Horkulak v Cantor Fitzgerald (Court of Appeal)
Large award for unfair dismissal
The significance of this decision is that the Court of Appeal has upheld the main reasoning of the High Court in awarding a very large sum for wrongful dismissal. The High Court decision attracted a lot of publicity but now the Court of Appeal confirms it to be correct. The main issue of the appeal was whether the judge was right to assess damages on the basis that the claimant remained in employment; that point is rather obscure.
Highlighted are the main points of the High Court decision, which have now been affirmed. A number of cases in recent years concerning foul and abusive language by the employer have rested on whether its use destroyed trust and confidence between employer and employee.
Abusive language in the workplace can give rise to claims if it is sufficiently serious to justify the employee resigning and claiming constructive dismissal. If that claim is for wrongful dismissal and the individual is well paid and has a long notice period, it can be an expensive mistake.
In Horkulak v Cantor Fitzgerald, a senior worker was subjected over a substantial period of time to abusive language from the chief executive. Although the use of such language was common in the workplace, the court found the relationship of trust and confidence between Horkulak and his employer had broken down because of the employer’s behaviour. Cantor Fitzgerald had argued there was a culture of robust communications and bad language and it came with the job, but the Court of Appeal rejected that argument and stated that “the frequent use of foul and abusive language did not sanitise its effect”.
Horkulak was successful in showing that he was constructively dismissed and was awarded damages of almost £1m plus costs and interest.
The use of foul language in the workplace is not necessarily deemed unacceptable, but its use can undermine the relationship of trust and confidence between employer and employee. The test of whether trust and confidence has broken down is an objective one. This means a court or tribunal will assess how an independent third party would view the situation, rather than how the employer and worker view it. Regular use of foul and abusive language in the workplace does not sanitise its effect.
What you should do
- When dealing with performance or conduct issues, use your disciplinary and poor-performance procedures without recourse to abusive or insulting language
- Train your managers to use appropriate management styles when handling performance and conduct issues. They must understand that their position of seniority does not give them a right to abuse others
- Make sure that your bullying and harassment policies state that abusive language to others will not be tolerated.