Patel v Folkestone Nursing Home Ltd

The Court of Appeal considered whether a contractual disciplinary appeal which is pursued and succeeds has the effect of undoing the original dismissal so that the employee cannot treat himself as dismissed and cannot bring an unfair dismissal claim. The court held that, in an ordinary employment contract containing a contractual right of appeal against dismissal, the natural and objective meaning of that term is that a successful appeal revives the employment relationship and treats the original dismissal as having had no effect, absent express contractual provision to the contrary. The court also found an alternative and separate basis for upholding the tribunal’s jurisdiction: the employer’s letter allowing the appeal left a serious allegation unresolved and so arguably breached the implied term to maintain trust and confidence, giving rise to constructive dismissal. The panel therefore dismissed the appeal on the primary ground advanced by the appellant but allowed the appeal on the alternative constructive dismissal analysis and remitted aspects of the case for further consideration.

The appellant was dismissed for alleged gross misconduct by letter of 2 April 2014 and appealed under a contractual disciplinary appeal procedure. The appeal was heard and, by letter dated 24 June 2014, the employer informed the appellant that the appeal had been allowed. That letter, however, dealt only with one of two allegations (the sleeping-on-duty allegation) and did not address the more serious allegation of falsifying resident records nor whether any report to the regulatory body had been withdrawn. The appellant refused to return to work and presented ET claims on 17 July 2014 for unfair dismissal, wrongful dismissal and holiday pay.

Nature of the claim / relief sought: claims before the Employment Tribunal for unfair dismissal, wrongful dismissal and unlawful deduction of holiday pay.

Procedural posture: ET held that there had been a dismissal as at 17 July 2014 and found the dismissal unfair, awarding compensation (with reductions for contributory fault and mitigation and a 20% uplift under section 207A(2) TULRA for ACAS Code breaches). The respondent appealed to the Employment Appeal Tribunal, which allowed the respondent’s appeal on the narrow ground that a successful contractual appeal revived the employment relationship so that no dismissal persisted when the claim was presented. The appellant appealed to the Court of Appeal.

Issues framed by the Court:

• whether a contractual disciplinary appeal which is pursued and succeeds necessarily has the effect of treating the original dismissal as of no effect (i.e. revives the employment relationship);
• whether the respondent’s letter of 24 June 2014 was so deficient as to amount to a breach of the implied term to maintain trust and confidence, entitling the employee to treat the employment as at an end (constructive dismissal); and
• consequences for jurisdiction and remedies, including reference to the ACAS Code and s.207A TULRA.

Court’s reasoning: the court agreed with established authorities that, as a matter of objective contractual interpretation in an ordinary employment contract, a contractual right of appeal implies that if the appeal is pursued to conclusion and succeeds the parties are bound to treat the employment as having continued and the dismissal as ineffective. That analysis follows and was applied by the EAT in Salmon and is consistent with earlier authority (Tipton, Savage, Beckett, Roberts and later cases). The court nevertheless identified an independent and alternative basis for the ET’s jurisdiction: the letter allowing the appeal failed to resolve the more serious allegation and did not clarify the position in relation to any report to the regulator, which was arguably a breach of the employer’s implied duty to maintain trust and confidence and gave the employee reasonable grounds to treat the employment as at an end. On that basis the tribunal’s finding of (constructive) dismissal prior to 17 July 2014 was sustainable. The Court of Appeal therefore dismissed the appeal on the appellant’s principal ground but allowed the appeal on the alternative constructive dismissal basis, remitting the cross-appeal matters to the EAT for further consideration.

Appeal allowed in part. The court held that in an ordinary employment contract a contractual right of disciplinary appeal, if pursued to a successful conclusion, is to be given its natural meaning so that the employment relationship is revived and the original dismissal treated as of no effect. The court, however, accepted an alternative basis for the tribunal’s decision: the employer’s letter allowing the appeal left a major allegation unresolved and did not clarify withdrawal of a regulatory report, and that conduct was arguably a breach of the implied duty to maintain trust and confidence giving rise to constructive dismissal. The tribunal’s finding that there was a dismissal before 17 July 2014 was therefore sustainable on that alternative basis; the Court remitted cross-appeal matters to the EAT for further consideration and dismissed the respondent’s appeal on the whole.

The case began in the Employment Tribunal where the ET found that the appellant had been dismissed as at 17 July 2014 and determined his unfair dismissal claim in his favour. The respondent appealed to the Employment Appeal Tribunal (UKEAT/0348/15/DM and UKEAT/0006/16/DM; HHJ Richardson), which allowed the respondent’s appeal on the ground that a successful contractual appeal revived the contract so there was no dismissal when the claim was presented. The appellant then appealed to the Court of Appeal, which delivered its judgment in Patel v Folkestone Nursing Home Ltd [2018] EWCA Civ 1689 (this judgment).