EAT 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.
Citations:
[2017] UKEAT 0142 – 17 – 2111
Links:
Jurisdiction:
England and Wales
Employment
Updated: 02 April 2022; Ref: scu.601921
