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Farrer & Co | Royal Mail Group Ltd v Jhuti - secrets and inventions: what's the real reason for dismissal?

Happy new year. What better way to see in the new decade than by reading our latest WorkLife blog! I doubt it will tick off any of the resolutions on readers’ lists but will still hopefully be of interest.

Just before Christmas, the Supreme Court ruled on a significant employment question: in a claim for unfair dismissal can the real reason for the dismissal be different from the reason relied upon and given to the employee by the decision-maker?

In short, the Supreme Court in Royal Mail Group Ltd v Jhuti concluded:

Yes, if a person in the hierarchy of responsibility above the employee determines that she (or he) should be dismissed for a reason but hides it behind an invented reason which the decision-maker adopts, the reason for the dismissal is the hidden reason rather than the invented reason.

Facts

Ms Jhuti joined Royal Mail as an employee in 2013, initially on a 6-month trial period within its marketing unit. Soon after starting, she began to suspect that members of her team were violating regulatory guidance - as well as company policy - brought in as a result of the company’s dominant position in the market. She informed her manager of her suspicions in several emails. The response was a meeting with her manager, of no less than 4 hours, where she was convinced to drop her allegations and apologise. She subsequently received what the Tribunal found was a thorough dressing-down by her manager in which, for the first time, concerns about her own performance were raised and new targets were provided for her to meet. Intensive weekly meetings were also introduced. Towards the end of her extended trial period, Ms Jhuti was signed off work for work-related stress, anxiety and depression and never returned to work.

After failed attempts to resolve the situation and reach a settlement, the company tasked a manager with no prior knowledge of the situation, Ms Vickers, to decide whether Ms Jhuti’s employment should be terminated, by way of a review of the evidence. In the course of her review, Ms Vickers was supplied with an incomplete collection of correspondence (which omitted the emails sent by Ms Jhuti to her manager and HR concerning her allegations of regulatory breaches and treatment as a result of them) and was unable to meet with Ms Jhuti due to the latter’s ongoing ill-health. When Ms Jhuti referred to being ‘sacked for telling the truth’ via an email to Ms Vickers, this was played down by Ms Jhuti’s manager as a misunderstanding on her part. As a result, Ms Vickers, in good faith, communicated her decision to dismiss Ms Jhuti from her employment with notice, due to her failure to meet the required standards of performance.

Relevant law

One of Ms Jhuti’s complaints (and the one the Supreme Court focused on) was that her dismissal was unfair because the reason for it was that she had made ‘protected disclosures’ (also known as whistleblowing) within section 43A of the Employment Rights Act 1996. Section 103A of the 1996 Act prescribes that a dismissal is automatically unfair if the principal reason for any dismissal is because an employee made a protected disclosure.

It’s here that we get to the crux of what the Supreme Court had to decide: was the real reason for Ms Jhuti’s dismissal the ‘hidden reason’ - the genuine making of a protected disclosure - or was it the ‘invented reason’ - the performance concerns, which the decision-maker (who was innocent of any improper motivation) had relied upon in good faith in coming to the decision to dismiss?

Judgment

The Supreme Court held that, in searching for the reason for a dismissal, generally courts need “look no further than at the reasons given by the appointed decision-maker”. However, in cases where the real reason is concealed from the decision-maker and, for example, an invented reason is given to them which they then rely upon in their decision to dismiss, then it is “the court’s duty to penetrate through the invention rather than to allow it also to infect its own determination”.

What can we take from this?

The ability to look beyond the ostensible reason for dismissal represents a shift in how the reason for dismissal can be determined under the Employment Rights Act 1996. However, while potentially this could have a significant impact on the scope of Tribunals to scrutinise dismissal decisions, it is worth bearing in mind the relatively extreme facts of this case which are likely to limit its impact to fairly narrow circumstances.

That doesn’t mean, however, that there are not things that employers can take away from this case:

  • employers should ensure that decision-makers have all the relevant facts to hand (this might sound obvious, but clearly it didn’t happen in this case).

  • investigators and decision makers should be properly briefed on their roles, which, as the Supreme Court noted, should include a reminder to “address all rival versions of what has prompted the employer to seek to dismiss the employee”.

  • in cases where an employee is off sick, employers should consider alternative ways of allowing them to contribute to an investigation or disciplinary procedure, such as meeting them at an alternative venue or allowing them to participate in written questions and answers.

  • the Supreme Court noted in this case that the decision maker was tasked only with ‘reviewing’ the evidence. If a separate, independent investigation had been permitted into all the evidence, before matters proceeded to a disciplinary stage, then perhaps the five years of litigation and an appearance in the Supreme Court could have been avoided.

For more on whistleblowing and recent case law surrounding the issue, Rachel Lewis’ recent article can be found here.

If you require further information about anything covered in this blog, please contact David Hunt or Jamie Fryer or your usual contact at the firm on +44 (0)20 3375 7000.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, January 2020

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