Yapp v Foreign & Commonwealth Office

An employer exercising a contractual power to withdraw an employee from an overseas post must provide fair treatment. This ordinarily requires disclosure of the substance and source of allegations, a preliminary investigation, and a genuine opportunity to respond before the decision is made. Confidentiality may be outweighed by that entitlement. An operational withdrawal power is distinct from withdrawal imposed as a disciplinary sanction, so a completed misconduct process is not always a prerequisite. However, the decision remains subject to contractual fairness and rational exercise of the discretion. A breach causing psychiatric injury may attract contractual damages where such injury was a reasonably foreseeable consequence of the employer’s conduct. Natural justice also generally requires different persons to investigate alleged misconduct and conduct the disciplinary hearing where the investigator has formed views about the case.

John Yapp, a Foreign and Commonwealth Office High Commissioner, was withdrawn from his post in Belize after allegations concerning his treatment of staff and alleged inappropriate conduct towards women. He was suspended, investigated, subjected to disciplinary proceedings and given a final written warning for bullying and harassment, although the allegations concerning women were not substantiated.

He claimed damages for breach of his employment contract and breach of the FCO’s duty of care, alleging that the withdrawal and subsequent process were unfair and caused financial loss and psychiatric injury. The central issues were whether the FCO could rely on its operational withdrawal power, whether it had afforded contractual fair treatment, whether the disciplinary process was unfair, and what losses were recoverable.

1. Withdrawal from post. The FCO Guidance permitted withdrawal on either operational or misconduct grounds. Operational withdrawal was not conditional on completing a misconduct or performance-improvement procedure. The operational power reflected the need to respond flexibly and, where necessary, quickly.
2. That discretion was nevertheless subject to the claimant’s express contractual entitlement to fair treatment. Fair treatment required, in the circumstances, some preliminary investigation of the allegations, disclosure of their substance and source, and consideration of the claimant’s response before the decision was made. Confidentiality did not override those requirements. The FCO had already decided to withdraw the claimant before consulting him and had not adequately investigated the allegations. The withdrawal therefore breached contract.
3. The court considered that compliance with the contractual obligation would probably have led to no withdrawal. The evidence showed that the allegations were materially unreliable or overstated, and that the alleged reputational damage was exaggerated. The withdrawal also breached the FCO’s duty of care for substantially the same reasons.
4. Disciplinary process. The fact-finding investigation was not shown to be methodologically flawed or unfair. However, natural justice required a different person to conduct the disciplinary hearing because Mr Gifford had expressed views about the claimant’s likely conduct and the existence of a disciplinary case before interviewing him. The appeal decision approving that course was also defective. That breach did not cause additional loss because a different disciplinary decision-maker would probably have reached the same conclusion on the treatment of staff.
5. Damages. The unlawful withdrawal caused the claimant’s loss of the Belize posting and contributed to his depression. The psychiatric injury was reasonably foreseeable: the case was analogous to Gogay v Hertfordshire County Council, not to the minor procedural breach in Deadman v Bristol City Council. Ordinary contractual principles governed causation, remoteness and mitigation. The claimant was entitled to damages for losses flowing from the withdrawal, subject to the findings on future work and the limits imposed by the medical evidence.

First-instance judgment. The claim succeeded in part, with damages payable for losses flowing from the unlawful withdrawal from post.