A recent case in the Employment Appeal Tribunal (EAT) has sounded a cautionary note for employers seeking to rely on some other substantial reason as a reason for dismissal.
Employers are often quick to assume that a breakdown in the working relationship (especially where senior employees are involved) entitles them to dismiss the employee and rely on that breakdown as constituting a fair reason for dismissal. Tribunals and courts, however, may be slower to agree with such reasoning.
In this case, a senior manager fell into dispute with his employer over the payment of profit shares and his contractual terms and conditions. As is often the way, solicitors became involved in correspondence and the employee alleged that he had grounds for a constructive dismissal claim as a result of a breakdown in trust and confidence. Ultimately, the employer dismissed the employee, citing a breakdown in the working relationship. The employee therefore claimed unfair dismissal, alleging that the working relationship was not broken beyond repair, and that the parties had merely been engaged in a power struggle.
Both the tribunal and the EAT agreed with the employee. Objectively, and despite assertions in the solicitors’ correspondence, the working relationship was not broken beyond repair. The dismissal could not therefore be for some other substantial reason, and was therefore unfair (although the employee’s compensation was reduced for contributory fault).
Generally, courts and tribunals will be alive to arguments about whether the working relationship is truly beyond repair. Employers should be slow therefore to assume that any spat between them and an employee will entitle them to dismiss that employee on that basis.