Do you have to tell an employee the real reason for dismissing them?

The recent case of Rawlinson v Brightside Group Ltd held that, where an employer tells an employee a reason for dismissal, it should not mislead the employee about the reason. An employer is not necessarily under an obligation to volunteer information, but where a choice has been made to give information, the employee should not be misled.

Background

The employee was employed as Group Legal Counsel for the employer, an insurance broking business. The employer decided to dismiss the employee due to concerns about his performance. The employer wanted the employee to work through his notice period to ensure an effective handover so, to ‘soften the blow’, the employer did not tell the employee the real reason for its decision. Instead, the employer told him that there was to be a re-organisation of his work. The employee said that if the employer was going to outsource legal services, then he would be covered by TUPE. The employer would not give him any details about an outsourcing. The employee resigned in response to the employer’s conduct and refused to work his notice period.

It was only after his employment terminated that the employee began to learn, through a subject access request, of the real reason for the termination of employment.

Decision

The Employment Appeal Tribunal (“EAT”) said that implied into the employee’s contract of employment was a term which required the employer to conduct itself in a manner that would damage the relationship of trust and confidence that is necessary between employer and employee. This is known as the implied term of trust and confidence. Where an employer breaches this implied term, an employee can claim that they have been constructively dismissed and thus complain unfair or wrongful dismissal.

The EAT decided that, in all but the most unusual cases, the implied term imports an obligation not to deliberately mislead. The EAT said that by deciding to give the employee a reason for the termination of his employment, the employer had assumed an obligation not to mislead – an obligation it then breached.

The EAT found in the employee’s favour, and directed the parties to agree an award that should be made to the employee.

Comment

Where an employer tells an employee the reason that they are being dismissed, the real reason should be given. If the employer gives an untrue reason, even if just to soften the blow, it arguably has misled the employee and breached the implied term of trust and confidence.

Employers should be mindful that a ‘real reason’ for dismissal is likely to become apparent if the employee makes a subject access request, as the employee did in the case here.