Boris Johnson may have delivered a resignation speech last Thursday and a Conservative leadership contest is well underway, but observers were quick to pick up on a lack of detail in when and how he would depart. If an organisation is faced with an employee who has lost competence or support, what are the legal risks and considerations? Georgina Calvert-Lee explains.
The downfall of Boris Johnson is a suitable moment for those in HR to pause and consider how they may best handle the departure of executives who no longer have the support or respect of their colleagues. While forcing an employee to resign on the threat of dismissal may be tempting, it may well expose the business to a legal claim for constructive dismissal.
Johnson’s recent departure may serve as a lesson for HR teams. Recent political events may appear distant from our working lives, but the underlying motives and considerations are not all that different.
No confidence votes taking place concerning executives’ pay packages are becoming increasingly common, often signalling a mismatch between the executives’ view of their just reward for the prior year’s performance and the shareholders’ view of the state of the market, the economy and forthcoming prospects.
There was a similar mismatch of assessments and expectations in Johnson’s case. Although he survived a no confidence vote a few weeks ago, last week’s unrest saw many in his management team throwing in the towel. They thought he should leave, and their resignations pressured him into doing so.
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Did he then receive the final direction from Sir Graham Brady, chair of the backbenchers’ 1922 committee that if he didn’t quit, the rules would be changed to force him to leave?
Threat of dismissal
Politics aside, organisations need to recognise that threats of dismissal that prompt a resignation may amount to unfair dismissal.
In the 1978 case Sheffield v Oxford Controls, the EAT highlighted the principle that an employee who resigns because they are told that if they don’t they will be fired is considered dismissed – even if the employee dutifully signs a resignation letter. But this is still a form of constructive dismissal.
The EAT went on to note that if the employee is, however, induced to resign because he is also offered separation terms that he finds satisfactory, then the resignation will be treated as genuine because the immediate cause will be these satisfactory terms, rather than the threat.
What’s key here is that if you wish your departing employee to offer their resignation but for it not to be considered dismissal, you must allow them the room to influence the terms of departure.
Of course, if you do not think your departing employee deserves good separation terms, then don’t offer them and don’t ask them to resign.
Alternative routes
Instead, instigate fair disciplinary or capability procedures. If they think they should remain in their post they will have a fair chance to establish that in the procedure.
Most employees – even those in the highest office – don’t want to work where they are no longer welcome.”
And if they realise that there is something to the charges or they are otherwise not capable of performing their role, then they probably will resign without you having to ask them.
So why does Johnson’s “dismissal” matter to HR? It is tempting to short circuit a difficult employment situation by inviting someone to resign on threat of being dismissed anyway. There is logic to a swift separation, and it may be better for both parties.
But if you do this, be aware that you could be setting your company up for an unfair dismissal claim – one that could be avoided if you make it clear that you are not necessarily going to dismiss the executive if they don’t resign.
You would be well advised to ensure that any conversation about a potential agreed exit is held on a “protected” or “without prejudice” basis.
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Then, so long as you treat your employee with respect, and remember there are at least two sides to every story, you should be fine. Most employees – even those in the highest office – don’t want to work where they are no longer welcome.
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