Kelly v PGA European Tour

The Court of Appeal considered the proper approach to orders for re-engagement under the Employment Rights Act 1996, particularly sections 115–116. It held that an employment tribunal must consider whether it is practicable for the particular employer to comply with an order for re-engagement by testing whether the employer genuinely and rationally believes the dismissed employee lacks the required capability or that a breakdown in trust and confidence (including because of misconduct) makes re-engagement impracticable.

The court endorsed the principle from United Lincolnshire NHS Foundation Trust v Farren that practicability is to be judged from the employer's perspective, tested for genuineness and rational basis. The tribunal must take into account relevant factual findings made at the liability hearing and cannot ignore findings that the employer genuinely held such beliefs. The tribunal was also wrong to order re-engagement where the claimant plainly did not meet an essential requirement of the post (ability to speak, read and write Mandarin) and where there were no other practicable comparable roles available at the remedies hearing.

This appeal arose from a claim by Scott Kelly that he had been unfairly dismissed and discriminated against on grounds of age by the PGA European Tour. The respondent conceded unfair dismissal for procedural reasons but denied age discrimination. The employment tribunal dismissed the age discrimination complaint but, in remedies, ordered re-engagement of the claimant as Commercial Director, China. The respondent appealed the remedies order to the Employment Appeal Tribunal (EAT), which allowed the appeal and set aside the re-engagement order. The claimant appealed to the Court of Appeal.

Nature of the claim/application:

• The claimant sought reinstatement or re-engagement following admitted unfair dismissal and pursued an age discrimination claim; remedies sought included re-engagement in comparable or suitable employment.

Procedural posture:

• Liability and remedies were heard by the employment tribunal. The EAT (HHJ Auerbach) allowed the respondent's appeal against re-engagement. The matter proceeded to the Court of Appeal on multiple grounds.

Issues framed by the court:

• How section 116 of the Employment Rights Act 1996 is to be interpreted in relation to re-engagement and filled vacancies;
• whether an employment tribunal must defer to findings made at liability when assessing practicability of re-engagement;
• whether an employer's genuine and rational belief about capability or trust and confidence can make re-engagement impracticable;
• whether the tribunal erred in ordering re-engagement where the claimant lacked an essential job requirement (Mandarin language skills);
• whether the EAT should have remitted the remedy issues to the tribunal or substituted its own decision; and
• whether the tribunal should assess a Polkey reduction to compensation.

Court’s reasoning and conclusions (concise):

• The Court held that when considering re-engagement a tribunal must assess practicability from the particular employer's perspective and test whether the employer genuinely and rationally believed the employee lacked capability or that trust and confidence had irretrievably broken down. This approach follows and applies the principles in Farren and earlier authorities (eg Wood Group v Crossan).
• The employment tribunal had erred by effectively substituting its own view for the employer's and by failing to give effect to relevant findings made at liability that Mr Pelley had formed a genuine and rational view that the claimant lacked the capability required for senior roles.
• The tribunal was wrong to order re-engagement as Commercial Director, China because the claimant did not meet an essential requirement of the post (Mandarin language skills) and there were no other practicable comparable roles available at the remedies hearing. Consequently, the EAT was entitled to set aside the re-engagement order and decline to remit that issue.
• The EAT was also right to remit the Polkey issue (likelihood of fair dismissal in any event) to the employment tribunal for assessment when quantifying compensation.

Appeal dismissed. The Court of Appeal agreed with the EAT that (1) practicability of re-engagement must be assessed from the employer’s perspective and the employer’s genuinely held and rational beliefs about capability or trust and confidence are decisive if established; (2) a tribunal must take into account relevant factual findings made at the liability hearing and cannot substitute its own view; (3) the employment tribunal erred in ordering re-engagement to a role for which the claimant plainly did not meet an essential requirement (Mandarin), so re-engagement was not practicable; and (4) the Polkey issue should be remitted to the employment tribunal to assess any reduction in compensation.