In this week’s alert, we look at an employment tribunal case where an employee brought claims for unfair dismissal and disability discrimination following a decision to make him redundant 2 weeks after he was offered a settlement agreement says Caroline Rayner of Baines Wilson LLP.
The employee had been struggling with his mental health for several months due to ongoing issues in the workplace. However, it was the disclosable internal correspondence which provided the detail on the employer’s true intentions.
Courtney v AGTC Ltd
Mr Courtney began his employment as an Operations Manager with AGTC Ltd, a retail sales company, in January 2018 until he was made redundant in April 2021. In around June 2020, the relationship with one of his colleagues, Ms Forbes Taylor, began to break down. She mistakenly sent negative messages to the work group WhatsApp about him, rather than sending them privately to a colleague. Mr Courtney was a member of the group and saw the messages. He raised a grievance and said that Ms Forbes Taylor had been bullying him in various ways over the last few months. A meeting subsequently took place between the pair and Mr Cutler, Co-Founder of AGTC, was under the impression that the issues had been resolved.
Following this in August 2020, Mr Courtney took a period of time off work on sick leave due to stress at work, after Mr Cutler informed him during a meeting in front of his colleagues that he did not think Mr Courtney had the skill set to be appointed to a new Head of Operations role. There were discussions around restructuring the department and Mr Courtney was told he no longer needed to attend senior leadership team meetings, as a result he felt like he was being pushed out. Mr Courtney throughout was speaking to his GP regarding his ongoing issues with his mental health and told Mr Cutler that he was suffering from depression and that because of his medication he was “spaced out”. In November 2020, Mr Courtney attended a virtual team meeting in which Mr Cutler again targeted Mr Courtney in front of his colleagues by referring to stock that had been lost and stating that Mr Courtney had “switched off”. There was a contractual procedure in place which required the company to compile a personal wellness action plan for anyone with a diagnosed mental health problem, but this was not done. Around this time, Mr Courtney’s performance was criticised, and he was told that he had been removed from the senior leadership team due to these issues.
Mr Courtney told the HR Business Partner that he was suffering from depression due to alleged bullying. She said that he could take the rest of the year off work and offered counselling sessions, but he did not wish to take any time off work. In December 2020, the HR Business Partner sent an email to Mr Cutler and Mr Gilbourne, the Managing Director. The tribunal found that by this time the company had decided that it no longer wanted to employ Mr Courtney but didn’t make immediate steps to terminate his employment because it was trying to find a way to do so which would appear to be lawful. The email stated that they needed to ‘be careful with our steps and the way we are approaching Anthony’. It stated that they would set clear expectations for Mr Courtney on his return and give him a short period of time to improve on these areas – if no improvement was shown, they would ask for a protected conversation in order to offer a settlement agreement. If he did not agree to an exit package, he would be placed under six months’ formal performance management, following which he would be dismissed if he did not improve.
Mr Gilbourne responded to these emails to state ‘if we just tell him to ‘go’ what’s the most we could be sued for?’ he then went on to say, ‘Do we also have an option to say, Anthony, your job has been relocated…. So we don’t sack him but basically push him to resign…. While all of this is going on, can we drop his salary down to what we paid him when he started? At least we are not paying top dollar for a non performer!!!!!!!’ The correspondence then went on to discuss the option of potentially making his role redundant.
Mr Courtney returned to work in January 2021 and had a meeting with Mr Cutler which ended with Mr Cutler encouraging the Claimant to raise a grievance in relation to the issues from June 2020, despite Mr Courtney saying nothing could be done because it hadn’t been previously, and he had been told it was all in his head. Mr Courtney subsequently raised a grievance which was not upheld. He was referred to occupational health which reported that he was suffering from a recurrent significant mood disorder caused by work and personal issues. The report made a number of recommendations and Mr Cutler sent an email to HR asking if it would change the business restructure case if it was recommended that Mr Courtney took time off work. HR responded to say that “we are ahead of him but he is trying to wiggle his way” and that they could “look at terminating his contract because of health reasons”.
On 22 March 2021, Mr Courtney was offered a settlement agreement; however, he did not respond to this by the deadline given. Just over two weeks later, Mr Courtney attended a meeting with a colleague in which they were both informed that they were at risk of redundancy. Following this meeting, they were provided information as to how the redundancy had come about, although the business case was not shown to Mr Courtney. He also repeatedly asked to see the new structure, but no explanation was given on this. The process ended with both employees being made redundant on 20 April 2021. Mr Courtney appealed this decision but was unsuccessful.
Mr Courtney issued claims in the tribunal for unfair dismissal and disability discrimination.
Decision
The tribunal held that whilst they accepted the requirement to reduce the operations department was genuine, this was the ‘opportunity’ to dismiss Mr Courtney and not the reason for it. It held that there were two reasons for Mr Courtney’s dismissal: the company believed he was having an adverse impact on workplace relationships and also believed that he was underperforming. It wished to dismiss him as a result, and “set about finding a mechanism to do so”.
This was evidenced by the internal correspondence on the matter which indicated that the company needed to try and find the ‘safest’ way to terminate Mr Courtney’s employment and that they should not make any quick decisions as it needed to appear legitimate. When they identified that reductions could be made in Mr Courtney’s department, they used this as the mechanism to achieve the desired outcome of termination.
The dismissal was unfair because of the reason given not being a potentially fair one, however the tribunal further held that even if the circumstances were fair, the company did not act reasonably in the circumstances in dismissing Mr Courtney. It could have been potentially fair to dismiss for the detrimental effect on workplace relationships or for underperforming, however there was no investigation and no reasonable effort to remedy the issue before looking at dismissal. Even if the reason had genuinely been redundancy, the tribunal found that the company did not act reasonably in dismissing for that reason either, because of the procedural failings. Mr Courtney was awarded £2,020.37 in compensation for unfair dismissal at a subsequent remedy hearing, given that he found another job and his redundancy payment was deducted from his compensatory award.
Comment
This case highlights the importance of addressing any capability issues with an employee at an early stage so that they can be managed effectively, whether this be in relation to performance or attendance. In this case, the employer was not happy with the employee’s performance, but failed to discuss this with him in detail or give him the opportunity to improve. Employers are required to act reasonably in the circumstances by undertaking reasonable investigations into any problem and making reasonable efforts to remedy the issue before concluding that dismissal is an appropriate response. In performance cases, employees with over 2 years’ service should also be given the opportunity to improve and supported with a view to achieving this.
Employers should also take care with internal communications as any relevant information will become disclosable in any onward tribunal proceedings. In this case, the correspondence was a significant factor in the tribunal’s findings.
If you have any questions in relation to performance management, redundancies or any other HR queries, please contact our employment team on 01228 552600 or 01524 548494.
Employment law updates
The Government has recently announced its intention to make the following changes (although no timescale has been given) following the UK’s departure from the EU:
- One global figure for holiday entitlement rather than having “normal” leave and “additional” leave (Working Time Regulations 1998)
- Creating a provision for rolled up holiday pay (Working Time Regulations 1998)
- Removing the requirement for record keeping (Working Time Regulations 1998)
- Dispensing with the requirement to consult with employee representatives when there are less than 50 employees in the company and less than 10 transferees. If a company has between 10 – 49 employees and less than 10 are transferring, they will also be exempt from collective consultation (Transfer of Undertakings (Protection of Employment) Regulations 2006).
