Case update (2): Unfair dismissal – Personality clash S.O.S.R. dismissal

Summary:  Can a dismissal be fair in the absence of any procedure or right of appeal, when there is a personality clash between two senior members of staff resulting in an irreparable relationship?

Yes, says the EAT in Gallacher v Abellio Scotrail Limited available here.

Facts:  Mrs Gallacher, the employee, was a senior manager at Abellio ScotRail, the employer. Over the course of her employment, the relationship between herself and her line manager became strained as a result of various disputes relating predominantly to salary and recruitment issues.

A couple of meetings were held to discuss their relationship, but ultimately both parties felt that the relationship had broken down irreparably and the employee did not show any interest in repairing it. The employee openly made negative comments about her manager and admitted she did not behave towards anyone else in the same way.

When the employer began trading at a loss, changes needed to be made quickly. There were no signs the relationship could be repaired and no alternative roles for the employee. Therefore, after consulting with HR, the employee’s line manager decided to dismiss her during an annual appraisal meeting, citing an irretrievable breakdown of working relations. There was no procedure followed, particularly as the HR advice had been that, as the matter was not one of conduct or capability, there was no process which could help manage the situation. The employee was not offered the right of appeal and was paid in lieu of her notice entitlement.

The employee brought claims for unfair dismissal, disability, sex and age discrimination. The employer denied that it had knowledge of the disability relied upon by the employee, which were symptoms connected with the menopause and depression.

Tribunal decision

The Tribunal rejected the employee’s discrimination claims and found the dismissal to be within the band of reasonable responses available to the employer and to have been a fair dismissal since it came within the permissible dismissal category of ‘some other substantial reason’ (SOSR).  Here, the ‘substantial reason’ was the lack of trust and confidence between two employees at senior level.

The Tribunal acknowledged that the complete lack of dismissal procedure would, in most cases, result in the dismissal being regarded as unfair. However, in the particular circumstances of this case, the decision to dismiss was substantially and procedurally fair.

The Tribunal accepted the employer’s submission that an irretrievable breakdown in trust and confidence, particularly between two senior managers at a critical time for the business, did not naturally fit into any internal policy and would not serve any useful purpose.

The Tribunal found no evidence that the claimant was interested in retrieving her relationship with her line manager, and it considered any appeal would have been “going through the motions“.

The employee appealed to the EAT.

EAT decision

The EAT dismissed the claimant’s appeal, upholding the Tribunal’s decision. Though the EAT warned that any dismissal without procedure should be approached with a high level of caution, it confirmed that if a procedure is reasonably considered by the employer to be futile it can choose to dispense with it. There is no rule of law that the absence of any procedure necessarily renders a dismissal unfair – all the circumstances of the case need to be taken into account.

In particular, the EAT took into account the fact the claimant herself recognised the breakdown in her working relationship with her manager but had no interest in repairing it.

Implications: 

This is a rare example of where a dismissal with no procedure was still considered to fall within the range of reasonable responses available to an employer. In almost all cases involving a dismissal, as you will well know an employer is expected to follow at least a minimum procedure before making the decision to dismiss. It was significant here that the employee concerned was senior, showed no inclination to retrieve the situation, and that the business found itself in a particularly critical situation.

Whilst we would always advise extreme caution in dispensing with any dismissal procedure where an employee has unfair dismissal rights, this provides a useful reference point for employers who find themselves in situations whereby the relationship between two key employees has broken down past repair.

However, the case should not be viewed as a green light to dispense with a fair procedure before terminating employment! Had a fair process been followed in this case, it would have been harder for the claimant to argue her dismissal was unfair. This could well have saved the time and cost of defending expensive Tribunal proceedings.