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Employment Law

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Veale Wasborough Vizards , 04 DEC 2017

Implied Term of Trust and Confidence and False Reasons for Dismissal

Implied Term of Trust and Confidence and False Reasons for Dismissal
Helen Hughes
Veale Wasbrough Vizards

The Employment Appeal Tribunal (EAT) has found that the implied term of trust and confidence may be breached if an employer misleads an employee about the reason for their dismissal.

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Law and Practice

The status of employment rights on the transfer of an undertaking is an extremely complex area of...

In Rawlinson v Brightside Group Mr Rawlinson was employed by Brightside Group Ltd (Brightside) as in-house legal counsel. Brightside had concerns in relation to Mr Rawlinson's performance and decided to dismiss him. In order to 'soften the blow' to Mr Rawlinson, Brightside chose to tell the Claimant that it would be outsourcing legal services and that this, rather than the performance concerns (which had not been notified to Mr Rawlinson), was the reason for his dismissal.

It was hoped that in doing so, Mr Rawlinson would be encouraged to work his three-month notice period and thus ensure a smooth handover of work. Mr Rawlinson, however, considered that if Brightside were outsourcing legal services this would be a TUPE transfer. When Brightside refused to comment on who the legal services were being outsourced to Mr Rawlinson considered Brightside were acting in breach of the implied term of trust and confidence and went on to resign with immediate effect in response to that breach. Mr Rawlinson brought a claim, amongst others, for constructive wrongful dismissal for notice pay.

The Employment Tribunal initially dismissed the claim on the basis that the Mr Rawlinson's complaint related to the manner of his dismissal and, under established case law, it is not possible to receive damages for breach of contract in respect of unfair treatment connected to a dismissal.

The EAT overturned this decision and awarded Mr Rawlinson his notice pay. The EAT held that the complaint did not relate to the dismissal itself, but rather to the information that Brightside gave Mr Rawlinson in the hope he would work his notice period. The EAT confirmed that the implied term of trust and confidence does include an obligation not to deliberately mislead. Whilst an employer does not have to volunteer information about the reason for dismissal, where it chooses to do so, the disclosure should be made in good faith.

Best Practice

This case shows the potential risks of providing misleading information to an employee about why their employment is ending. In particular, the case suggests that where an employee does not have the length of service necessary to bring a claim for unfair dismissal, they may still have contractual claims arising out of what might be called 'unfair' treatment during the dismissal process.