The Employment Appeal Tribunal (EAT) has found that an employer acted in breach of the implied term of trust and confidence in giving a false reason for the employee’s dismissal.

Rawlinson v Brightside Group Ltd, EAT

Facts

Mr Rawlinson was appointed as Group Legal Counsel in December 2014. A new CEO was appointed in January 2015, who soon identified concerns about Mr Rawlinson’s capabilities. Mr Rawlinson was aware that certain matters needed to be addressed but detailed concerns were not raised with him.

The CEO decided in March 2015 that the position was no longer tenable. The intention was to give Mr Rawlinson notice and require him to hand over to his successor while working his notice period. It was decided that rather than telling him that he was being dismissed due to concerns over his performance, he would be told that it was due to a reorganisation of legal services. At a meeting with his line manager in May 2015, Mr Rawlinson was told that the company would be using more external legal expertise. He was told that he was being given notice and his dismissal would be confirmed in writing.

Mr Rawlinson took the view that if the company’s legal services were being outsourced, this would qualify as a TUPE transfer. When his manager refused to disclose details of where the services were being outsourced to, he resigned and subsequently brought a claim for constructive wrongful dismissal for the balance of his three months’ notice pay.

His claim was rejected by the employment tribunal. The company was not obliged to give Mr Rawlinson a reason for the termination of his employment, and it had not acted in breach of the implied term of mutual trust and confidence.

EAT decision

The EAT allowed Mr Rawlinson’s appeal and upheld his claim.

It accepted that the company’s conduct had not been entirely negative; the reason for not telling Mr Rawlinson the true reason for his dismissal had been an intention to ‘soften the blow.’ However, the company had also hoped to secure his services for the duration of his notice in order to ensure an orderly handover of his workload.

In the EAT’s view, the implied term of trust and confidence includes an obligation not to deliberately mislead. This does not mean that an employer is under a broader obligation to volunteer information, but where it has chosen to do so it must be in good faith. The fact that Mr Rawlinson was not aware of the lie at the time of his resignation was not fatal to his claim.

Consequences

This case provides a good illustration of how an employer’s intention to be kind to an underperforming employee can backfire. Employers are not required to provide a reason for dismissal in these circumstances, but it is usually advisable to be open with an employee about the reason for their termination. Even if the individual has no right to pursue a claim for unfair dismissal, there remains the possibility that they might try to pursue other claims, such as discrimination or whistleblowing. A failure by the employer to be honest with the employee about the reasons for their dismissal could be used in support of such a claim.