Case update (2):  Unfair dismissal – Remedy of Re-Engagement

Summary: Can a Tribunal order re-engagement where the employer believes that trust and confidence has broken down?

No, not if the belief is rationally held, says the EAT in Kelly v PGA European Tour, available here.

Facts:  The employee, Mr Kelly, was employed by the Professional Golfers Association (PGA), the employer, in 1989 as Marketing Director of the European Tour.  By 2015 he was Group Marketing Director.

In 2015, the PGA’s new Chief Executive, decided within two months of his appointment to dismiss the employee over concerns about his performance and willingness to “buy in” to his ideas. They could not agree on exit terms and the employee was dismissed.

The employee brought a claim of unfair dismissal (but only after he had covertly recorded the meetings at which his dismissal had been discussed and effected).

Tribunal decision

The employer conceded that the dismissal was unfair as there had not been a fair procedure so the Tribunal considered the appropriate remedy.

Mr Kelly wanted the Tribunal to order either that he get his old job back (reinstatement) or, failing that, to be re-engaged in similar employment (re-engagement). The Tribunal declined to order reinstatement but did decide that it was appropriate to order re-engagement. The employer argued that re-engagement was impracticable because the Chief Executive lacked trust and confidence in the employee for reasons of capability and the discovery that he had covertly recorded meetings with him.

However, the Tribunal noted that the employee had 26 years’ successful service and had recently been offered a role as a consultant on a tournament in Morocco. The Tribunal ordered the employee be re-engaged in the role of Commercial Director, China, one that he had identified to be of interest. Although the employer had stated that a Mandarin speaker was required for this role, the Tribunal considered that the employee’s willingness to learn Mandarin and his proficiency in foreign languages, meant that it was practicable.

EAT decision

The employer appealed against the re-engagement order and the EAT allowed the appeal.  The EAT held that it is the employer’s view of trust and confidence which is key, and the Tribunal should only have asked whether the employer had a rational and genuine basis for believing that trust and confidence had been damaged.

The EAT also held that the Tribunal had substituted its own view on whether the ability to speak Mandarin was an essential requirement of the re-engagement and that the employee was capable of rapidly learning this language. Requiring the employer to engage someone in a role for which they did not meet one of the essential requirements overstepped the mark and failed to give weight to the employer’s commercial judgement.

The EAT remitted the case for further consideration by the Tribunal.

Implications:   The EAT in this case held that a breakdown of trust and confidence is relevant to remedy not just in misconduct but also capability cases. It also confirmed that it is the reasonableness of the employer’s requirements which the Tribunal should assess (in this case that speaking Mandarin was essential to the role) rather than substituting these considerations with its own decision.