Successful appeals and the curious case of the vanishing dismissal

When an employer upholds an appeal against dismissal, what exactly does that mean? In a recent case, the Employment Appeal Tribunal gave further…

When an employer upholds an appeal against dismissal, what exactly does that mean? In the case of Thomson v Barnet Primary Care Trust, the Employment Appeal Tribunal gave further guidance on claims of constructive unfair dismissal where there had been a “vanishing dismissal”.

The facts

The facts of the case are fairly straightforward: Ms Thomson was a district nurse who was dismissed for capability reasons following a period of sick leave and a lengthy capability process. Ms Thomson appealed against this finding and was ultimately reinstated, with the Trust finding that that there had been serious procedural failures with the capability process, but stating that they had legitimate concerns around Ms Thomson’s performance.

The Trust expected Ms Thomson to return to work and agreed to pay her all unpaid back pay for the period she was dismissed, but the key factor in this case was that the Trust also wanted Ms Thomson to accept a series of conditions before she would be allowed to return. These conditions were fairly onerous and included a full assessment of her competency, a lengthy mentoring programme and a final written warning that would remain active on Ms Thomson’s personnel file for three years.

Ms Thomson rejected these conditions and resigned, claiming constructive unfair dismissal.

Decision

The employer tried to argue that the imposition of these conditions constituted a new offer of employment and that by accepting the reinstatement and back pay Ms Thomson had waived any earlier breaches of her contract that may have arisen as a result of the original flawed dismissal. This argument was successful in the Tribunal but was given fairly short shrift by the Employment Appeal Tribunal, which reinforced the long-standing position whereby a reinstatement acted to resurrect the original contract of employment. This is usually referred to as the “vanishing dismissal” as the original dismissal automatically ceases to exist and the employee retains their continuity of service.

On this basis, the EAT found that for her claim of constructive dismissal Ms Thomson could rely on any potential misconduct committed by the employer prior to her dismissal. In this way, Ms Thomson could rely on a course of conduct that included the initial procedural flaws in the capability procedure, as well as the onerous conditions applied on her return to work. Importantly, the EAT also found that there was no acceptance or waiver of these breaches by Ms Thomson and that she resigned as a result of the whole course of conduct.

It was therefore found that there had been a constructive dismissal and the case was remitted to a Tribunal to consider fairness.

Comment

This case has a fairly unusual set of facts but it raises interesting issues for employers. Ordinarily, overturning a dismissal following an appeal process will resurrect the original contract of employment, causing the dismissal to vanish, and will prevent an employee from making any sort of unfair dismissal claim. This can be a useful tool for you in dealing with potentially-litigious dismissed employees if it is felt that the disciplinary process was a little shaky.

However, you should be aware that a reinstatement will not rectify any previous breaches of contract and an employee can rely on incidents prior to their reinstatement in a subsequent claim for constructive unfair dismissal. On the face of it, this seems to pose problems for employers, as any mistakes made during a disciplinary process, even those corrected on appeal, could come back to haunt you later if the reinstated employee decides to resign.

Our advice would always be, therefore, that you should endeavour to make sure that any disciplinary process is entirely compliant with your own policies and with the ACAS guidelines.

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