J C Betancourt v United Kingdom Research and Innovation

An employer who dismisses an employee immediately and pays notice monies, without a contractual payment-in-lieu-of-notice clause, commits a wrongful dismissal. Damages nevertheless compensate only the loss caused by the breach.

Where the contract permitted termination on five weeks’ notice during probation, and the employment relationship had already become untenable to both parties, damages had to be assessed on the least burdensome lawful mode of performance. The employer would lawfully have given five weeks’ notice on the dismissal date. As the employee had received the equivalent pay, no compensation was due.

The claimant was employed subject to a contractual six-month probationary period and a contractual Probation Policy. The contract allowed either party to terminate on five weeks’ notice during probation. It contained a garden-leave clause but no payment-in-lieu-of-notice clause.

After disputes about working arrangements and concerns about conduct, the respondent decided that the working relationship should end. At a meeting on 15 March 2023 it dismissed the claimant immediately and paid five weeks’ notice monies. The Employment Tribunal held that the dismissal did not breach the probationary procedure and dismissed the wrongful-dismissal claim, despite finding that the contract did not permit payment in lieu.

The claimant appealed. The central issues were whether immediate dismissal was wrongful and, if so, whether damages extended beyond the five-week notice period.

1. Appeal allowed. The Employment Tribunal erred by holding that the claimant had not been wrongfully dismissed. The contract did not authorise immediate termination by payment in lieu of notice. Its garden-leave provision did not supply that missing contractual right.

2. The remedy for wrongful dismissal was damages assessed by asking when the respondent could lawfully have terminated the contract. The court applied the least-burdensome-performance principle explained in Mackenzie v AA Ltd [2022] EWCA Civ 901. The assessment assumes performance of the employer’s legal obligations, but no voluntary assumption of more onerous obligations.

3. The contractual probation provisions allowed either party to give five weeks’ notice during probation. The policy’s assessment process was directed to underperformance and could serve the purpose of allowing parties to decide whether the employment would work. It did not require the respondent to retain an employee for the entire six-month period where the relationship had become untenable and neither party wished it to continue.

4. Accordingly, the respondent would have lawfully dismissed the claimant by giving five weeks’ notice on 15 March 2023. Applying Jafri v Lincoln College [2014] EWCA Civ 449, that conclusion was the only permissible answer on the facts. The claimant had already received the salary payable for that period, so the wrongful dismissal produced no compensable loss. There was consequently no basis for an uplift under the ACAS Code.

5. The court did not decide whether, in a case where underperformance was the sole reason for termination, the contractual probation-assessment procedure would have to be completed and extend damages under Gunton v Richmond LBC [1980] I.C.R. 755.

• Employment Appeal Tribunal: Allowed the appeal from the Employment Tribunal to the extent that the claimant was wrongfully dismissed, but held that no damages or ACAS uplift were payable.
• Employment Tribunal: Employment Judge Manley dismissed the wrongful-dismissal claim in a judgment sent to the parties on 22 January 2024.