In Patel v Folkestone Nursing Home Ltd [2018] EWCA Civ 1689, the Court of Appeal ruled that where an employee successfully appeals against a dismissal, the employment relationship is revived and should be treated as having remained in existence throughout, even if the contract is silent on the point.
Facts
The claimant, Mr Patel, was employed by Folkestone Nursing Home Ltd (FNH) as a care assistant working in a nursing home. In March 2014 he was charged with two disciplinary offences said to amount to gross misconduct:
- He had been asleep while on duty.
- He had falsified records of certain residents at the care home by pre-recording that they had slept through the night. He had also failed to record the checks he had made in respect of them.
Mr Patel was invited to a disciplinary hearing. His defence to charge 1 was that he had been asleep during his break, not during his working hours. His defence to charge 2 was that this way of filling in the records was common in the nursing home and that records in this form in similar cases had been signed off by senior managers without criticism.
Following a disciplinary hearing, Mr Patel was dismissed for gross misconduct. FNH's letter stated that in relation to charge 2, it would refer Mr Patel's name to the relevant regulator, the Disclosure and Barring Service (DBS), because residents had been put at risk by his actions in failing to complete accurate records.
FNH's disciplinary policy gave employees the right to appeal against a disciplinary decision, however it did not set out what the consequences of a successful appeal would be.
Mr Patel appealed against his dismissal and attended an appeal hearing. Following the hearing, FNH informed him by letter that his appeal had been allowed.
However, the letter referred only to charge 1 and stated that the finding on appeal was that Mr Patel was asleep during an unpaid break and had therefore not breached any company rule or procedure. The letter went on to state that FNH would contact Mr Patel as soon as possible to arrange a return to work. The letter did not make any reference to charge 2, make any finding in relation to that allegation, or mention the referral of Mr Patel to the DBS.
Mr Patel was unhappy about the way in which the disciplinary and appeal procedure had been handled by FNH and considered that he did not receive satisfactory responses about these matters. He did not return to work, taking the view that he was not obliged to do so and could treat himself as having been dismissed.
He commenced proceedings in the employment tribunal (ET) for unfair dismissal, wrongful dismissal and wrongful deduction of holiday pay due to him.
Employment tribunal decision
In the ET, FNH argued that the successful appeal had overturned Mr Patel's dismissal, so that he had not been dismissed. The ET rejected this argument and held that FNH's contract terms governing the right of appeal were silent as to the consequences of a successful appeal and no relevant additional terms could be implied into the contract to say what the consequences should be. In particular, the ET held that the successful appeal by Mr Patel did not have the effect of reviving his contract of employment so as to prevent him from being able to claim that he was unfairly dismissed.
The ET went on to hold that if FNH was going to revoke Mr Patel's dismissal, the more serious allegation (charge 2) needed to be addressed so that he knew where he stood on it. The ET also held that there was no clarity as to the outcome of the appeal as regards charge 2, and as regards the basis on which Mr Patel was to return to work.
Employment Appeal Tribunal decision
FNH appealed against the ET's decision on the grounds that, following the EAT's earlier decision in Salmon v Castlebeck Care (Teesdale) Ltd [2015] ICR 735, there was no requirement for the appeals procedure to expressly give the right to reinstate or impose any particular sanction: it was implicit in the terms of the employment contract governing disciplinary appeals that a successful appeal against dismissal would overturn that dismissal and revive the employment contract. The EAT accepted this argument and allowed FNH's appeal.
Court of Appeal decision
Mr Patel then appealed to the Court of Appeal. It upheld the EAT's decision and dismissed the appeal.
The Court of Appeal held that it is clearly implicit in a term in an employment contract conferring a contractual right to appeal against disciplinary action in the form of dismissal that, if an appeal is lodged, pursued to its conclusion and is successful, the effect is that both employer and employee are bound to treat the employment relationship as having remained in existence throughout. Lord Justice Sales did not consider this to be a matter of implying terms, but simply the meaning to be given to the words of the relevant contract, reading them objectively.
Lord Justice Sales went on to hold that if a contractual appeal is brought against a dismissal for disciplinary reasons, a reasonable person would expect his full contractual rights to be restored without more as soon as he is notified that the appeal had been successful. He would not think that any further action was required by him, such as agreeing that this is the effect, as he has asked for that to happen by the act of appealing the decision. It follows that the effect of Mr Patel's successful appeal was that the employment relationship was revived, and therefore he was not dismissed so could not bring claims for unfair or wrongful dismissal.
However, Lord Justice Sales went on to consider FNH's "unsatisfactory" appeal outcome letter. In his view, it was strongly arguable that it was unacceptable, and a breach of the implied duty of trust and confidence, that FNH did not resolve the most serious of the allegations against Mr Patel and failed to withdraw any complaint it had made to the DBS and to inform him of that fact. Mr Patel had asked FNH to clarify the position, and it had failed to do so. Lord Justice Sales therefore considered whether this potential breach of contract might justify Mr Patel treating himself as having been constructively dismissed, and invited the parties to make written submissions on that point.
Comment
This case serves as a reminder that the effect of a successful appeal against a decision to dismiss is that the employment contract should be treated as having remained in existence throughout. The employee is therefore entitled to back-pay for the period from the date of dismissal to the date of the successful appeal and is entitled to return to the same role.
The case also highlights that a failure to follow a fair procedure in relation to a disciplinary appeal, or a failure to respond to all points raised in an appeal, could constitute a breach of the implied duty of trust and confidence and could justify an employee treating himself as constructively dismissed. When notifying an employee of the outcome of a disciplinary hearing or appeal, employers should ensure that they have adequately addressed all the charges.
