Opinion

Is ‘softening the blow’ when it comes to giving reasons for a dismissal a breach trust?

19th December 2017

The implied duty of trust and confidence is perhaps one of the more frequently cited implied duties within the employment relationship particularly in respect of unfair and wrongful dismissal claims.

But if employers are looking to soften the blow when it comes to the reason for a dismissal, can this be seen as a breach of trust between an employer and employee?

Mutual trust and confidence is key to an ongoing relationship and importantly…"The employer must not, without reasonable and proper cause, conduct itself in a manner calculated and likely to destroy or seriously damage the relationship of trust and confidence between employer and employee".

In the recent case of Rawlinson v Brightside Group Ltd, the EAT found that an employee who had resigned in response to a false reason for dismissal had been constructively wrongfully dismissed and was therefore entitled to receive damages for his notice period. The EAT provide a useful reminder in Rawlinson, of the need to provide the real reason for dismissal as opposed to “softening the blow” with false reasons.

Mr Rawlinson was employed as legal counsel with Brightside and was subject to a three month notice period. His employment began on 1 December 2014. During January 2015, concerns were raised by the new CEO of the company surrounding Mr Rawlinson’s capability to perform his role. Whilst Mr Rawlinson knew that certain matters did need to be addressed, the company did not raise any detailed concerns with him.

During March 2015, the claimant met with the CEO of the company and was advised that his position was untenable. The CEO informed the claimant that he committed a number of red card mistakes. The intention of Brightside was that the claimant would be served with notice and be required to work his notice period in order for an effective handover to his successor. The company took the decision not to inform Mr Rawlinson that his dismissal was due to poor performance. Instead and in order to “soften the blow”, the company informed Mr Rawlinson that the dismissal was due to the decision to restructure the legal service. The company advised that it would be outsourcing its legal services as part of this restructure.

Upon hearing of this outsourcing, Mr Rawlinson stated that if this was an outsourcing, it would be a relevant transfer and therefore caught by TUPE. The company declined to comment on the supposed outsourcing and who the services would be outsourced to. Following this, Mr Rawlinson resigned and stated that his resignation was in response to the fact that the company had acted in breach of contract and that as a result, he would not be working his notice period.

The Employment Tribunal (ET) refused Mr Rawlinson’s claim that he been constructively wrongfully dismissed. The ET found that the company were not obliged to give Mr Rawlinson a reason for the termination of his employment nor were they required to give him feedback on his performance.

The Employment Appeal Tribunal (EAT) allowed Mr Rawlinson’s appeal and confirmed that he had been constructively wrongfully dismissed. The EAT stated that the implied duty of mutual trust and confidence places on the employer an obligation not to deliberately mislead. The EAT noted that whilst employers are not under a wider obligation to volunteer information, where a choice has been made to do so, it must be done in good faith.

Employer Considerations

Rawlinson is an important reminder to employers of the dangers of dishonesty when providing the reasons for a dismissal. There is no contractual obligation to provide the reasons for dismissal (although there are strong benefits of giving reasons) however, where an employer does give reasons, they cannot deliberately mislead the employee.

If an employer does deliberately mislead an employee even where the motive may be to ‘soften the blow’, Rawlinson confirms that there is a clear risk that the implied terms of mutual trust and confidence could be breached.

 

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