Did lack of fair procedure make dismissal unfair?


16th April 2024

Establishing whether a dismissal is fair or unfair turns on two key questions: (1) whether the employer had a fair reason for dismissal; and (2) whether the employer followed a fair procedure.

In considering whether an employer has followed a fair procedure, it has been well established that an employer cannot invoke a “no difference rule”. In other words, an employer cannot normally argue as a defence that following a fair procedure would have made no difference to the resulting dismissal (albeit this may be relevant on principles of compensation).

However, the case of Matthews v CGI IT UK Ltd [2024] EAT 38 provides a rare instance where an employer was able to reasonably carry out a fair dismissal without following the usual procedures.

Background

Mr Matthews was employed as a Director/Consulting Expert on 5G technology by CGI IT UK Ltd. Mr Matthews worked from home during the COVID-19 lockdown and was signed off sick from May 2020 with COVID-19 symptoms. Around this time, CGI discontinued work on 5G technology and commenced a redundancy process. Mr Matthews was advised that he was at risk of redundancy but declined to attend any consultation meetings as he was unwell.

Mr Matthews raised a grievance following a colleague being dismissed for redundancy. As part of this grievance, Mr Matthews claimed that his manager, Mr Evans, had undermined and scapegoated him. After an appeal, the grievance was upheld in part but not the complaint about Mr Evans. Following this decision, Mr Matthews then wrote a letter accusing the appeal chair of incompetence and lying, stating that he intended to raise further grievances and take the matter to the Employment Tribunal and CGI’s internal ethics team. CGI initially attempted to restart the redundancy process but ultimately abandoned it.

In November 2020, Mr Matthews began a phased return to work following a period of prolonged sickness. He was given a number of options, including remaining in his existing team under Mr Evans or trying to find an equivalent role in a different team. Mr Matthews did not agree to these and attempted to set various conditions if he were to return to Mr Evans’ team.

A new role was created for Mr Matthews in a different team. However, he refused to decide whether he would stay in his current role or move to the new team. Instead, he alleged that he had been harassed whilst on sick leave and said that he planned to bring four further grievances. Mr Matthews continually refused to give a decision within the time frame given, stating the ultimatum had made his position untenable.

The President of CGI Operations concluded that moving to the new role was the only viable option, which was communicated to Mr Matthews. He stated this was a demotion and would be constructive dismissal. A few days later, the President of CGI concluded that the relationship with Mr Matthews had irretrievably broken down and the only remaining option was termination. Mr Matthews was paid in lieu of notice and no right of appeal was offered.

The Employment Tribunal

Mr Matthews brought Employment Tribunal proceedings alleging unfair dismissal, automatic unfair dismissal and detriment for making a protected disclosure, victimisation and failure to make reasonable adjustments.

The Employment Tribunal held that the real and sole reason for the dismissal was that CGI concluded that the relationship between them had broken down irretrievably, and that this was a reasonable belief. CGI had genuinely and persistently tried to find a solution, including creating a role specifically for Mr Matthews. However, Mr Matthews turned down all options, leaving no viable alternative to dismissal.

Issuing a warning would have “most likely” led to a further escalation of the situation and would not have helped to repair the relationship. The Employment Tribunal did not accept that a warning would have made Mr Matthews change his stance. Although mediation could have been an option at an earlier stage of the return to work process, it was reasonable for CGI not to explore this as an alternative to dismissal due to Mr Matthew’s animosity towards Mr Evans. Furthermore, as the dismissal decision was made by the President of CGI, the most senior manager to Mr Matthews, it was found to be unlikely that an appeal would have aided in mending the relationship.

The Employment Tribunal found this to be one of the rare cases where a decision to dismiss without a prior warning and without offering the claimant the opportunity to appeal was within the range of reasonable responses. The claim of unfair dismissal, and all other claims, were accordingly dismissed.

The Employment Appeal Tribunal

Mr Matthews appealed on several grounds, but primarily challenging the decision that the dismissal was not unfair.

Mr Matthews alleged that the Employment Tribunal had made an error of law by speculating on what was likely to have happened should a warning or appeal have been given to him. The EAT held that the Employment Tribunal did not fall into the trap of retrospectively assessing the likelihood of a warning or an appeal making a difference to the outcome and in the context of the whole judgment, this was the “rare case” where following a procedure would be “futile”.

Mr Matthews also argued that it was implicit in the Employment Tribunal’s findings that the status of the person making the decision to dismiss is relevant to the question of whether dispensing with the right of appeal is fair or reasonable, which could not be right. The EAT rejected this argument as the Employment Tribunal was simply stating a fact that the decision had been made by the most senior line manager, indicating the seriousness with which the decision to dismiss was considered.

The EAT also held that CGI had made significant and genuine efforts to retain Mr Matthews indicating that dispensing the right to appeal was reasonable in the circumstances. Following Turner v Vestric EAT 2017, it was held that an employer does not have to take “all reasonable steps” prior to dismissal in these circumstances, but they would be expected to do more to fix the relationship where they are to blame. The EAT held that CGI had been genuine in their efforts to restore the relationship with Mr Matthews.

What does Matthews mean for employers?

This is not the first case of its kind, but it illustrates once again that an employer can carry out a fair dismissal without following their usual procedures in rare circumstances.

In the similar case of Gallacher v Abellio Scotrail EAT 2020, it was accepted by the Employment Tribunal that any attempt to follow a procedure would have been futile and would have had no impact on the decision to dismiss. That case similarly reflected a situation where the employer went to lengths to accommodate the employee, and again was stressed to be an “unusual and rare case”.

Employers need to act with care. It will only be in exceptional circumstances and based on the specific facts of the case where a lack of formal procedure does not render a subsequent dismissal unfair. The judgments in this area will not assist an employer who wants to dismiss an employee where, for example, there has been a falling out but the employer has not taken any steps to rectify the relationship.

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