The case of the vanishing dismissal

Employment Tribunal

In an ideal world, your disciplinary hearing managers can be safely relied upon to always deliver faultlessly fair decisions when dismissing employees, after an impeccable dismissal process.

However, the world is not ideal and managers are just as capable of making honest mistakes as anyone else.

So, what options are left for an employer if its appeal officer concludes that a dismissing manager made the wrong decision? How can that employer hope to ever defend itself in a claim of unfair dismissal if the appeal against dismissal is upheld? Surely that’s as good as an admission of liability?

Well, the Court of Appeal in the case reported below has recently reminded us of the answer: uphold the appeal, ensuring you properly address all relevant complaints and the dismissal will simply vanish. Just like magic the employee’s claim will also disappear!

Patel v Folkestone Nursing Home Ltd

Facts

The Respondent (FNH Ltd) employed the claimant (Mr P) as a healthcare assistant at a nursing home. In April 2014 he was dismissed for gross misconduct having been charged with sleeping on duty and falsifying residents’ records.

Mr P appealed the decision to dismiss and his appeal was upheld; the appeal chair finding that as he had been on an unpaid break when found asleep he had not breached company rules. The outcome letter stated that the decision to dismiss him was revoked and that he was entitled to return to work. It did not however deal with the allegation that he had falsified records – an omission which left Mr P feeling aggrieved. He refused to return to work and, on 17 July, presented claims of wrongful and unfair dismissal to an employment tribunal.

The decision

The Tribunal at first instance decided that Mr P had been dismissed (despite his successful appeal), one reason being that the disciplinary letter made no mention of the second allegation and therefore Mr P’s position was left unclear.

FNH Ltd appealed to the EAT arguing that the effect of the appeal was that Mr P had not been dismissed and as such he could not pursue claims for unfair dismissal or wrongful dismissal. The EAT decided in favour of FNH Ltd, stating that that where an employer provides the right of appeal and the appeal is successful, this will automatically revive the contract of employment unless there is an express provision to the contrary.

The Court of Appeal have now dismissed the appeal against the EAT’s decision, again finding in favour of FNH Ltd. The CA found that it is clearly implicit in a contractual term conferring a right to appeal against dismissal that where an appeal is lodged and is successful, the effect is that both employer and employee are bound to treat the employment relationship as having remained in existence throughout.

Interestingly the CA went further and commented on the unsatisfactory manner in which FNH Ltd had dealt with Mr P’s appeal, stating that it was arguable the business was in breach of the duty of trust and confidence in failing to resolve the more serious of the allegations against P and for failing to withdraw a complaint it had made to the DBS regarding Mr P.

Both parties were then given the opportunity to make written submissions on whether Mr P should be allowed to continue his claim on the basis that he had been constructively unfairly dismissed (as an alternative to unfair dismissal given that the business had not dismissed him).

Implications of decision

This Judgment confirms the generally accepted position that where an internal appeal against a decision to dismiss is upheld, the dismissal is regarded as never having occurred. It also stresses the importance of treating employees fairly throughout any appeal process.

If you are responsible for overseeing the appeal process, you will need to ensure that:-

1) The appeal process in conducted in accordance with your internal disciplinary policy which should, as a minimum, set down the basic principles of fairness set out in the ACAS Code on Disciplinary and Grievance Procedures;

2) Every appeal point is addressed and comprehensively responded to in the appeal outcome letter;

3) You avoid communicating an employee’s departure from the business where an appeal has been submitted, in case the decision to dismiss is subsequently overturned;

4) Where a decision is made to overturn a decision to dismiss, you will need to ensure that:

a) the individual is paid for the intervening period between the dismissal and the decision to uphold the appeal;
b) this intervening period is taking into account for the purposes of holiday accrual;
c) the individual understands their continuity of employment is preserved i.e. they do not join the business again as ‘a new starter’;
d) adequate steps are taken to integrate the individual back into the business
e) prompt action is taken where an employee fails to return to work, to address any outstanding areas of complaint and mitigate the risks of a constructive unfair dismissal claim