If we have to deliver an unpleasant message to someone, it can be tempting to water it down a bit to make it a bit more palatable and to soften the blow for the recipient. For example, if you are dismissing an employee for poor performance who has only been with you for a few months, some might think it kinder to tell them that they are being dismissed because there is a ‘business reorganisation’. There’s no harm in that, is there? Yes, according to the Employment Appeal Tribunal (EAT).
This was exactly the scenario which the EAT considered in the case of Rawlinson v Brightside Group Limited (2017). Brightside Group are a firm of insurance brokers, and Mr Rawlinson was employed as its in-house counsel. Mr Rawlinson had only been in the role for a few months when he was given notice that his employment was being terminated and that he would be required to work his three months’ contractual notice. He was told that the reason for his dismissal was a reorganisation and an intention to outsource legal services. In fact, the reason for his dismissal was that the company had concerns about his performance, although these had never been raised with him.
Mr Rawlinson did not have sufficient service to claim unfair dismissal, but he resigned with immediate effect and brought a claim in the Employment Tribunal for his notice pay. He argued that by giving him a false reason for his dismissal, the company had breached the implied term of trust and confidence and therefore he was entitled to leave without working his notice.
At first instance, the Employment Tribunal disagreed. They held that the company’s failure to talk to Mr Rawlinson about their performance concerns did not amount to a fundamental breach of contract, and that the real thrust of Mr Rawlinson’s claim was the manner of his dismissal. It has long been established that an employee cannot recover damages for breach of contract in respect of the manner of their dismissal.
Mr Rawlinson appealed to the EAT. The EAT agreed with Mr Rawlinson and allowed the appeal. They held that in nearly all cases the implied term of trust and confidence will put an obligation on both employer and employee not to mislead the other. They went on to say that their judgment did not mean that an employer was being placed under any new obligation to give an employee a reason for their dismissal (for most purposes there is no obligation to provide a reason for dismissal to an employee with less than two years’ service), but if an employer does decide to give a reason, the implied term requires that it be given in good faith.
This is an interesting decision, and one which employers would do well to remember. As I said at the outset, it is often felt to be kinder to give a poor performing employee a less critical reason for dismissal, but it could come back to bite you. In this case the loss would be the three months’ notice pay, but in other scenarios it could be more.
If you would like to talk through a situation you are dealing with, or if you need advice on any aspect of employment law, please contact any member of the Pure Employment Law team (01243 836840 or [email protected]).