eSignature Legitimacy for Termination Letter in United Kingdom

How to eSign a document: eSignature legitimacy for Termination Letter in United Kingdom

in this video we'll look at the most common type of constructive dismissal claim that involving a breach of the implied term of trust and confidence i'll talk about the legal definition first and then i'll give you several examples of how it works in practice including dodgy disciplinaries and grievance processes making negative comments overstepping the managerial mark bonuses and pay rise and other examples you can use the chapter markings in the show notes to navigate around to bring a constructive dismissal claim in an employment tribunal an employee has to show they resigned because their employer breached their contract that can be a breach of an expressed term such as not paying salary but most commonly it's a breach of something called the implied term of trust and confidence no lawyer will admit that it's basically a requirement for the employer to act reasonably but that's pretty much what it is the supreme court set out the legal test for this kind of constructive dismissal in a case called malik and bank of credit and commerce international malik and bcci the employer must not without reasonable and proper cause conduct itself in a manner calculated and likely to destroy or seriously damage the relationship of trust and confidence between employer and employee there are two things at play here the employer's conduct and the potential reasonable and proper cause for that conduct malik and bcci suggests that the employer's conduct must be calculated to damage the relationship of trust and confidence and be likely to do so but case law has confirmed that the test is an either or test the employer's conduct must either be calculated to destroy or seriously damage the employment relationship or be likely to do so it doesn't have to be both the employer's intent is irrelevant if their behavior is likely to seriously damage or destroy the relationship there doesn't need to be any kind of negative or sinister motive if an employer's actions are likely to cause serious damage to the relationship then the term is breached even if the act is an employer's honest mistake although that might go to whether they had good and reasonable cause the question a tribunal will ask is whether the employee could reasonably be expected to put up with the employer's conduct it's an objective test an employment tribunal will look at what happened and come to a judgment although an employer doesn't need to intend to damage trust and confidence to breach the duty their intention might be something the tribunal considers as part of its assessment in a case called tulip prebon and bgc brokers some employees resigned to move to a competitor they claimed that they had been constructively dismissed primarily to invalidate their post-termination restrictive covenants if an employer's seriously breached the employment contract then the employer can't rely on post-termination restrictions contained in the same contract the high court considered the employer's motive for certain acts which the employees said had breached trust and confidence and the court of appeal said the original court the high court was right to consider the employer's motive although the employer's intention is irrelevant to the question of whether there's been a breach of trust and confidence if their behavior is likely to damage trust and confidence their general intentions are relevant because they may show whether they intended to abandon or refuse to be bound by the terms of the employment contract but the upshot is that an employer can make an honest mistake and still breach the implied term in a case called transco and o'brien the employer offered new and more favorable contracts to all permanent employees for good commercial reasons they didn't offer mr o'brien a new contract because they mistakenly understood that he wasn't a permanent employee he'd originally started the job through an agency the court of appeal said that the employer's failure to offer the enhanced terms to the employee was a clear breach of the implied term of trust and confidence even though it was based on a mistake the fact they didn't mean it was irrelevant an employer can't repair a breach of the implied term of trust and confidence for example by apologizing once an employer has fundamentally breached an employee's contract there's no going back the employee's actions alone will decide what happens next either they ignore the breach and say the contract of employment continues or they resign and say the employment relationship is finished what the employer does at that point is irrelevant there's more to a breach of the implied term of trust and confidence than the employer destroying or seriously damaging the relationship or behaving in a way that's calculated or likely to do so the employee must also prove that the employer had no reasonable and proper cause for their actions in a case called hilton and china the employment appeal tribunal found the demotion of an employee did not fundamentally damaged trust and confidence although the employer's conduct the demotion was likely to damage trust and confidence the employer had reasonable and proper cause for demoting the employee because it believed he was guilty of dishonesty this case shouldn't be used as an advert for unilateral demotion by the way unilateral demotion is rarely going to be fair in another case called amnesty international and ahmed the employer's conduct was found to be discriminatory when it refused to employ someone of northern sudanese origin to a job researching the civil war in sudan but the employment appeal tribunal said the employer had reasonable and proper cause for their actions based on risks to security and risks to the employer's reputation and because they had reasonable and proper cause there was no breach of the implied term of trust and confidence even though they'd been unlawful discrimination that too is an unusual case unlawful discrimination by an employer will usually breach the implied term of trust and confidence but both those cases show how an employment tribunal will analyze an employer's arguments about having a good reason reasonable and proper cause for their conduct some of the things that can cause an employer to breach trust and confidence involve day-to-day workplace issues that go wrong there's also a last straw principle even if some of the acts i'm going to talk about don't breach trust and confidence by themselves they could contribute to a series of actions which together amount to a serious breach of the implied term so what sort of things are we talking about disciplinary and grievance processes the failure to provide an impartial appeal process could be or could contribute to a breach of trust and confidence in a case called blackburn and aldi the employee's grievance appeal was heard by the same manager who dismissed the original grievance and the employment appeal tribunal said this failure could be or could contribute to a breach of trust and confidence the right to an impartial appeal in a grievance process is an important part of the acas code in this case it was also part of the employer's own procedures the employment appeal tribunal couldn't understand why an employer the size of aldi would struggle to find an independent manager to hear the appeal very small employers might have problems finding two different managers for grievance hearing and grievance appeal but this will be rare and unlikely in a large employer like aldi the employment appeal tribunal in aldi said that failing to stick to a grievance procedure might be or contribute to a breach of trust and confidence that doesn't mean every single minor breach of a grievance policy will have this effect some minor