Supreme Court’s unfair dismissal ruling in Royal Mail case gives pause for thought

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This recent case should sound an alert for companies looking to dismiss staff for spurious reasons, especially in the context of whistleblowing, writes Ian Jones.

In a case which proceeded through all four tiers of our civil justice system, the Supreme Court has considered whether, in a claim for automatic unfair dismissal, a manager’s disguised reason for dismissal could be considered by the employment tribunal rather than the reason of the appointed decision-maker, who was unaware of the background.

In determining this, the court concluded that, given the particular facts, the employer could be held liable for automatic unfair dismissal following the employee’s previous protected disclosures (whistleblowing), despite the fact that the dismissing manager was unaware of those disclosures.

The case is significant because there have been some conflicting comments in previous Court of Appeal decisions about whether it is only the facts known to the decision-maker that are relevant.

During her trial period, Ms Jhuti made protected disclosures to her line manager (Mr Widmer) alleging that a colleague had breached the company’s rules and regulatory requirements. Mr Widmer suggested that she had misunderstood the position and should withdraw her allegations, which she did.

Mr Widmer then went on to introduce an unreasonable performance review process and to “pretend”, the court decided, that Ms Jhuti’s performance was inadequate. The process resulted in her being bullied and created a false picture of her performance.

Subsequently, the company appointed another manager, Ms Vickers, to decide whether Ms Jhuti should be dismissed. The latter, who had in the meantime been signed off work for work-related stress, anxiety and depression, was unable to present her case to Ms Vickers in meetings or otherwise. Having no reason to doubt the truthfulness of the material provided by Mr Widmer indicating Ms Jhuti’s inadequate performance, Ms Vickers decided that she should be dismissed for that reason.

Ms Jhuti then presented an employment tribunal claim arguing that she had been automatically unfairly dismissed and subjected to other detriments as a result of her protected disclosure. The tribunal found in favour of Ms Jhuti regarding her detriment claims but dismissed her unfair dismissal claim on the basis that Ms Vickers was unaware of the protected disclosure and it therefore played no part in her thought process when dismissing for poor performance.

The employment appeal tribunal (EAT) disagreed with the employment tribunal and upheld the unfair dismissal complaint on the basis that, when identifying the employer’s reason for dismissal, it was permissible to look more widely than the mind of the decision-maker. Taking into account Mr Widmer’s actions, the EAT decided that the company should be liable for Ms Jhuti’s automatic unfair dismissal for making a protected disclosure.

The EAT’s decision was overturned by the Court of Appeal which was of the view that the sole focus should be on the knowledge of the manager responsible for the dismissal (Ms Vickers) rather than taking into account Mr Widmer’s involvement.

The case then came before the Supreme Court which thought that the key issue to be decided was “the reason (or, if more than one, the principal reason) for the dismissal”. In interpreting that wording in the Employment Rights Act 1996, the Court thought that parliament’s intention was to provide that, where the real reason for dismissal was whistleblowing, a finding of automatic unfair dismissal should follow.

The Court was of the view that usually it would only be necessary to consider the reason put forward by the actual decision-maker. However, where that reason was obscured by a fictitious one, the tribunal/court had to consider all the background circumstances rather than allow the dishonest reason to taint its decision.

It therefore concluded that if a manager decided that a more junior employee should be dismissed for a particular reason (Ms Jhuti’s protected disclosure here), but hides it behind another reason that is not genuine (Ms Jhuti’s alleged poor performance here) which the dismissing manager endorses in good faith, the real reason for dismissal is the concealed one.

Given the unusual circumstances of this case, it is perhaps not surprising that the Court should interpret the legislation to ensure a fair outcome for the employee. Ms Vickers did not know the true position when dismissing Ms Jhuti and relying on Mr Widmer’s version of the background events meant that that decision was seriously flawed.

As the phrase “the reason (or, if more than one, the principal reason) for the dismissal” applies to “ordinary” as well as “automatic” unfair dismissal claims, this case is likely to be of wider application. It is therefore a potentially important decision regarding when the knowledge and culpability of an employee’s manager can be attributed to their employer who will ultimately be liable for unfair dismissal.

However, the Court noted that the facts of this case were extreme and future claims involving a more senior manager than the dismissed employee acting in such a duplicitous manner are likely to be rare. As a result, in the majority of cases, it is still likely to be the reason of the decision-maker that will be the focus of attention when determining an unfair dismissal claim.

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About Ian Jones

Ian Jones is a senior associate in the Cardiff Office of Blake Morgan LLP solicitors
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