Dismissal without following any procedure found to be fair
Steven Harte, Associate discusses an interesting decision of the Employment Appeal Tribunal in the case of Gallacher v Abellio Scotrail Limited.
The Scottish Employment Appeal Tribunal (EAT) has upheld the decision of an employment tribunal, that the dismissal of an employee, Ms Gallacher, without following any procedure, nor offering an appeal, was a fair dismissal.
At first glance, this appears to be a very surprising decision. However, once one delves deeper into the circumstances which led to the dismissal, it is easier to understand the employment tribunal’s decision and why it was upheld by the EAT.
Ms Gallacher was a senior employee in Abellio’s Customer Experience Directorate. Her relationship with her manager deteriorated significantly and, eventually, her manager concluded that trust and confidence between them was lost. The loss of trust and confidence was a two-way thing. In addition to the manager losing trust in her, Ms Gallacher’s trust in her manager had also broken down; that was clear. In the course of Ms Gallacher’s appraisal meeting, she was dismissed without any prior warning and was not afforded the right to appeal. Despite this, the dismissal was found to be fair.
The first point of note is that this was not a conduct or performance management issue. Had it been so, the dismissal would almost certainly have been unfair. The reason for dismissal was a breakdown in trust and confidence which fell under the banner of an SOSR dismissal (Some Other Substantial Reason, one of the potentially fair reasons for dismissal). It is also noteworthy that this case involved a breakdown in relations between two senior managers. Had Ms Gallacher been more junior, the decision would likely have been different.
The tribunal found that Ms Gallacher’s continued good working relationship with her manager was critical for Abellio during a difficult period when it was in a loss-making position. Ms Gallacher had been trying to secure alternative employment within Abellio, but no such alternative existed. In addition, the evidence was that Ms Gallacher recognised the breakdown in relations and was not inclined to retrieve the situation. In light of all of this, the tribunal found that any procedure at this time would have served no purpose and in fact would have worsened the situation.
The EAT rightly pointed out that following no procedure prior to dismissal would in many cases give rise to the conclusion that the dismissal was outside the band of reasonable responses and unfair. It went on to say that such procedures, including giving the employee an opportunity to make representations before dismissal and to appeal against any dismissal, are fundamental to notions of natural justice and fairness and it would be an unusual and rare case where an employer would be acting within the band of reasonable responses in dispensing with such procedures altogether. However, given the tribunal’s findings that any procedure would have served no purpose and would in fact have worsened the situation, the EAT concluded that it was open to the tribunal to find that dispensing with procedure was within the band of reasonable responses open to Abellio.
Whilst this case may tempt some employers to by-pass formal procedures when seeking to dismiss a senior member of staff, extreme caution is highly recommended. Parting company with a senior manager is often disruptive to the business and, in some cases, it might be attractive to circumvent the normal process. However, simply doing away with any procedure, whether that be a disciplinary, performance management, or capability procedure is a high risk strategy.
There are alternatives to consider. For example, a without prejudice/protected conversation with a view to agreeing an exit package, tied into a settlement agreement is usually a safer, more effective option. The nature and timing of such conversations can be vital to a satisfactory and quick conclusion. As such, we recommend that legal advice is taken at an early stage when dealing with senior management exits with a view to minimising not only disruption to your business, but also financial and reputational exposure.