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Employment Case Law Update June 2020

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A number of key employment law cases of significance for employers have recently been decided.

 

Unfair dismissal in redundancy

Gwynedd Council v Barratt

A London Employment Tribunal has ruled in favour of an NHS trust employer in the case of Camara v East London NHS Foundation Trust.

A claim for unfair dismissal was brought by two teachers who had been made redundant by Gwynedd Council following a reorganisation, which saw the school they had worked in closed, and a new school opened on the same site.

The tribunal initially found in favour of the claimants, holding that their employer had failed to consult them over the reorganisation proposals; failed to offer a right of appeal against the decision to dismiss; and because of the manner in which they had to “apply for their own jobs”.

The local authority appealed the decision, on the grounds that the tribunal had applied the redundancy process guidelines too rigidly.

The Employment Appeal Tribunal upheld the finding of unfair dismissal, while giving useful guidance on approaching redundancy situations.

Where employees are represented by a Trade Union, the employer should seek to agree with the union proposed redundancy selection criteria to be applied to at-risk employees. The local authority did not take this approach. The Tribunal found that the claimants were effectively being asked to apply for the same or substantially the same job, rather than new posts.

The EAT did, however, endorse the use of the competitive interview approach in cases where the exercise is “forward-looking” in appointing to new posts rather than selecting from a pool for redundancy.

This case addresses the importance of consultation even where alternative roles have been applied for by those at risk of redundancy.

 

Knowledge or conduct of someone who is not the decision-maker can be relevant in assessing whether the decision to dismiss was reasonable

Mr J Uddin v Ealing LBC

Mr Uddin was dismissed by the London Borough of Ealing for gross misconduct for behaving inappropriately towards an intern during after-work drinks in a pub. The intern alleged that claimant had dragged her to the toilet and assaulted her.

After the internal investigation but before the disciplinary hearing, the investigating officer learned that the intern had withdrawn her police complaint, but he failed to inform the individual leading the disciplinary processor this fact.

Following the hearing, the claimant was dismissed, with the dismissing officer relying in part on the fact that a complaint had been made to the police when preferring the complainant’s account of events.

The claimant brought various complaints in the Employment Tribunal (‘ET’) including unfair dismissal.

The Employment Tribunal concluded that the dismissal was fair as there was sufficient evidence before the dismissing officer to decide the claimant was guilty of misconduct, even though the complaint to the police had been withdrawn.

The claimant appealed, arguing that the Supreme Court’s decision in Royal Mail Group Ltd v Jhuti meant the investigating officer’s knowledge that the police complaint had been withdrawn should have been communicated to the officer deciding on the claimant’s dismissal.

The Employment Appeal Tribunal held the principles established by the Supreme Court in Jhuti were broad and applicable here. As a result, the investigating officer’s failure to share a material fact with the dismissing manager was relevant to the consideration of whether the dismissal was fair.

The dismissing officer had made a decision on behalf of her employer without the benefit of clearly relevant knowledge which the employer had in its possession.

The EAT therefore substituted a finding of unfair dismissal.

This decision highlights the significance of the reasons behind a dismissal and what information is disclosed to the decision-maker, as well as the importance of a fair investigation to avoiding unfair dismissal claims.

 

Constructive dismissal & last straw doctrine

Williams v Governing body of Alderman

The Employment Appeal Tribunal has ruled that a constructive dismissal claim can succeed even if the ‘last straw’ in a series of acts was innocuous.

The claimant, Mr Williams, was a primary school teacher. He had resigned from his job following a series of events. This included being suspended for a child protection matter, and disciplinary proceedings being brought against him for an alleged breach of the school’s data protection policy when downloading documents to share with his trade union representative, who was also a colleague at the school.

On resigning, he said the last straw had been when he learned that his trade union rep had been instructed not to contact him.

The tribunal at first instance held that the school was reasonable in instructing the trade union rep not to make contact as part of a fair investigation, meaning the act could not be the last straw entitling him to treat the contract as terminated.

The EAT disagreed. The employer’s earlier conduct in itself amounted to a fundamental breach of contract and could be relied upon, provided the employee had not affirmed the earlier breach and resigned at least partly in response to that.

The decision is a reminder to employers that even reasonable and arguably harmless acts on their part may revive an earlier fundamental breach, entitling the employee in question to resign and claim constructive dismissal, provided the earlier fundamental breach contributed to the decision to resign and had not been affirmed.

 

Breach of confidentiality clause did not end the agreement

Duchy Farm Kennels Limited v Graham William Steels

The High Court has held that a confidentiality clause within a COT3 was not a condition of the agreement, but rather a ‘generic clause’. The employer was not therefore able to terminate the agreement following a breach of this clause.

A settlement was negotiated and agreed through Acas under a COT3. Under the COT3, Duchy agreed to pay Mr Steels, a former employee, the sum of £15,500 in 47 weekly instalments of £330 in full and final settlement. It also included a confidentiality clause, requiring Mr Steels not to disclose the fact and terms of the agreement, as well as a warranty that he had not already done so.

Duchy discovered nine weeks later that Mr Steels had disclosed the fact and amount of the settlement payment to a former colleague, and stopped making the payments.

Mr Steels issued proceedings to recover the unpaid sums.

The County Court ruled that the confidentiality clause was not a condition of the contract, which would give the other party the right to end the contract if breached.

Instead, it was an intermediate or innominate term and Duchy remained obliged to make the payments. Duchy appealed.

The High Court agreed that the clause was not a condition because it was a generic clause, included almost “as a matter of course”. The fact it was there did not indicate that confidentiality was of key importance. The Court said that it was possible for a confidentiality clause to amount to a condition, and suggested that it may be helpful to (i) expressly stipulate that the clause is a condition, and (ii) make specific provision in the terms for what should happen in the event of a breach (i.e. repay all or a proportion of the settlement sum).

In light of this decision, employers are advised to review standard template wording use of confidentiality clauses.

 

Need assistance?

If you have a question about employment case law and the impact of tribunal and court decisions on your business, DavidsonMorris’ experienced employment lawyers can help. Working closely with our specialist human resource colleagues, we offer a holistic advisory and support service for employers encompassing both the legal and people risks of workforce management. Speak to our experts today for advice.

Last updated: 29 June 2020

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