North West Anglia NHS Foundation Trust v Gregg

An employer may not withhold salary during an interim, non-terminatory regulatory suspension unless the employment contract, an implied term, or established custom permits it. Contractual analysis comes first. In the ordinary case, a practitioner whose registration is temporarily suspended by an independent tribunal while allegations remain disputed is not thereby voluntarily unable, or not ready and willing, to work.

The implied term of mutual trust and confidence is not a general duty to act fairly. It is breached only where conduct is calculated or likely seriously to damage the relationship and lacks reasonable and proper cause. An employer will not usually have to postpone its internal disciplinary process pending a criminal investigation unless there is a real, rather than notional, danger of injustice in the criminal proceedings.

The Trust employed Dr Gregg as a consultant anaesthetist. Following concerns about patient deaths, it excluded him on full pay and began an internal disciplinary investigation. An Interim Orders Tribunal later suspended his medical registration and licence on an interim basis. The Trust ended its own exclusion, stopped his salary, proposed a hearing about termination for failure to maintain registration, and continued its disciplinary process while police investigations remained ongoing.

The High Court held that these steps breached contract and granted an injunction restraining the disciplinary process pending a charging decision: [2018] EWHC 390 (QB). The Trust appealed. The central questions were entitlement to pay during the interim regulatory suspension, the proposed alternative termination hearing, and whether continuing internal proceedings breached the implied term of trust and confidence.

1. Appeal allowed in part. The court upheld the conclusion that the Trust could not deduct salary during Dr Gregg’s interim, non-terminatory suspension. Clause 12 prohibited deductions or variations to salary. No other express term permitted the deduction, and no term could be implied consistently with that clause. There was no relevant custom or practice. Although MHPS paragraph 25 did not directly apply once the Trust’s exclusion had ended, its usual-full-pay provision, and the Trust’s disciplinary policy, supported that construction.

2. The contractual inquiry takes priority over general doctrines of co-dependency and readiness, willingness and ability to work. A regulatory interim suspension is a protective and temporary measure, not a disciplinary sanction. In the ordinary case, a practitioner who disputes the allegations and is prevented from working by such a third-party order remains ready and willing to work. Exceptional circumstances, such as a complete or partial admission, might justify a different conclusion.

3. The Trust was entitled to invite Dr Gregg to a hearing about the separate contractual ground of failure to maintain registration. Schedule 19 stated alternative grounds for termination. Pursuing misconduct first did not amount to an election that prevented reliance on another ground. Holding a hearing was not unfair and could not itself breach the implied term of trust and confidence. The legality of any future termination based on the temporary loss of registration was hypothetical and was not determined. The court nevertheless warned that such termination would be far from straightforward.

4. The High Court applied the wrong test in holding that continuing the internal disciplinary process breached the implied term. The term requires conduct calculated or likely seriously to damage trust and confidence, without reasonable and proper cause; it does not impose a free-standing obligation of fairness. There was no real evidence that the process would prejudice the criminal investigation or create a real danger of miscarriage of justice. The fact that Dr Gregg had privileged legal advice not to participate was relevant but could not be decisive.

5. The Trust had reasonable and proper cause to operate the contractual disciplinary process. It was not required to await a separate police investigation over which it had no control. The injunction was therefore wrongly granted. Grounds 1–4 succeeded, paragraph 1 and paragraph 4 of the High Court order were rescinded, and Ground 5 failed.

• Court of Appeal (Civil Division): Allowed the Trust’s appeal on the injunction and proposed termination hearing, but dismissed its appeal on salary entitlement: [2019] EWCA Civ 387.
• High Court (Queen’s Bench Division): Held that the Trust would breach contract by withholding pay, pursuing the proposed termination hearing, and continuing its disciplinary process before the police investigation concluded; granted an injunction: [2018] EWHC 390 (QB).