Dismissal for loss of trust and confidence not unfair despite lack of appeal (Moore v Phoenix Product Development)

Procedural fairness in unfair dismissal claims does not always require the employer to offer an internal appeal against dismissal. In cases where the employer is dismissing because it has irretrievably lost trust and confidence in the employee, circumstances may in rare cases arise where an internal appeal would be futile and serve no purpose, with the result that the respondent will be acting reasonably in not providing one, the president of the Employment Appeal Tribunal (EAT) has confirmed.

Moore v Phoenix Product Development (UKEAT/0070/20/OO)

What are the practical implications of this judgment?

In unfair dismissal cases, whatever the reason for dismissal, it will usually be imperative for the employer to have followed some sort of procedure before the employee is dismissed. Often this is at core to satisfy the need to allow the employee to state their case in defence of themselves before the employer finalises its decision.

Cases where the dismissal is attributed to a breakdown in relations between the claimant and one or more key figures at the respondent will usually involve the respondent saying, in response to an unfair dismissal claim, that this breakdown in relations amounted to ‘some other substantial reason’, and hence was a potentially fair reason to dismiss.

In ‘some other substantial reason’ cases, the nature of the procedure that the employer will be obliged to undertake in order to be found to have behaved fairly will vary considerably, depending on the exact nature of the reason for dismissing.

Normally, after a dismissal, fairness will require that the employee is given the right to appeal internally, with any such appeal being heard, if possible, by a manager who was not involved at the dismissal stage.

It will be a rare case in which the respondent will be found to have acted procedurally fairly where it does not allow the possibility of an internal appeal against a decision to dismiss. However, the case law (going back to Polkey and beyond) has always contemplated that rare cases will occasionally crop up where procedural lacks such as this do not render the dismissal unfair.

This case is one such rare case. It perhaps has added weight given that the judgment is that of the current EAT President, Choudhury P.

It provides useful example facts of a situation in which, unusually, no internal appeal needed to be offered before dismissing because:

• the claimant was a board-level director and employee
• the respondent was a relatively small organisation with no higher level of management
• the tribunal had found that the claimant himself had brought about an ‘irreparable breakdown’ in trust and confidence (which was considered to be ‘destructive’, destabilising and a ‘drag-factor’ for the company)
• the claimant was unrepentant about his conduct and attitude and had not shown any sign that he was likely to change
• in the circumstances, the respondent was not the kind of organisation where the claimant’s shortcomings and the consequent threat to the respondent’s future could be addressed through some sort of retraining programme, or where different managers might be found to work with him more effectively (indeed an independent reviewer had found that the claimant would ‘sabotage any CEO coming into the business’)
• by the time of the decision to dismiss, the four other directors of the respondent (i.e., other than the claimant himself) had come to that view that they had lost trust and confidence in the claimant.

It is also notable that the President confirms that an appeal may be futile even in circumstances where (as here) the loss of trust and confidence only resides in the employer; it is not necessary for that loss of trust and confidence to be mutual, i.e., for the claimant also to have lost trust and confidence in the respondent employer.

Case details

• Court: Employment Appeal Tribunal
• Judge: Choudhury P
• Judgment published: 16 August 2021

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