Employment Law Cases

Re-engagement and loss of trust and confidence

Kelly v PGA European Tour

A breakdown in trust and confidence is relevant to the practicability of re-engagement, even if the dismissal was for capability and not for misconduct.

Background

Mr Kelly had worked as the Marketing Director for the PGA from 1989 until he was dismissed in 2015 over concerns about his performance and willingness to ‘buy in’ to the newly appointed Chief Executive’s ideas. Before his dismissal, he covertly recorded two meetings at which the PGA tried to resolve the matter informally. He subsequently brought an unfair dismissal claim. The PGA admitted that his dismissal had been unfair due to a lack of proper procedure.

At a remedies hearing, the tribunal did not order re-instatement of Mr Kelly to his previous role but instead ordered that he be re-engaged in an alternative role of Commercial Director in China, for which the ability to speak Mandarin was an essential requirement. The tribunal held that neither the language requirement nor any trust and confidence issues arising from PGA’s doubts about Mr Kelly’s capability were significant enough to make such re-engagement impracticable.

The PGA appealed, arguing that the tribunal had mistakenly considered for itself whether trust and confidence had been damaged instead of asking whether the PGA had a rational basis for believing that it had.

EAT decision

The appeal was allowed.

What matters where re-engagement is concerned is the employer’s view of trust and confidence held the EAT. This must be tested by the tribunal as to its genuineness and rationality – the employer cannot simply assert without more that trust and confidence has broken down to avoid an order for re-engagement. Moreover, trust and confidence cannot only be invoked where conduct dismissals are concerned; it will be equally applicable where capability dismissals are involved.

As regards Mr Kelly’s covert recording, which only came to light following his dismissal, the EAT also held that there does not have to be conduct contributing to the dismissal to affect the question of re-engagement - all of the evidence available at the time of the remedy hearing must be considered. Events of which the employer was not aware at the time of the dismissal can be taken into account, and there is no reason in principle why a belief about capability or performance cannot be relied upon as causing trust and confidence to break down.

The EAT held that the PGA had genuinely lost trust and confidence in the Mr Kelly’s capability and held a rational basis for that view.

While being bilingual was an essential part of the role in China, the tribunal had not taken proper account of whether PGA could comply with the order for re-engagement. Whilst Mr Kelly indicated that he expected to make good progress in acquiring Mandarin within a year, the EAT found that Mr Kelly did not meet the genuine requirement of the role and that PGA had to create a role for a non-Mandarin speaker. The tribunal’s decision to impose re-engagement had fallen on the wrong side of the line between what is practicable and possible.

Link to judgment: https://www.bailii.org/uk/cases/UKEAT/2020/0285_18_2608.html

Comment

Applications for re-instatement/re-engagement may become more popular in this current climate and they have the added benefit of entitling the claimant to receive their back pay from the date of dismissal to the date of re-engagement – which given the backlog in the tribunal process may be significant.

It is also tactically a good idea to claim re-engagement/re-instatement as an employee because if the employer refuses then a further award is made to them. The only exception to this will be claims for constructive dismissal as a desire to return to the employer you say has fundamentally breached your contract does not look convincing.

Employees who covertly record meetings have already been warned by the courts that this is potential gross misconduct and could mean that a tribunal does not award compensation.