Royal Mail Group v Jhuti - Unfair dismissal: 'invented reason'

The Supreme Court has ruled that in situations where the real reason behind the decision to dismiss an employee is hidden from the decision-maker by an ‘invented reason’, it is the hidden, real reason that should be taken as the true reason for dismissal.

When a worker makes a protected disclosure, section 47B of the Employment Rights Act 1996 (ERA) states they cannot suffer a detriment as a result. Section 103A of the ERA also provides that a dismissal for making such a disclosure is automatically unfair.

In the case of Orr v Milton Keynes Council, the Court of Appeal held that a dismissal will not be unfair where the decision maker has unknowingly and innocently been misled by false evidence provided by a manipulator. Tribunals should, instead, look at the knowledge of the decision maker alone based on the information available to them at the time.

FACTS

In this case, the employee commenced work for Royal Mail on a six-month trial period. She later raised issues by email to her line manager, claiming that one of her colleagues had breached Royal Mail rules, and OFCOM guidance, by offering incentives to customers. A meeting was held with her team leader, who encouraged her to withdraw the allegations, via email, on the grounds that she misunderstood the rules. He also stated, for the first time, that he had issues with her performance.

The claimant complied with his request, however she was later placed on improvement targets by her team leader. This included her attending weekly meetings and being given an ‘ever changing, unattainable list of requirements’. Believing this was due to her previous allegations, the claimant reported this behaviour to Royal Mail’s HR department. Although she was provided a new team leader, no further action was taken by HR and she took time away for work-related stress.

In her absence, the organisation’s Head of Sales Operations (HSO) considered whether the claimant’s performance issues meant that her employment should be terminated. In forming her decision, the HSO referred to previous emails between the claimant and her original line manager that did not contain any reference to the allegations. When told by the claimant via email that she was being ‘sacked for telling the truth’, the HSO liaised with the team leader in question. He affirmed that the allegations had been based on a misunderstanding and supplied the withdrawal email to prove this.

The claimant was dismissed for unsatisfactory performance and her appeal was rejected. She later brought a claim to the employment tribunal (ET) for automatic unfair dismissal on the grounds she had made a protected disclosure.

ET AND EAT

The tribunal found that the claimant had made protected disclosures, and been subjected to a detriment as a result. However, she had not been automatically unfairly dismissed as the HSO had genuinely believed she was a poor performer. The decision had been made based on the information available at the time and, specifically, was not a result of the protected disclosures.

On appeal, the Employment Appeal Tribunal (EAT) disagreed. They found that, as a matter of law, an organisation is responsible for the decision made without the true facts where these have been manipulated by a manager responsible for the employee concerned who is aware of these facts. The mind of both the decision maker and the reason and motivation of the claimant’s line manager had to be taken in to account.

COURT OF APPEAL

The Court of Appeal allowed an appeal by Royal Mail. They explained that unfair or even unlawful conduct from colleagues or managers is immaterial unless it can be properly attributed to the organisation. Tribunals should therefore focus on the mental processes of the person, or persons, who made the decision to dismiss. Although they did agree that this would be different where the manipulator was someone with formal responsibility over the procedure, in this case all the line manager had done was supply documents and respond to a query.

SUPREME COURT

The Supreme Court reversed this decision. They explained that, when faced with unfair dismissal claims, courts need to work to establish the real reason behind a dismissal. In searching for this reason, it is usually enough to assess the explanation given by the decision maker. However, if the real reason is actually hidden behind one that is ‘invented’, courts need to look beyond this invention rather than allow it to infect its own determination. If this invented reason has come from an individual who has been placed in a position of seniority above the claimant, as was the situation here, this individual’s state of mind can be attributed to the organisation.

Note for employers

The facts in this case are extreme. It is rare that a decision-maker’s decision, genuinely made in good faith, will be tainted by the deliberate actions of a third-party with seniority above a claimant to hide the true reason for a dismissal. This ruling will also not apply in situations where it is a colleague at the same level, or lower than the claimant, manipulating the decision. Here, it was clear that the claimant’s former team leader wanted to see her dismissed and took steps to make this happen.

That said, this ruling does provide a narrow qualification to the previous position established in Orr. If this situation arises, it will not be enough for the decision-maker to claim that they were not aware of the full facts, even if this was genuinely the case. To this end, organisations should make sure that all decisions to dismiss are based on accurate information, and provide employees with the chance to challenge all evidence and allegations. If there is reason to believe that there are underlying motives behind the allegations, further investigations should be conducted.

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