Patel v Folkestone Nursing Home Ltd

A contractual disciplinary appeal against dismissal ordinarily has the effect of reviving the employment relationship if it is pursued successfully. Both parties must then treat the employment as continuing throughout, and the employee cannot choose whether to return or rely on the original dismissal. This remains so where an unfair-dismissal claim was presented before the appeal was decided. The ordinary rule may be modified by express contractual terms. Separately, serious mishandling of an appeal may breach the implied duty of trust and confidence and entitle the employee to treat the employment as constructively terminated.

The employer dismissed the appellant for alleged gross misconduct. He appealed under the contractual disciplinary procedure, and the employer informed him that the appeal had succeeded, but failed to resolve one serious allegation or clarify the position regarding a regulatory notification. The appellant did not return to work and presented claims to the Employment Tribunal, including unfair dismissal.

The Employment Tribunal held that he had been dismissed by the date of presentation and found the dismissal unfair. The Employment Appeal Tribunal, in decisions bearing citations UKEAT/0348/15/DM and UKEAT/0006/16/DM, allowed the employer’s appeal, holding that the successful appeal revived the employment contract. The central questions were the effect of a successful contractual appeal and whether the employer’s handling of the appeal gave rise to constructive dismissal.

Disposition. Sales LJ gave the judgment, with which Sir Ernest Ryder and McFarlane LJ agreed. The appeal was allowed on the alternative constructive-dismissal analysis. The respondent’s appeal to the EAT was dismissed in its entirety, and the appellant’s cross-appeal was remitted to the EAT to consider whether it had reasonable grounds to proceed.

1. An ordinary contractual right of appeal against disciplinary dismissal carries the objective meaning that, if the appeal is pursued and succeeds, both parties must treat the employment relationship as having continued throughout. The original dismissal is retrospectively extinguished. The employee is entitled to back pay and the other contractual benefits of continued employment.
2. The employee cannot treat the successful appeal as an offer which may be accepted or rejected. Nor does the date on which an unfair-dismissal claim is presented freeze the legal position. The court applied the reasoning in Salmon v Castlebeck Care (Teesdale) Ltd [2015] ICR 735 and Roberts v West Coast Trains Ltd [2004] EWCA Civ 900; [2005] ICR 254. The reasoning endorsed in West Midlands Cooperative Society v Tipton [1986] AC 536 also supported that conclusion.
3. The ordinary rule is subject to express contractual qualifications. Roberts turned on a special term permitting substitution of demotion for dismissal. In a usual contract without such a qualification, the appeal has the ordinary retrospective effect.
4. The appellant’s possible collateral motives for appealing, including clearing his name or avoiding a potential deduction under section 207 A(3) of the Trade Union and Labour Relations (Consolidation) Act 1992, did not alter the objective meaning of the contract.
5. The employer’s failure to resolve the serious allegation concerning records, clarify its consequences, and explain whether the regulatory notification had been withdrawn was capable of breaching the implied duty to maintain trust and confidence. On the facts, the appellant was entitled to refuse to return and to treat himself as constructively dismissed.
6. The appellant had drafted his ET1 as a litigant in person. It was to be read fairly to identify the substance of his complaint. The Employment Tribunal had jurisdiction to determine the unfair-dismissal claim. The court left undisturbed the EAT’s rejection of the challenge under section 207 A(2) of the Trade Union and Labour Relations (Consolidation) Act 1992.

• Court of Appeal (Civil Division) — The appeal was allowed on the constructive-dismissal basis. The respondent’s EAT appeal was dismissed in full, and the cross-appeal was remitted.
• Employment Appeal Tribunal — The respondent’s appeal was allowed on the effect of the successful contractual appeal. The appellant’s cross-appeal was dismissed as otiose.
• Employment Tribunal — The tribunal held that the appellant had been dismissed by 17 July 2014, found unfair dismissal, and made a compensation award subject to deductions and an uplift.