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Employment Law Case Update: Constructive Unfair Dismissal and Appeals

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Every employer should have a process when managing dismissals with the right to appeal an integral part of that process.  However, can that appeal process hamper any potential constructive unfair dismissal claim from an employee?  Our Employment Law team discuss this here, reviewing the case of The Phoenix Academy Trust v Kilroy and whether an employee can claim constructive unfair dismissal after launching a successful internal appeal.  

Mr Kilroy was Acting Principle at a secondary school run by The Phoenix Academy Trust. Through May and June 2018 he was the subject of a disciplinary investigation and was invited to resign on five separate occasions. He formed the opinion that the Trust was determined to get rid of him and consequently submitted a letter of resignation in which he alleged constructive unfair dismissal for breach of the implied term of trust and confidence.

However, on the same day he sent his letter of resignation, the Chairman of Governors telephoned Mr Kilroy and informed him that he was being dismissed for gross negligence. Mr Kilroy subsequently appealed his dismissal but expressed on several occasions that “irrespective of the result” he would not return to work for the Trust.

In mid-October, Mr Kilroy’s internal appeal was upheld. He was reinstated with effect from 23 July and issued a final written warning. Mr Kilroy submitted a second letter of resignation on 22 October and pursued his claim of constructive unfair dismissal. The Trust argued that by exercising his right to appeal, Mr Kilroy unequivocally affirmed his contract of employment and so could not claim constructive dismissal.

The Employment Tribunal (ET) found that the conduct of the Trust during the disciplinary investigation amounted to a breach of the implied term of trust and confidence. It then found that Mr Kilroy had not affirmed his contract of employment by invoking the internal appeal procedure because he had made it clear he had no intention of returning to work, regardless of the internal appeal’s outcome. The Trust appealed the ET’s decision to the Employment Appeal Tribunal (EAT).

The EAT allowed the appeal. It applied the case of Folkestone Nursing Home v Patel and found Mr Kilroy’s invocation of the appeal procedure to be “an unequivocal election to treat the contract as continuing”. He had affirmed his contract of employment despite his intention not to return to work. The ET’s ruling that there had been an unfair constructive dismissal was therefore set aside.

However, the EAT also considered whether the conduct of the Trust after the internal appeal process had been invoked could itself amount to a breach of trust and confidence. It referred to the case of Kaur v Leeds Teaching Hospitals NHS Trust which determined that “an employee who is the victim of a continuing cumulative breach of the implied term of trust and confidence is entitled to rely on the totality of the employer’s acts, notwithstanding a prior affirmation of the contract, provided the later act or acts form part of the series”. Kaur outlined five questions for a court to answer when determining whether an employee can rely on previous breaches by the employer:

(1) What was the most recent act or omission on the part of the employer which the employee says caused, or triggered, his or her resignation?
(2) Has the employee affirmed the contract since that act?
(3) If not, was that act or omission by itself a repudiatory breach of contract?
(4) If not, was it nevertheless a part of a course of conduct comprising several acts and omissions which, viewed cumulatively, amounted to a (repudiatory) breach of trust and confidence?
(5) Did the employee resign in response to that breach?

The EAT concluded that the question of constructive dismissal should be remitted back to the ET to consider with the full benefit of these questions. It therefore remains to be determined whether the conduct of the Trust during and after the internal appeal process was part of a series of conduct amounting to a breach of implied trust and confidence.

This case establishes that when invoking an internal appeal process, the employee will be bound by the appeal decision, even if they have no intention of returning to work. If an employee’s internal appeal against dismissal is upheld, the dismissal “vanishes” and is treated in law as if it never happened. The employee then cannot claim unfair dismissal because there is no dismissal on which to base a claim.

However, the employee may still have a claim for constructive dismissal if the employer’s conduct throughout the appeal process forms part of a series of behaviour stretching back before the internal appeal procedure was invoked. In that case, an employee will be able to rely on the totality of the employer’s behaviour to demonstrate that the employer breached the implied term of trust and confidence. Employers should therefore take care to ensure the fairness and propriety of their internal appeals procedure.

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.

This was previously part of our weekly Employment Law Newsletter. If you would like to subscribe, please email us at events@warnergoodman.co.uk or just fill in our subscription form.

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.