In a significant decision, the Supreme Court has held in Royal Mail Group Ltd v Jhuti that in an unfair dismissal claim, where the real reason for dismissal is hidden behind an invented reason that the decision-maker adopts, the hidden reason can be deemed to be the reason for dismissal.
Background: automatic unfair dismissal
Under s103A of the Employment Rights Act 1996, a dismissal will automatically be unfair if the reason (or the principal reason) for the dismissal is that the employee made a protected disclosure.
Royal Mail employed Ms Jhuti as a media specialist from September 2013 to October 2014. Early on in her employment Ms Jhuti informed her line manager (Mr Widmer) that she suspected one of her colleagues had breached Royal Mail rules and the requirements of their regulator, Ofcom. Mr Widmer questioned Ms Jhuti’s understanding of the rules, observed that she was still on trial at Royal Mail, and advised her to retract her allegations, which she did, fearing for her job.
Subsequently, Mr Widmer started to claim that Ms Jhuti’s performance was not up to standard and set up intensive weekly performance review meetings with Ms Jhuti. Ms Jhuti eventually went on sick leave and raised a grievance.
Royal Mail appointed Ms Vickers, who had had no previous dealings with Ms Jhuti, to advise the company on whether it should terminate Ms Jhuti’s employment. By this stage, Ms Jhuti was in no fit state to engage effectively with the process. Ms Wickers therefore asked Mr Widmer about the matter. In response, Mr Widmer told Ms Vickers in the briefest of terms that Ms Jhuti had previously made an allegation of improper conduct but subsequently retracted her allegation as she had misunderstood the situation. Ms Vickers terminated Ms Jhuti’s employment based on poor performance.
Ms Jhuti lodged an appeal, which was rejected. She then complained to an employment tribunal that she had been automatically unfairly dismissed as a result of making a protected disclosure.
Employment Tribunal decision and appeals
The employment tribunal found that Ms Jhuti had not been automatically unfairly dismissed. It held that Ms Jhuti’s disclosures had played no part in the reasoning of Ms Vickers. Ms Vickers had genuinely believed that Ms Jhuti’s performance had been inadequate and she had dismissed her for that reason.
The EAT disagreed. It held that if someone in a managerial position, responsible for the employee, had manipulated a decision to dismiss and the decision-maker had dismissed without knowing of the manipulation, the manipulator’s reason for the dismissal could be attributed to the employer.
The Court of Appeal overturned the EAT’s decision. It held that the Court was obliged to consider only the thought process of Ms Vickers. You can read more about the Court of Appeal’s decision here.
Decision: Supreme Court
The Supreme Court overturned the Court of Appeal’s decision and held that Ms Jhuti had been automatically unfairly dismissed. It held that 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.
The Court found that in enacting section 103A, Parliament clearly intended to provide that, where the real reason for dismissal was that the employee had made a protected disclosure, the automatic consequence should be a finding of unfair dismissal.
The Court confirmed that generally courts need look no further than at the reasons for dismissal given by the appointed decision-maker. Unlike with Ms Jhuti, most employees will contribute to the decision-maker’s inquiry and the decision-maker will generally address all different versions of what has prompted the employer to seek to dismiss the employee. However, if there is a hidden reason for the dismissal, it is the courts’ duty to look through the invented reason, rather than to allow the invented reason to taint the court’s own determination. Provided the hidden reason belongs to a person placed by the employer in hierarchy of responsibility above the employee, there is no conceptual difficulty about attributing to the employer that person’s state of mind rather than that of the deceived decision-maker. The hidden reason for a dismissal would not therefore be attributed to the employer if it belonged to someone of equal seniority or less senior than the employee.
The Supreme Court indicated that the statutory provisions for claims of unfair dismissal must be construed in a broad and reasonable way so that legal technicalities do not override industrial realities and common sense. This approach is evident in the Court’s decision that Ms Jhuti was in fact unfairly dismissed even though her line manager – who clearly wanted her dismissed – was not ultimately the decision-maker in her dismissal.
The Supreme Court made clear that the facts of this case are “extreme”. In practice, instances of decisions to dismiss where the employee’s line manager has dishonestly constructed the reason (which is then adopted by the decision-maker) will be uncommon. Usually, the position will remain that when considering the reason for a dismissal, the focus must be on the state of mind of the decision-maker.
Although in most dismissal cases there is unlikely to be the level of manipulation as seen in Jhuti, this case re-affirms the importance of being able to establish a valid reason for dismissal. In practice this may mean, for instance, carrying out further investigation into the matter. Indeed, it is interesting to note the Court’s observation in Jhuti that Ms Vickers was instructed to review the evidence, rather than to investigate matters for herself. In any disciplinary process employees should, of course, be given the opportunity to state their case in respect of the allegations against them. In doing so, decision-makers should be able to satisfy themselves that the circumstances justify the dismissal.