Avsar v Wilson James Ltd

When an employer’s conduct is alleged to breach the implied term of mutual trust and confidence, the question is whether it was undertaken without reasonable and proper cause. That differs from the rationality test applicable to an exercise of contractual discretion.

Suspension is not inherently a neutral act. It may breach the implied term unless there is reasonable and proper cause. Where the stated concerns are materially connected with an employee’s trade union activities or protected complaints, there may be a serious issue to be tried. Interim relief may restrain an unlawful process without preventing a lawful probation review.

The claimant, a security guard employed by the defendant, sought an urgent interim injunction requiring the defendant to lift his suspension and refrain from pursuing a probationary or disciplinary process. The defendant’s concerns related to the claimant’s previous campaigning against outsourcing, his trade union activities and views about outsourcing.

Her Honour Judge Baucher refused the injunction at the Central London County Court on 24 November 2020. The claimant sought permission to appeal, arguing that the lower court had applied the wrong test to the implied term of trust and confidence, had wrongly assessed the adequacy of damages, and had misapplied the balance of convenience.

1. Permission and disposal. Permission to appeal was granted on Grounds 1 and 3. The judge would have upheld the appeal on those grounds. Permission on Ground 2 was refused, so the appeal was dismissed.
2. Applicable interim-relief test. The court applied the three-stage approach in American Cyanamid Co v Ethicon Ltd [1975] AC 396: serious issue to be tried, adequacy of damages, and, if necessary, the balance of convenience. The permission question was whether the appeal had a real prospect of success or another compelling reason for it to be heard under CPR 52.6.
3. Trust and confidence. The lower court had asked whether the suspension was irrational. That was the wrong question. The claim concerned conduct said to breach the implied term that an employer must not, without reasonable and proper cause, conduct itself in a manner calculated or likely seriously to damage the relationship of trust and confidence. The rationality test applies where an employer exercises an express or implied contractual discretion; it does not replace the Malik test for alleged harmful conduct.
4. Suspension is capable of breaching the implied term because it changes the status quo from work to no work and casts a shadow over competence. The claimant therefore raised a serious issue as to whether his suspension and the proposed hearing were without reasonable and proper cause. The defendant’s letter expressly linked its concerns to his trade union activities and the union’s views about outsourcing. Although some conduct may be separable from trade union activity, the lower court had not explained how that separation could be made here.
5. Damages and balance of convenience. On the evidence before the lower court, damages could adequately address the short suspension and any quantifiable loss. The balance of convenience issue therefore did not arise decisively. Had damages been inadequate, an injunction preventing a hearing on the stated unlawful basis would not have cut across the contract; it would have required compliance with the implied term while leaving a lawful probation review available.

• High Court (Queen’s Bench Division): Permission to appeal was granted on Grounds 1 and 3 but refused on Ground 2. The appeal was therefore dismissed.
• Central London County Court: Her Honour Judge Baucher refused the claimant’s application for an interim injunction on 24 November 2020.