Be honest when dismissing someone

In a recent Employment Appeal Tribunal (EAT) decision, an employer dismissed their employee, stating that they were reorganising his duties by outsourcing. In reality, a new chief executive was joining the business and had expressed concern about the employee’s ability. The business had felt that taking this approach would soften the blow of dismissal and avoided the need for difficult conversations relating to performance. However the employee happened to be the company’s legal counsel and immediately suggested that, if his role was to be outsourced then it would fall under the rules of a TUPE transfer. Having asked a number of questions that had not been answered satisfactorily, and on learning the real reason for the employer wished to let him go, he resigned and claimed constructive dismissal as a result of a breach of the implied term of mutual trust and confidence. He brought a claim for payment of his notice period and compensation for failure to inform and consult under TUPE.

Initially the employment tribunal found in favour of the employer but the EAT reached a different conclusion as it considered that the employee was not complaining about the dismissal itself but about the false information he had received about why he was being let go.

This case makes it clear that it would be a breach of the implied duty of trust and confidence if an employer misled an employee about the reason for bringing employment to an end. If an employer uses a particular reason to bring about a termination it must ensure that the reason can be demonstrated – be transparent if at all possible and at the very least, avoid being dishonest.

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