Employment Law Case Update: Breach of Implied Trust and Confidence

Failure to support a management team without proper consultation or justification could lead an employer to more problems than a disgruntled manager.  This is demonstrated in the case up for review today by our Employment Law team of Ms Gillian Smith v Age Concern Exmouth & District; a case that shows employers that a lack of support could result in an implied breach of trust and confidence and ultimately a costly tribunal claim.

Ms Gillian Smith began in her role as CEO of Age Concern in April 2017. As CEO, Ms Smith was responsible for the day to day operation of the charity and managing its staff.  It was policy that the CEO be made aware of any concerns brought by members of staff to the Board of Trustees, such that the CEO “be given authority on which to act”.

In April 2018, Ms Smith witnessed two staff members engaging in behaviour she regarded as bullying.  She warned the staff members that if the behaviour continued, they would be subject to disciplinary action.  One of the employees became abusive and told Ms Smith, “Shove your job up your arse”.  Ms Smith took this to be the employee’s resignation and reported it to the board.  The employee subsequently made a complaint about Ms Smith to the board. The board met with the employee without informing Ms Smith about the complaint or the meeting. Though there was no substance to the employee’s complaint, the experience left Ms Smith feeling unsupported. This feeling was compounded when the incident was brought up again months later at her annual appraisal.

The second incident occurred in February 2019.  An employee complained to the board that Ms Smith was only granting Statutory Sick Pay rather than full pay for periods of absence. Ms Smith warned the board that if they reversed her decision she would be left “undermined and discredited”.  The board met with the employee and made the decision to grant full pay as a one-off exception, without discussing the decision with Ms Smith.

The third incident began in July 2019, when an employee became very hostile towards Ms Smith. Ms Smith took advice from an HR consultant who advised that the employee could be dismissed. Ms Smith explained her position to the board who agreed this was a managerial decision and promised to support her. After the HR consultant took legal advice from a solicitor, it was decided that the employee should be suspended with pay pending a disciplinary investigation. The same day the suspension took effect, the board held a meeting without Ms Smith and decided to reverse the suspension, a decision which left Ms Smith feeling “shocked and undermined”. She felt the board had not given any thought to how her “authority and reputation would be undermined by this decision” and that she could not continue to work for the charity under the present conditions.

Ms Smith sent an email to the board on 6 August requesting an urgent meeting to discuss her future at Age Concern.  Neither this email, nor her subsequent email on August 7 informing the board she had been signed off on sick leave, received a response.

Ms Smith resigned on 12 August 2019 and claimed constructive unfair dismissal.  She alleged that the Board of Trustees undermined her position and breached the implied term of trust and confidence.

To establish a breach of the implied term of trust and confidence, the Employment Tribunal (ET) must be satisfied that, viewed objectively, the conduct of the employer was “likely to destroy or seriously damage the degree of trust and confidence the employee is reasonably entitled to have in his employer”.

The ET found that the conduct of the board satisfied this test.  In each incident, the board took a course of action that was contrary to Ms Smith’s position and, as a result “undermined her managerial position as CEO”.  The combination of these incidents amounted to a cumulative breach of the implied trust and confidence.  Further, the ET found that the board’s failure to respond to Ms Smith’s urgent request for a meeting to discuss her future also amounted to a fundamental breach of her contract of employment.  Ms Smith resigned in response to this breach and therefore, the ET concluded, she had been constructively dismissed.

Ms Smith was awarded £26,500 for loss of earnings, loss of future earnings, and loss of statutory rights.

This case reminds employers that they should not take their relationships with members of their management team for granted.  Managers should be shown respect in how they make decisions in their areas of responsibility, and any concerns with their performance should be addressed honestly and fairly.  Failing to support a member of management or listen to their concerns can lead to a tense work environment and possibly, as in this case, a tribunal claim.

If you have any questions regarding this article, you can call our Employment team today on 023 8071 7717 or email employment@warnergoodman.co.uk.

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ENDS

This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice.  All content was correct at the time of publishing and we cannot be held responsible for any changes that may invalidate this article.