paragraph 41 of the Reasons … seems to me to confuse two things: the obligation to give information and the obligation - whether one describes it as arising from an implied duty of good faith or from the implied term as to mutual trust and confidence or whether these are the same thing - not to mislead or misinform the employee."
Submissions
The Claimant's Case
The Respondent's Case
The Relevant Legal Principles and Approach
"79. … This is an application of the general principle that a party who refuses to perform a contract, giving a wrong or inadequate reason, may subsequently justify his refusal if there were facts in existence at the time of the refusal which would have provided a good reason for it. … Turning to the situation with which I am concerned, the converse of that in Boston Deep Sea Fishing, it follows that an employee may justify his refusal to perform his contract of employment by any grounds which existed at the time of his leaving. So, if he simply walks out without apparent justification, but later discovers that his employer was fraudulently deducting from his pay on account of tax more money than he should, his employer would fail in any action brought against him, whether for damages or for an injunction to restrain him on the basis that the employment was continuing. Likewise, taking some of the facts in Malik, if the employees had left to work for another bank before they were free to do so, and BCCI had sought to restrain them from doing so, it would have defeated BCCI's claim for the employees to show that the bank was run in a dishonest and corrupt manner even though the employees did not know that when they left."
"27. The boundary line
Identifying the boundary of the 'Johnson exclusion area' … is comparatively straightforward. The statutory code provides remedies for infringement of the statutory right not to be dismissed unfairly. An employee's remedy for unfair dismissal, whether actual or constructive, is the remedy provided by statute. If before his dismissal, whether actual or constructive, an employee has acquired a cause of action at law, for breach of contract or otherwise, that cause of action remains unimpaired by his subsequent unfair dismissal and the statutory rights flowing therefrom. By definition, in law such a cause of action exists independently of the dismissal.
28. In the ordinary course, suspension apart, an employer's failure to act fairly in the steps leading to dismissal does not of itself cause the employee financial loss. The loss arises when the employee is dismissed and it arises by reason of his dismissal. Then the resultant claim for loss falls squarely within the Johnson exclusion area.
29. Exceptionally this is not so. Exceptionally, financial loss may flow directly from the employer's failure to act fairly when taking steps leading to dismissal. Financial loss flowing from suspension is an instance. Another instance is cases such as those before the House, when an employee suffers financial loss from psychiatric or other illness caused by his pre-dismissal unfair treatment. In such cases the employee has a common law cause of action which precedes, and is independent of, his subsequent dismissal. …
…
31. … the existence of this boundary line means that in some cases a continuing course of conduct, typically a disciplinary process followed by a dismissal, may have to be chopped artificially into separate pieces. In cases of constructive dismissal a distinction will have to be drawn between loss flowing from antecedent breaches of the trust and confidence term and loss flowing from the employee's acceptance of these breaches as a repudiation of the contract. The loss flowing from the impugned conduct taking place before actual or constructive dismissal lies outside the Johnson exclusion area, the loss flowing from the dismissal itself is within that area. …"
Discussion and Conclusions