If a fairy dies every time an employee is given a fake reason for their dismissal, then there can’t be many fairies left out there. Well, not in my experience of over 20 years advising on employment law issues.
Hand on heart, how many of you have told a poorly-performing employee that their job is in fact ‘redundant’? Or the ‘pain in the bum’ employee that they have failed their probationary period because they just don’t fit in? False reasons are given for dismissal all the time. Usually it is either to save someone’s feelings or to mask the fact that the line manager has just failed to manage the employee’s performance or conduct carefully and has decided ‘enough is enough’. In some cases, it is to hide blatantly discriminatory reasons or to get rid of a whistle-blower.
In lots of cases, employers get away with giving fake reasons for a dismissal. The employee might know deep down that they are not performing, and are therefore willing to go along with the story that they are redundant: it certainly looks better on the CV. Other employees know that the reason they have been given is false but possibly have no realistic legal claim – particularly those with less than 2 years’ employment where there is no obvious discriminatory or whistleblowing angle.
Occasionally employers get caught out, and Rawlinson v Brightside Group plc is one of those examples. Mr Rawlinson had been brought in as an in-house lawyer. Very quickly, the MD decided Mr R wasn’t up to scratch and determined that he should go. However, the MD decided he would like Mr R to do a proper handover and therefore told him that he was being dismissed but that he was required to work his notice. In order to sweeten the pill, Mr R was told that the company had decided to outsource their legal service, rather than raise any concerns about Mr R’s performance. Mr R smelt a rat and made his case that, if there was to be an outsourcing, then this would be covered by TUPE and he should therefore be transferring rather than being dismissed. BG were caught out, as they had made no plans to outsource their work. Mr R resigned with immediate effect and brought a claim for wrongful dismissal (i.e. his full notice pay – a breach of contract claim).
The Employment Tribunal rejected his claim, but this was overturned by the Employment Appeal Tribunal. They found that the employer had acted in breach of the implied term of trust and confidence. They reasoned that, by deciding to give him a reason for the termination of his employment, the employer had assumed an obligation not to mislead him, an obligation that it then breached. Mr R was entitled to have resigned in those circumstances and claim pay for his full notice period. This was only 3 months’ money – so would not break the bank, but for a higher paid employee and a longer notice period it could have more impact.
Of course, Mr R did not have sufficient service to bring an unfair dismissal claim, which is why he was only able to claim for wrongful dismissal. But he would undoubtedly have won an unfair dismissal claim too if he had been able to bring one: based on being given a false reason for dismissal.
George Washington said ‘It is better to offer no excuse than a bad one.” In practice, it is going to be very hard for an employer to not give a reason to an employee when they dismiss an employee and there is certainly still room for the odd ‘white lie’ that I fully appreciate can serve to soften the blow.
I believe there are two messages worth taking from this case. First, it’s yet another reminder to encourage your line managers to have more honest conversations with their staff, and to follow procedures, so that problems are tackled earlier and more honestly – especially poor performance – meaning that a ‘manufactured’ dismissal reason is less often required. Second, if you are going to give a false reason for a dismissal you need to at least ensure that you pick a decent excuse that you might be able to argue the case for, if it comes under closer scrutiny.
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