When it is lawful to refuse to rehire unfairly dismissed employee

The Court of Appeal has confirmed that an employer could be justified in not re-engaging an unfairly dismissed employee if it had a rational belief that he could not carry out the duties required in a new role or if there had been a genuine breakdown of trust.

The case involved Mr Scott Kelly, who had been Group Marketing Director of the PGA European Tour for many years until it decided he was not capable of fulfilling the role it wished him to perform and dismissed him.

An employment tribunal rejected his claim of age discrimination, but PGA conceded that the dismissal had been unfair.

Kelly sought reinstatement in his old job or, alternatively, re-engagement to the role of Commercial Director, China.

The tribunal found that his old role had been substantially replaced by a different role and had effectively ceased to exist. PGA objected to re-engaging him in the China role on the basis that it did not believe him capable of it; he did not satisfy an essential requirement of the role, to speak, write and read Mandarin, and because of a perceived breakdown in trust and confidence.

The tribunal determined that his willingness to learn Mandarin, and his proficiency in languages, meant that it was practicable for him to be re-engaged in the China role. It found that the issue of trust and confidence arising from doubts about his capability and integrity were not so significant as to make re-engagement impracticable.

PGA appealed. The case went all the way to the Court of Appeal, which ruled in PGA’s favour.

The court held that under employment law, re-engagement meant engaging a dismissed employee in a role comparable to that from which they had been dismissed or in other suitable employment.

However, that did not require looking at comparable or suitable alternative employment carried out by other employees. An employer could not realistically employ someone to perform a role occupied by another employee.

The court also reiterated that it would not be practicable to order re-engagement where the employer had a genuine and rational belief that the employee had engaged in conduct which had led to a breakdown in trust and confidence.

In this case, PGA’s doubts stemmed from Kelly having covertly recorded meetings in which the terms of his departure were discussed. That had not contributed to the dismissal because the employer did not know about it at the time.

Where the conduct had not caused or contributed to the dismissal, it was necessary to test whether the employer's belief in the breakdown of trust was genuine and rational.

The tribunal in this case had not considered whether the PGA’s doubts about Kelly’s capability and integrity to perform a senior leadership role were genuine and rational. It had merely substituted its own view on the matter.

Please contact us if you would like more information about the issues raised in this article or any aspect of employment law.