Settlement Agreements and Constructive Dismissal

A recent case in the Employment Appeal Tribunal (EAT) raises a number of note-worthy points.

The Claimant had worked as the Practice Manager of a dental surgery for many years. It came to the attention of the Practice owner that she had failed to properly record an employee’s sickness absence. The Claimant was suspended and called to a disciplinary meeting. She requested to be accompanied by a dentist with whom she had worked for a long time. The Practice refused to allow the Claimant to bring her requested colleague as it was argued that, due to their close friendship, he would be overly sympathetic to her. Due to the animosity in this case the disciplinary process was abandoned and the Claimant was signed off sick. She subsequently resigned and claimed constructive dismissal.

At the Employment Tribunal it was decided that the Claimant had been unfairly constructively dismissed. The Respondent appealed this decision as it disagreed with the Tribunal’s decision that the Claimant had been constructively dismissed.

The first argument that the Respondent put forward was that the refusal to allow the Claimant to be accompanied did not breach the implied term of trust and confidence. The EAT disagreed, stating that, although the dentist did not technically fall within the statutory definition of a companion (i.e. was not a colleague in the strict sense and was not a Trade Union representative), nonetheless, the Respondent’s decision not to allow him to accompany the Claimant had been unreasonable. The Respondent was wrong to refuse to allow the Claimant to be accompanied as it had erred in its understanding as to the role of a companion. There were no grounds for refusing the Claimant’s requested companion from attending. The refusal forced the Claimant to attend the hearing on her own and under duress which was a breach of the duty of trust and confidence.

The Respondent also appealed the Tribunal’s decision that its failure to hold an investigatory meeting with the Claimant to put the allegations to her was a further breach of duty. The Respondent argued that the Tribunal was ruling that an investigatory meeting was compulsory in every case and that this was not in line with the ACAS Code and Guide. The EAT also disagreed with this submission. The EAT stated that the Tribunal had not implied that such meeting was compulsory in every case but had, in fact, correctly concluded that whether such meeting should have taken place was a question of fact for the Tribunal. The Tribunal’s decision was that, in these circumstances, a reasonable employer should have held an investigatory meeting as the Claimant’s integrity had been challenged. An adequate investigation would have demonstrated that in fact the Claimant required further supervision and training in her role rather than a disciplinary process. The EAT agreed.

The final area of appeal put forward by the Respondent’s related to the law surrounding constructive dismissal. It contended that the recent case of Tullett Prebon Plc v BGC Brokers LP had changed the law by placing relevance on the Respondent’s subjective intention in the treatment. It submitted that the Tribunal should have made a finding relating to this.

The EAT disagreed, stating that the long established test in constructive dismissal cases was whether, when objectively viewed, the employer’s conduct was likely to destroy or seriously damage the trust and confidence that the employee was entitled to have in the employer. The Tullett case had merely stated that all of the circumstances should be considered in so far as they impact on the objective assessment. The EAT confirmed that the case had not deviated from the long-established principles regarding cases of Constructive Dismissal.

Key considerations:

  • Right to be accompanied – this case would suggest that the right to be accompanied (which is set out in statute) may have been extended to allow more choice to an employer. Under statute, you may bring either a colleague or a Trade Union representative as a companion to a disciplinary or grievance hearing. However, it is important to keep this judgment in context. Rather than expressly extending the statutory provision, this matter was related to whether the Respondent’s refusal was unreasonable and was therefore a breach of the duty of trust and confidence. It is also necessary to remember that this was only one of a series of breaches which were deemed to have entitled the Claimant to resign and claim constructive dismissal. How much this case can be relied on in order to assert the right to bring a companion other that a colleague or Trade Union representative remains to be seen.

  • Investigatory meeting – Where there are concerns about an employee which warrants disciplinary action, it is obviously crucial for employers to fully investigate any allegations. If there is any doubt that this has happened, we would always recommend that you seek legal advice.

  • Constructive dismissal – remember, what matters is whether, when viewed objectively, your employers is deemed to have acted in a way which was likely to breach the duty. Therefore, always be very careful to consider the actual implication of your employer’s actions.

Should you have any queries relating to any of the issues raised by this case, please do contact one of our settlement agreement lawyers who may be able to help negotiate a settlement. digg stumbleupon buzzup BlinkList mixx myspace linkedin facebook google yahoo