Lakshmi v Mid Cheshire Hospitals NHS Trust

An employer that has adopted a disciplinary policy must follow it unless it can establish a good reason to depart from it. That obligation may arise as a free-standing contractual term or from the implied term of mutual trust and confidence, even where the policy is not expressly incorporated. An employee’s antecedent misconduct does not permit the employer to bypass the contractual disciplinary process. Loss caused by the resulting delay may be recoverable, but losses flowing from dismissal itself fall within the Johnson exclusion zone. Declaratory or injunctive relief preserving employment requires trust and confidence to have survived.

Dr Lakshmi, a consultant physician employed by the Trust, was summarily dismissed after disciplinary proceedings concerning her signing cremation certificates without examining bodies. The Trust proceeded with the hearing while a police investigation and possible CPS decision remained outstanding, despite its disciplinary policy and the claimant’s request for an adjournment.

She sought declarations that the hearing and dismissal were nullities, damages for breach of contract, and injunctive relief. The issues included the contractual effect of the policy, the Trust’s failure to adjourn, recoverable damages, and whether the employment relationship could be preserved.

1. HR2 was policy guidance rather than an expressly incorporated contractual document. However, the Trust was contractually obliged to follow it unless it could establish good reason not to do so. The same obligation arose from mutual trust and confidence.
2. The claimant’s antecedent misconduct did not entitle the Trust to bypass its contractual disciplinary process. The Trust had no good reason to proceed while the criminal investigation remained outstanding and therefore breached contract.
3. Damages were awarded for one month’s net pay, representing loss caused by the failure to adjourn. Loss flowing from the dismissal itself was irrecoverable under the Johnson exclusion zone.
4. Declaratory or injunctive relief preserving employment requires mutual trust and confidence not to have broken down. That condition was not met, and the claimant’s conduct also justified refusal of equitable relief.

The parties were invited to agree the consequential order, failing which the matter would be re-listed.