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Unfair Dismissal Remedies - Where Re-engagement is Impracticable

The Employment Appeal Tribunal (“EAT”) recently addressed whether re-engagement of an employee following an unfair dismissal was appropriate in the case of Kelly v PGA European Tour.

The Claimant was employed as a Group Marketing Director and he was dismissed shortly after a new Chief Executive was appointed due to permanence issues and his willingness to "buy in" to the Chief Executive’s ideas. Before he was dismissed, the Claimant covertly recorded two meetings during which his employer tried to resolve the matter informally.

At the first instance tribunal his employer conceded that a fair procedure was not followed prior to dismissing the Claimant and that the dismissal was, therefore, unfair. The Claimant subsequently brought a Tribunal claim based on the lack of procedure.

As the dismissal was unfair, the tribunal considered the appropriate remedy and held that re-engagement was practicable and the Claimant should be re-engaged as a commercial director in China even though the Claimant could not speak Mandarin and this was an essential requirement for the role.

In reaching this decision the Tribunal found that any trust and confidence issues relating to the covert recordings were not so significant as to make re-engagement impracticable and that his willingness to learn Mandarin and his proficiency in languages meant that re-engagement was practicable.

Following the Tribunal’s decision the employer appealed to the EAT on the basis that the Tribunal had considered for itself whether trust and confidence had been damaged instead of asking whether the employer had a rational basis for believing that it had. The EAT found that it was the employer’s view of trust and confidence that was key and this view should only be tested by the Tribunal as to its genuineness and rationality. It also found that the Tribunal had failed to give sufficient weight to the employer’s commercial judgment and requirements for the role, particularly in relation to the Claimant learning Mandarin.

What this Means for Employers?

This case acts as a reminder that employers should follow a fair procedure when dismissing an employee to avoid claims of unfair dismissal. Further, whilst the most common remedy for unfair dismissal is compensation, this case shows that the Tribunal will be willing to order reinstatement and re-engagement where practicable although these awards are very rare. As a result, employers should keep in mind that even where they argue a relationship breakdown has occurred this may not be taken at face value by a Tribunal. As such, it would be advisable for employers to keep written evidence to demonstrate the reasons for their concerns to evidence that any assertion is genuine and rational.

This bulletin is for general guidance only and should not be used for any other purpose. It does not constitute, and should not be relied upon as legal advice.

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