Employers must not mislead over reason for dismissing

A salutary warning that employers should be honest when dismissing employees has been reinforced by the Employment Appeal Tribunal (EAT) in its judgment in Rawlinson v Brightside Group Ltd [2017] UKEAT 0142_17_2111 (21 November 2017). The case centred on whether an employee who had resigned in response to a false reason for dismissal could bring a claim for breach of contract for his notice pay.

Rawlinson was group legal counsel at Brightside. His contract provided for a three-month notice period. In January 2015, Wallin, a new CEO, was appointed. He identified concerns about Rawlinson’s capabilities.

In March 2015, Wallin decided to replace Rawlinson. To soften the blow, he decided that Rawlinson would be told that his termination stemmed from a review of legal services, and more use of external advisers.

Rawlinson asserted that this would be a TUPE transfer and asked for details of the new service provider. His manager refused to provide any further information. Rawlinson decided that Brightside was acting in breach of contract and advised that he was resigning with immediate effect.

Rawlinson brought claims in the employment tribunal including a claim for constructive wrongful dismissal for the balance of his notice pay. The tribunal rejected his claim. They found that Brightside had not been obliged to give Mr Rawlinson a reason for the termination of his employment. Brightside’s conduct did not amount to a breach of mutual trust and confidence.

On appeal, the EAT overturned the tribunal’s decision and substituted a finding that the claim succeeded.

The EAT said that in virtually all cases employers were under an obligation not to deliberately mislead employees. It noted that Rawlinson had not left because of the lie, not least because he was not aware he had been lied to, but that was not fatal; he could still rely on Brightside’s conduct as justifying his resignation, regardless of his reason for resigning at the time.