Case update (1): Unfair dismissal – The ‘Vanishing dismissal’

Summary:  Where a dismissed employee brings an internal appeal, which results in their re-instatement, should they be treated as if the employment relationship had remained in existence throughout the appeal process?

Yes, says the EAT in Phoenix Academy Trust v Kilroy, available here, even if the employee made it clear when appealing that they have no intention of returning to their job whatever the outcome of the appeal.  This is a confirmation by the EAT of well established law.

Facts:  The employee, Mr Kilroy, was summarily dismissed by Phoenix Academy Trust, the employer, just before it received his resignation letter alleging constructive dismissal.  Mr Kilroy appealed against the decision, but his solicitors also wrote to the employer stating that, whatever the outcome, he wouldn’t be returning to work.  After that letter, but before the internal appeal was heard, the employee submitted a Tribunal claim for unfair dismissal.

When the internal appeal was eventually held, the employer reinstated him subject to a final written warning, requiring his return to work. The employee refused, instead continuing with his constructive unfair dismissal claim.

Tribunal decision

The Tribunal held that the employee had not affirmed his contract by invoking the appeal and that he had been unfairly (constructively) dismissed. This was, in particular, because the employee had made it clear to his employer on a number of occasions that he did not intend to return to his employment irrespective of the outcome of his appeal.

The employer appealed.

EAT decision

The EAT upheld the employer’s appeal and found that by invoking the appeal process, the employee treated the contractual relationship as continuing to exist.

The EAT also confirmed that where an employee’s internal appeal overturns their dismissal, then in law it will be as if no dismissal had ever occurred: even if the employee made it explicitly clear when submitting the appeal that they have no intention of returning to their job regardless of the outcome.

However, if breaches of the implied term of trust and confidence continue through the employer’s conduct of the appeal process, then the employee may be able to rely on the totality of the employer’s acts forming part of a series amounting to a fundamental breach of trust and confidence.

In light of the above, the case was sent back to the Tribunal for consideration of the employee’s complaints about the employer’s conduct during the internal appeal procedure.

Implications:  The essence of the decision (namely that a successful appeal cancels a  dismissal) was already well established in law but it is useful to have the EAT re-visit it for this review, especially when it involves the additional complicating factor of a constructive dismissal claim, where the Claimant actually wanted to argue the opposite.   The EAT confirmed that when an employee appeals against their dismissal, it is implicit that they are asking their employer to find that the dismissal decision was wrong and to return them to their pre-dismissal position.  The legal effect of a successful appeal against dismissal is that the earlier dismissal simply vanishes. The employer must treat the previous dismissal as having no effect and the employee is bound in the same way.  Accordingly, an unfair dismissal claim cannot succeed since there will not have been a dismissal. This will be the case regardless of whether the dismissal stood at the time that a claim was lodged at the Tribunal.

However, an employer does not have a clean slate when an employee has affirmed the employment contract by invoking an internal appeal. The employer remains at risk that a further act (or omission) by them may enable the employee to resign and claim constructive dismissal based on a cumulative repudiatory breach of trust and confidence.