Do you need to prove a potentially fair reason for dismissal when defending a constructive dismissal claim?
2nd September, 2019
In Upton-Hansen Architects Ltd v Gyftaki the Employment Appeal Tribunal considered whether in defending a constructive dismissal claim, an employer needed to assert and prove a potentially fair reason for dismissal.
Ms Gyftaki was a Senior Architect at Upton-Hansen Architects Ltd (UHA). Ms Gyftaki had used all her annual leave but needed to travel to Greece to sign some documents. She asked her line manager for additional leave and believed that she had been granted it, until her manager emailed her at 8.30pm the night before she was due to travel and refused the leave request. Ms Gyftaki responded stating that she had to travel and could not postpone and proposed to take the leave as unpaid leave.
On her return to work Ms Gyftaki was suspended pending an investigation of an allegation that she had taken the absence without authority and a further allegation relating to a period of absence in the previous July.
Ms Gyftaki resigned and brought claims for unfair dismissal and wrongful dismissal.
The Employment Tribunal (ET) found that the decision to suspend Ms Gyftaki, and to include the July matter, breached the implied duty of trust and confidence and that she had been constructively unfairly dismissed and wrongfully dismissed. The Tribunal made awards for wrongful dismissal and basic and compensatory awards.
UHA appealed on various grounds. One of the grounds UHA argued was that the Tribunal had erred by deciding that there was no potentially fair reason for the dismissal.
Employment Appeal Tribunal
The Employment Appeal Tribunal (EAT) dismissed this ground of appeal and found that the ET was entitled to find that there was no fair reason for dismissal, because UHA had not pleaded any such reason. In their response to Ms Gyftaki’s claim, UHA denied constructive dismissal but only stated “save as expressly admitted, all the Claimant’s claims are denied in their entirety”.
The EAT held that a generic denial is not sufficient in cases of constructive unfair dismissal as it does not serve to positively identify what, if anything, the employer’s case will be in the event that constructive dismissal is found. UHA had not asserted that if the dismissal was found to have occurred, such dismissal was fair, nor what the potentially fair reason for dismissal would in that case be.
The remainder of UHA’s grounds of appeal were dismissed, save for the appeal was allowed in one respect in relation to the fact that the ET had not sufficiently explained how it had arrived at the figure awarded for loss of remuneration and this matter was remitted to the ET.
This case is an interesting insight into how the Tribunal should approach cases of constructive dismissal. The burden of proof will be placed on the Respondent to prove a potentially fair reason for dismissal and this case serves as a reminder to Respondents that in cases of constructive unfair dismissal a potentially fair reason should be pleaded in the alternative. Otherwise, if the employee is found to have been constructively unfairly dismissed a Respondent may be prevented from relying on a potentially fair reason for the dismissal.
The Judge was unsympathetic to submissions regarding the practical problem that Respondents often face in pleading their case, where it is unclear what breach is even asserted particularly where a Claimant relies on multiple events, individually or cumulatively as amounting to a breach. The Judge stated that Respondents should seek further clarification on a Claimant’s claims if it is unclear as to the alleged breaches. From this, the Judge held, Respondents should be able to consider matters and determine whether a potentially fair reason exists.
If you have any questions on the above and how it will affect you, please do not hesitate to get in touch with a member of our employment team.