Case update (2): Unfair dismissal – the vanishing dismissal

Summary:   Can an employee claim unfair dismissal if they have successfully appealed against their dismissal under a contractual disciplinary procedure?

No, says the Court of Appeal in Patel v Folkestone Nursing Home Ltd available here.

Facts:  Mr Patel, the employee, was a Healthcare Assistant at Folkestone Nursing Home Ltd, the employer.  Mr Patel was dismissed for gross misconduct following charges of (1) sleeping on the job and (2) falsifying residents’ records. The second charge could result in a reference being submitted to the Disclosure and Barring Service (DBS).

Mr Patel submitted an internal appeal against the decision to dismiss which was successful. The external appeal officer considered the charges and found in Mr Patel’s favour on both when allowing the appeal. However, for some reason, the employer’s letter to Mr Patel informing him that the decision to dismiss him would be revoked, only explicitly referred to the first charge.

The employer’s disciplinary procedure, including the appeal procedure, was contractual.  However, the procedure did not set out what the consequences of a successful appeal would be. Mr Patel did not return to work and claimed unfair dismissal.

Mr Patel was unhappy that he was not informed of the precise finding on the second charge nor assured no DBS reference would be made. As such, he refused to return to work and brought Tribunal claims of wrongful and unfair dismissal.

The question before the Tribunal was, had Mr Patel been ‘dismissed’ given that his appeal against dismissal had been successful? The Tribunal considered that Mr Patel had a “live” dismissal, so could claim unfair dismissal.  The employer appealed.

The EAT disagreed with the Tribunal.  The EAT held that Mr Patel could not claim unfair dismissal, because he had not been dismissed. The EAT decided that Mr Patel had not been dismissed and that even if the letter was not sufficiently clear, an appeal decision does not even need to be communicated for the contract to be revived.

Mr Patel appealed to the Court of Appeal.

The Court of Appeal dismissed Mr Patel’s appeal.  It held that where there is a contractual right of appeal against a dismissal it was implicit that a successful appeal would require both employer and employee to treat the employment relationship as having remained in existence throughout.

The Court acknowledged that an employee may pursue an appeal for reasons other than reinstatement, such as, wishing to clear their name. However, even if the employee does not wish to continue in employment, the effect of a successful appeal is to treat the employee as if he was never dismissed.

However, the Court of Appeal did open up the possibility of an appeal on a different ground. The original letter of dismissal did not deal with serious allegations against Mr Patel. The Court of Appeal said that it was strongly arguable that this amounted to a breach of trust and confidence and it might possibly justify Mr Patel in treating himself as having been constructively dismissed. As such, the case is going back to the Tribunal to consider whether Mr Patel had been constructively dismissed due to the employer’s breach of the implied term of trust and confidence.

Implications: This is reassuring for employers, in that the effect of a successful appeal is that the dismissal simply vanishes. However, there are also some warnings for employers in this decision and we recommend employers:

• ensure that any decision as to the specific outcome of a contractual appeal is stated in clear terms, dealing with each of the matters which justified the original decision to dismiss. Leaving important matters not dealt with, as far as the employee is concerned, is capable of amounting to a breach of the implied term of trust and confidence.
• bear in mind that any decision which states that the contractual appeal is ‘successful’ will, as a general rule, be automatically treated as reinstatement with the effect that it will:
• revive the contract (and treat the employment relationship as having remained in existence throughout); and
• entitle the employee to be paid all back pay and to have the benefit of all other terms of his contract of employment through the relevant period and into the future.

Although this case dealt in particular with a contractual right of appeal, the position is most likely the same for non-contractual rights of appeal e.g. those set out in a non-contractual Staff Handbook.  The Court of Appeal said that the ordinary meaning of the relevant words of the right of appeal, read objectively, results in voiding the earlier dismissal. On the basis of the Court of Appeal’s reasoning, it seems that the same conclusion is likely to result in the case of a non-contractual right.  However, this isn’t definitive until the courts have considered the issue explicitly.