Constructive dismissal: procedural fairness during investigation

Retirement Security Ltd v Wilson

An employer’s unreasonable disciplinary investigation breached the implied term of trust and confidence which entitled the employee to resign and successfully claim unfair constructive dismissal.

Background

Ms Wilson was a manager at a retirement community. Three of her subordinates complained about her, accusing her of serious misconduct. She was almost immediately suspended invited to an investigatory meeting but, due to a postal error, didn’t receive the letter until 24 hours before the meeting. She was given a list of nine potentially serious matters without any details and in circumstances where a report made to the employer confirmed that there was no evidence to support a number of the allegations. No further information about what the meeting was to discuss was given, other than this list and she wasn’t given the statements of her subordinates whose complaints formed the basis of the charges against her.

During the meeting, Ms Wilson’s line manager initially presented herself as Ms Wilson’s companion. She was then referred to as assisting both parties. Mid-way through the meeting she became the chairperson and before the meeting ended left due to a conflict of interest. The employer itself described the meeting as an ‘ambush’. After the meeting, Ms Wilson resigned believing that her employer had already decided that she was guilty of misconduct without giving her a fair hearing or proper sight of the evidence. She brought a claim of unfair constructive dismissal.

A tribunal upheld her complaint. It held that because Ms Wilson had already been suspended then this was a formal and not an informal process, the conduct of the alleged investigatory meeting was high handed and that the nature of the allegations, the lack of evidence provided, and the shifting roles of the participants all contributed to a repudiatory breach of the implied term of trust and confidence. The tribunal said that the treatment was ‘not in keeping with the fair treatment of a manager of some seniority with the claimant’s responsibilities’. The employer appealed, arguing that the tribunal hadn’t considered a fair reason for dismissal and that it had confused the requirements of a disciplinary hearing and an investigation hearing.

EAT decision

The appeal was dismissed.

Although the ACAS code doesn’t require the same standards of procedural fairness and natural justice in relation to investigations as it does with formal disciplinary hearings, because Ms Wilson had already been suspended then this was a formal part of the process. The way the investigation had been carried out here was so flawed that it amounted to a breach of the implied term of trust and confidence. Ms Wilson’s resignation was accepted with ‘undue haste’ which indicated this was the intended outcome.

Although the way in which an investigation process is to be conducted will depend on the particular circumstances of the case, if, without reasonable and proper cause, the employer acts in a manner likely to destroy or seriously damage the relationship of confidence and trust, it would be a fundamental breach of contract. Here, a cumulation of errors meant that Ms Wilson believed trust and confidence to have been destroyed.

In addition, the employer had not pursued any case before the tribunal that there was a fair reason for any dismissal that it might find. If an employer chose not to put forward any positive case as to the reason for dismissal in a claim of constructive unfair dismissal, the tribunal was not obliged to try and construct a possible reason on the employer’s behalf.

Link to judgment: https://www.bailii.org/uk/cases/UKEAT/2019/0019_19_1107.html

Comment

This case comes shortly after the Court of Appeal decision in Sattar v Citibank NA and so whether the views of the Court of Appeal might have affected the decision is unknown, unless this case is appealed. However, the question of whether an investigation breaches trust and confidence is always going to be a matter of fact. Here the combination of the suspension, delayed notification of the hearing, the failure to properly set out the allegations but just give headlines, some of which they knew they had no evidence of and so making it look more serious for Ms Wilson than it was, the changing roles of a person who started as a companion and then moved to disciplinary officer, and the overwhelming impression that the employer had decided Ms Wilson was guilty, all helped to tip the balance her way.

However, as the Court of Appeal made clear in Sattar, as long as an employee is given full details of what they are facing at some point before they are dismissed, this will not be unfair. This case is not a precedent to say that all investigation meetings should be run like mini disciplinary hearings - there may often be good reason for getting an initial view from a claimant without giving them time to prepare - however the combination of everything in this case meant that this was a constructive dismissal.