breaches of policy such as failing to stick rigidly to a short timetable are unlikely to contribute to a breach in most cases bigger failings such as a complete failure to respond to a grievance might get an employer into hot water disciplinary processes should be conducted fairly and reasonably too issuing a severe warning in front of colleagues might breach trust and confidence giving first and final warnings for lateness on consecutive days might cause problems too being too harsh too soon can come back to bite employers must also guard against bringing proceedings against an employee in relation to one issue but then consider unrelated issues as part of the process stick to the issue for which the employee is being disciplined suspension can cause problems also if it's a knee-jerk reaction in every disciplinary case suspension should only be used if there's reasonable and proper cause for it other methods of preserving evidence or assisting investigations should always be considered first such as transferring the employee and making sure any period of suspension is as short as possible that analysis if you can show as an employer you've done it will add weight to any reasonable and proper cause argument as and when employers do suspend employees employers should always ask themselves why are we suspending not just suspend because an allegation has been made will and negative comments about an employee breach trust and confidence well it depends it depends what the comments are and depends where and when they were made if they were made a board level between directors this is the company's thinking allowed process and it's unlikely to be a breach there'll be reasonable and proper cause for negative discussions about employees between directors or even between managers and hr professionals an employee would have to show there was no reasonable and proper cause for the comments which will be tricky unless the comments go way beyond what's reasonable and proper in the particular situation contrast comments made by an employer in the press might be different now there are two types of public comments things that are said about an employee that are untrue and truths which are personal and confidential both these kinds can contribute to a constructive dismissal if the employee can show there was no reasonable cause for the comments being published so in a case called rdf media and clements the employee was a public figure in the media industry he was being poached from one company by another in a potentially high profile departure the old employer made various negative comments to the press including the comment if you take the money you do the bloody job it's just so dishonorable the high court said a press release might be appropriate when a high-profile employee resigns but in this case the employer's comments were an attack on the employees character and whether true or not the comments went beyond what was reasonable and proper in that situation and were either calculated to seriously damage trust and confidence or were likely to do so a breach of trust and confidence can be particularly problematic where they invalidate post-termination restrictions and put the business at risk open and frank board discussions are fine but employers should always guard against slanging matches against employees especially comments that might be discriminatory or look bad if reiterated in court press releases should be carefully managed there may be circumstances where an employer needs to correct misstatements in the press but that shouldn't go beyond what is necessary an employer's actions in giving instructions to employees is restricted by the duty of trust and confidence even though employees should obey reasonable instructions so in a case called united bank against acta the employer used a contractual mobility clause to require an employee to move from leeds to birmingham on very short notice now the failure to give reasonable notice breached trust and confidence even though the contract said we can require you to move in another case called ub and ellsworthy a failure to agree to put a married couple on the same shift pattern when there was little effort needed to do so breached trust and confidence even though the shift patterns were within the control of the employer it meant the couple were rarely at home together and there was no reasonable or proper cause for the employer's refusal to change things around sometimes sticking rigidly to a contract can cause problems for employers as it did in those two cases it's not always enough to say but the contract says we can do it although employers aren't usually obliged to give pay increases or bonuses the implied duty of trust and confidence means they must treat employees fairly so if you give some employees a bonus but not others you need to be able to justify that decision and if the difference in treatment is unreasonable it could breach trust and confidence this was the situation in the transco case where one employee wasn't offered a new and more favorable contract that his colleagues were offered the tests a little bit different in relation to discretionary bonuses an employer doesn't have to pay what a reasonable employer would have made but its decisions have to be rational rather than arbitrary or capricious the bonus scheme rules will be relevant here also as will the bonuses awarded to other employees at the same level it's not about whether the employee's performance is good bad or indifferent it's whether the employer's decision not to pay or to pay a small amount was irrational for example it's probably not irrational to refuse to pay a discretionary bonus to your chief economist whose inaccurate forecasts contributed to serious financial losses if your bonus scheme rules say bonuses are paid to attract motivate and retain staff it's probably not going to be irrational to refuse to pay a bonus to an employee who's given notice that they intend to leave employers should have clear rules about bonus schemes and pay rises discretion should be exercised carefully and schemes should be transparent and fair if a manager can't easily articulate why an employee should or shouldn't get a bonus or pay rise it's worth probing here are some other things that can breach trust and confidence and have been held to breach trust and confidence in the case law bullying and abuse by managers in the performance of their duties will breach trust and confidence if the bullying or abuse comes from colleagues management failure to address the situation can breach the implied term too setting unachievable targets and workloads discrimination and harassment can breach trust and confidence such as managers making unwanted sexual advances or a failure to make reasonable adjustments for someone's disability remember the tests for discrimination and breach of the implied term separate so although discrimination will often in fact usually breach trust and confidence there may be rare cases when it doesn't such as the amnesty international case i talked about earlier failing to pay equal pay to an employee conducting a consultation process like redundancy or cheapy in an aggressive or underhand way such as providing false information or acting in bad faith by deliberately concealing information underhand behavior leading up to a change in an employee's terms conditions can amount to a breach of trust and confidence although remember giving notice itself is unlikely to breach trust and confidence or giving a misleading or inaccurate reference thank you so much for watching this video i hope you enjoyed it please do subscribe to get explainers on all aspects of uk law here's a video you might like here are some more videos on employment law and here's where you can subscribe to the channel thank you so much for watching i'm barrister daniel barnett bye-bye