In Rawlinson v Brightside Group the employer dismissed an employee for performance-related reasons, but gave him a different reason along the lines that they were planning to outsource his work. The employee resigned immediately, complaining that he should have been TUPE transferred, and later discovered the real reason for his dismissal.
The employee had insufficient service to claim unfair dismissal but he successfully claimed damages for his notice pay. Overturning the original Tribunal decision, the EAT ruled that deliberately giving a misleading reason for dismissal will generally amount to a breach of the duty of trust and confidence. A white lie serving a benign purpose might be allowed in some cases, but not here. The employer had given a false reason not just to soften the blow, but also to increase the chances of the employee diligently working his notice period and handing over his work.
This case has unusual facts, but it establishes a principle that could be important in other contexts. For example, an employee who is deliberately misled over the reason for their dismissal could successfully argue that they are released from their post-employment restrictions on the basis of the principle established by the EAT in this case.
However, in many (if not most) cases, giving a benign (but untrue) reason for dismissing an employee who has no grounds for bringing any employment-related claims would not cause any loss and might even benefit the employee.