In Rawlinson v Brightside Group Ltd the EAT considered whether an employee who was given an incorrect reason for his pending dismissal was entitled to receive damages for his notice period after he resigned. It found that he was.
The employer decided to dismiss the employee, its Group Legal Counsel, because of performance concerns. However, in order to "soften the blow", and to allow time for an orderly handover during his notice period, he was told that the dismissal reflected a decision to reorganise the company's legal service requirements and use more external legal advice.
On the basis of that information, the employee argued that there was a TUPE transfer and that his employment was being terminated because of that. He resigned in response to the employer's conduct, arguing that the employer had acted in breach of the duty of trust and confidence and claimed damages for constructive wrongful dismissal. He only found out the real reason for the termination later, as a result of a subject access request.
The tribunal found that because there was no duty on the employer to provide a reason for the termination of employment, it had not acted in breach of contract when it gave a different reason for the dismissal. The EAT overturned that decision. It was uncontroversial that the implied term imposes an obligation on an employer to act in good faith and not to mislead. Where the employer had chosen to give the employee information about the reason for the dismissal, and part of the reason was to preserve the employment relationship during the employee's notice period, the implied term required that information to be provided in good faith. The employee's claim for damages for notice pay therefore succeeded. The fact that the claim was for contractual damages meant that it did not matter that he had not in fact resigned in response to the breach subsequently complained of.