In the recent case of Salmon -v- Castlebeck Care (Teesdale) Ltd and ors UKEAT/0304/14/DM, the EAT provided clarification on the practical effects of a successful internal appeal against dismissal. A successful appeal under a contractual appeal process means the employment contract is automatically restored. It is not necessary for the employer to make an express decision to reinstate the employee. The fact that an employer has not communicated the result of an appeal does not prevent the revival from taking effect.

Background

The claimant was employed by CC Ltd until 10 July 2013 when she was summarily dismissed for alleged gross misconduct. She appealed this decision under the contractual appeal procedure. Meanwhile, on 4 September 2013, the business of CC Ltd was transferred to Danshell Healthcare Limited (DH Ltd) under the TUPE 2006 regulations. 

The claimant’s appeal was heard on 17 September 2013, by the HR director, whose employment had transferred to DH Ltd. The claimant’s dismissal was deemed ‘unsafe’, but no express decision was taken to order reinstatement or revival of the claimant’s contract. The claimant was not informed at this time of this outcome. Instead, instructions were given to an employment consultancy to conclude a settlement agreement, but this did not happen.

Employment Tribunal

The claimant bought claims against both CC Ltd and DH Ltd. The Employment Tribunal upheld the claim against CC Ltd, but rejected the claim against DH Ltd. The ET determined that DH Ltd had never been the employer of the claimant; as she was not employed by CC Ltd immediately before the TUPE transfer, her employment had never transferred to DH Ltd. 

The judge found that, further to the reasoning in G4S Justice Services (UK) Ltd -v- Anstey UKEAT/0304/14/DM, for employment to transfer in these circumstances there had to be, not only a successful appeal but also, a clear decision to reinstate the employee. On the evidence there was no such decision to reinstate and, accordingly, the employment did not transfer. 

The claimant appealed to the EAT.

Employment Appeals Tribunal

Langstaff P referred to case law which established that the effect of a successful contractual appeal against an earlier dismissal was the retrospective reinstatement of the contract of employment. This case law had been heavily relied upon in the G4Scase. He concluded that the ET had erred in looking for a separate decision that there should be a reinstatement. This was not necessary since it must be implicit in any system of appeal, unless otherwise stated, that the appeal panel has the right to reverse or vary the decision made below. 

In relation to the communication of the decision, Langstaff P pointed out that this was not to be equated with the situation in which an employee is told of their dismissal; then, communication is needed. However, in contrast, where a decision has been taken to allow an appeal, the decision has the effect of immediately reviving the contract (subject to there being a contractual term or provision to the contrary). It is not necessary to communicate the outcome in order for a successful appeal to have that effect. 

The claimant’s employment was, therefore, transferred to DH Ltd and her rights were accordingly against DH Ltd. The EAT substituted for the ET’s decision, a decision that the claimant succeeded against DH Ltd and the judgment against CC Ltd was discharged.

Comment

This decision clarifies the effect of successful appeals. The wider practical effect is that employers should take care to consider the consequences of decisions. If an employer cannot, or refuses, to reinstate after an appeal, then this will need to be separately addressed, although there are dangers in doing so. 

It also shows the potential liabilities for transferee employers and illustrates the importance of conducting a thorough due diligence exercise prior to a transfer.