Legal Corner: Employer in breach for not being honest with employee about his poor performance

23rd Feb 2018

There is often the temptation, when dealing with an awkward situation at work – particularly when it relates to an employee’s performance – to not be wholly honest with them, in an attempt to avoid hurting their feelings. However, this temptation can sometimes backfire, as occurred in Rawlinson v Brightside Group Ltd UKEAT/0142/17.

Mr Rawlinson was employed as Group Legal Counsel at Brightside, an insurance broking business, from December 2014. A new Chief Executive, Mr Wallin, was appointed in January 2015 and very soon became concerned about Mr Rawlinsons’s ability to effectively perform his role. Although some issues were drawn to his attention, Mr Rawlinson was not given detailed feedback on the concerns. By March 2015, Mr Wallin had identified three ‘red card’ mistakes and took the view that Mr Rawlinson’s position was untenable. A decision was taken that his employment should be terminated due to his performance and Brightside began to consider how its legal service requirements might be met in the future.

In May 2015 Mr Rawlinson was informed that Brightside had reviewed its approach to managing its legal service requirements, and concluded that the current arrangements were not working, so wanted to take a different approach. He was told that he was being given three months notice and his dismissal would be confirmed in writing. He was not told that his dismissal was in any way related to his performance. This was an intentional act, in order to ‘soften the blow’ for Mr Rawlinson.

Mr Rawlinson was shocked by the news of his termination and suggested that if Brightside’s legal services were being outsourced, then this was a relevant transfer for the purposes of TUPE such that his employment should transfer to whoever was taking over that work. He complained that he had not been consulted about this. However, upon asking who would be taking over the legal work, Brightside declined to comment. After taking a day’s leave, Mr Rawlinson decided that Brightside was acting in breach of his contract and that he was resigning in response such that he considered himself to be constructively unfairly dismissed. It was only after this, following a Subject Access Request that Mr Rawlinson came to know the real reason for his dismissal.

Mr Rawlinson brought claims in the Employment Tribunal alleging that Brightside had failed to inform and consult with him about a relevant TUPE transfer, but the tribunal found that there was no such transfer. He also brought a claim for constructive wrongful dismissal, alleging that he had resigned in response to a breach of the implied term of mutual trust and confidence. The Tribunal found that Mr Rawlinson had resigned because he believed that he had not been consulted about a transfer. They noted that there was no obligation on Brightside to give him a reason for the termination of employment (since he had not accrued the right not to be unfairly dismissed), and he was dismissed on notice. The Tribunal found that Mr Rawlinson’s complaints were actually about the manner of his dismissal and that nothing that Brightside had done amounted to a breach of the implied term of mutual trust and confidence. His claim was therefore dismissed.

Mr Rawlinson appealed to the Employment Appeal Tribunal. He argued that whilst Brightside were not under an obligation to give him a reason for his dismissal, they were under a duty not to mislead. Once they had chosen to give him a reason, it was incumbent upon them not to give an untrue reason. The EAT agreed. They also noted that whilst the decision not to provide the real reason was in order not to upset Mr Rawlinson, it was not entirely altruistic – Brightside wanted him to work his notice period and allow them time to plan for the future and arrange for a handover. The EAT made clear that whilst an employer is not necessarily placed under some broader obligation to volunteer information, where a choice has been made to do so, the implied term must require that it is done in good faith. Mr Rawlinson was therefore awarded his notice pay of three months.

This case serves as a reminder to employers that whilst there is often merit in not being completely honest about the reasons why an employee’s contract is being terminated, an employer also needs to bear in mind that if it creates a wholly fictitious reason, it may well be considered to be in breach of contract.

Safia Tharoo, Barrister, 42 Bedford Row, London

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