Gary Freer examines a case in which the employer dismissed a senior manager for misconduct only after actively looking for a pretext to do so.

In Williams v Leeds United Football Club [2015], a High Court judge (Lewis J) considered whether circulating pornography by email justified summary dismissal. An interesting aspect of the decision was that the evidence of misconduct was unearthed during a trawl by the employer for evidence which might give grounds for dismissal after it had already decided to dismiss the employee come what may. Did that make a difference?

Background

Mr Williams was employed by the club (Leeds) as technical director. This role was a very senior management role, second only to the chairman.

In summer 2013, Leeds restructured its operations and Mr Williams' post was deleted. On 23 July, he was given written notice of termination on the grounds of redundancy. At trial, Leeds accepted that it was required to give 12 months' notice.

Before that notice was given, and for over one month beforehand, Leeds had started investigations into Mr Williams and other senior managers to see if it could discover evidence to justify dismissing them for gross misconduct. Furthermore, it had decided that, with or without such evidence, it would refuse to pay any further sums to Mr Williams – in full knowledge that its refusal would be in breach of his contract of employment.

First ‘DirtyLeeds’ email

Very shortly after giving notice, Leeds discovered that, over five years earlier, Mr Williams received and forwarded, via his work email account, an email and attachments containing photographs which, said the judge, could when taken as a whole be characterised as obscene and pornographic. He had sent it to an old friend, Dennis Wise, with a covering message – ‘Looks like dirty Leeds!’ – which was intended as a humorous play on words (which readers who remember the Leeds team of the early 1970s will readily appreciate).

Leeds initiated disciplinary proceedings on the basis of the single email sent to Dennis Wise. It referred to its code of conduct and its email policy, which expressly prohibited the use of email to transmit words or pictures which were ‘obscene, lewd or pornographic’. The disciplinary procedure described this as a ‘serious disciplinary matter’.

Mr Williams disputed that sending this single email to an individual who he knew would not be offended constituted gross misconduct. Leeds disagreed and he was summarily dismissed. The dismissal was upheld on appeal.

More emails emerge after dismissal

After Mr Williams’ dismissal, and after he had served his particulars of claim in the High Court proceedings, evidence emerged that, using his work email, had had forwarded the email and the pornography attached to two other recipients.

One was Gus Poyet, then playing for Tottenham Hotspur. The other was a Ms Lamb, a junior female employee who, at the time, was working as a receptionist at the training ground.

The judge rejected Mr Williams' explanation that he had thought that, as a keen fan, she would find the ‘Dirty Leeds’ pun funny. The true reasons for forwarding the email to her were never established, but the judge noted that she was the first to receive an email: Messrs Wise and Poyet only received them two hours later on the same day.

At trial, Leeds relied on these subsequently discovered emails to justify the summary dismissal. The issue to be decided was whether Mr Williams’ conduct amounted to a sufficiently serious breach of the implied duty of trust and confidence to amount to a repudiation of the contract, entitling Leeds to dismiss him without notice.

Conduct was repudiation

The judge found in Leeds' favour for four reasons:

  • Mr Williams occupied a very senior management post;
  • the images involved were pornographic and obscene;
  • the sending of these images to a junior female employee, by a senior manager with significant influence over her career, might well have caused offence and would have left Leeds vulnerable to a claim for harassment; and
  • the conduct could have damaged Leeds' reputation and harmed its prospects of securing and retaining sponsors and supporters.

The judge made it clear that the conduct of forwarding the email to Ms Lamb was sufficiently serious in itself to justify summary dismissal.

It was this (subsequently discovered) evidence which had justified the dismissal.

What if Leeds had found the emails before dismissal?

The trial judge looked at what would have happened if the employer had known about the offending emails before it decided to terminate Mr Williams' employment on a different ground (redundancy). He accepted that the letter of dismissal would have amounted to an affirmation of the contract of employment and Leeds could not thereafter have relied on those facts as justifying summary dismissal.

On the facts in this case, however, the employer had not been aware of them and so the question of affirmation did not arise.

Did Leeds' own breach of contract make a difference?

Mr Williams argued that it did. Leeds' conduct had been unfair and involved bad faith. The court should decline to allow it to justify termination of his contract without notice by reference to the subsequently acquired knowledge of his own repudiatory breach.

The judge rejected this argument, referring to the well known case of Boston Deep Sea Fishing [1888], as recently examined by the Court of Appeal in Cavenagh v William Evans Ltd [2012].

He accepted that Leeds committed an anticipatory breach of contract on 22 July 2013 when it decided not to pay any further salary under the contract, or breached the contract by failing to pay the salary due before the contract was brought to an end on 30 July 2013. However, this did not prevent Leeds from dismissing the claimant summarily when it discovered the misconduct (nor did it prevent it from relying on misconduct discovered after the dismissal to justify termination).

Similarly if, viewed objectively, the conduct amounted to a repudiatory breach by the employee, then the employer was entitled to rely upon that breach as justifying the dismissal, irrespective of its motives for doing so. The fact that Leeds was motivated by financial and commercial interests, and wished to find a reason (and indeed was actively looking for evidence) to justify the dismissal, did not matter. Nor did the fact that Leeds was unprepared until shortly before the trial to accept that the notice period was 12 months, rather than three, prevent it from relying upon conduct amounting to a repudiatory breach to justify termination of the contract without notice.

There had been no affirmation or waiver of the employee’s repudiatory breach, so the employer was not prevented from relying on that breach to justify summary dismissal, even though it had itself breached its contractual obligations, was looking for an excuse to justify dismissal and was motivated by financial interests. There was no basis for concluding that it was unfair or unjust to allow Leeds to rely upon Mr Williams' repudiatory conduct to resist a claim for wrongful dismissal in such circumstances.

The judge noted that this was also consistent with other Court of Appeal authority on the law of contract in commercial disputes, notably Glencore Rotterdam BV v Lebanese Organisation for International Commerce [1997].

Lessons

For those employers seeking evidence to justify summary dismissals, the preferred route used to be an audit of expense claims. In the digital age, a forensic trail looking for past email indiscretions has become common.

It seems likely that in this case Mr Williams had lost much of the sympathy which the court might otherwise have had for him, particularly when he failed to provide any credible explanation for forwarding the material to a junior female employee. In other cases, the court might be more reluctant to accept that a single incident of foolishness and bad judgment would justify dismissal. The outcome might also differ according to the nature of the material being distributed.

However, this decision should reinforce to senior employees that such behaviour is a risk simply not worth taking. If their employer is out to get them, they shouldn’t make it easy for it to dismiss them.

This bulletin first appeared in Employment Law Journal 158 (www.lawjournals.co.uk), March 2015.