Employment Law Case Update: Fair dismissal with no right to appeal

Offering the right to appeal in a dismissal is a controversial area, with some tribunals ruling that a lack of a right to appeal renders the dismissal unfair.  Our Employment Law team today review the case of Mr G Moore v Phoenix Product Development Limited 2021 in which the Employment Tribunal ruled that a dismissal was not unfair, despite the fact that the employee was not offered a right to appeal.

Mr Moore was the founder of Phoenix Product Development and the inventor of a water efficient toilet, which the company sold and marketed. Mr Moore was the CEO of the company from 2001 until 2017 when he was replaced by Mr Jones. Mr Moore remained an employee and a director but he had trouble accepting this new arrangement. He referred to the institutional investors as “leeches” and displayed a generally poor attitude, causing his relationships with the other directors to sour.

In March 2019, the board of directors held a review meeting with Mr Moore and Mr Jones where the two men agreed to try and set aside their differences and work together. Not long after, Mr Moore had a conversation with one of the company’s investors where he criticised the company and Mr Jones’ performance.

The board then informed Mr Moore that there would be a formal board meeting to consider his future at the company. Mr Moore was “combative” on hearing this. He was informed of the allegations before the meeting and given an opportunity to respond. He denied all allegations, and the Employment Tribunal (ET) heard he was unrepentant and continued to refer to the company as “my company”.

At the end of the meeting the directors voted four to five to dismiss Mr Moore, with Mr Moore himself being the only dissenting vote. He was dismissed with six months’ notice and was not given the right to appeal. Mr Moore then lodged a claim with the ET for unfair dismissal.

The ET rejected Mr Moore’s claim, finding that Mr Moore entered the board meeting “in a thoroughly confrontational mode and showing no insight, no regrets, no contrition, admitting no fault, and blaming others” and that this undermined the board’s trust and confidence in Mr Moore. The board had shown a willingness to work with Mr Moore and it was Mr Moore’s fault alone that the relationship did not work.

Mr Moore appealed to the Employment Appeal Tribunal (EAT), which found that the ET correctly applied s98(4) of the Employment Rights Act 1996 and the procedure was fair. Justice Choudhury reasoned that “although an appeal will normally be part of a fair procedure, that will not invariably be so” and that it will depend on the circumstances of each case. The EAT considered the following to be relevant circumstances which justified the ET’s finding that an appeal in this case would have been “futile”:

1. The fact that Mr Moore was a board-level director;
2. There was no higher level of management;
3. Mr Moore himself had caused a breakdown in trust and confidence;
4. Mr Moore was considered “destructive” and a “drag-factor” on the company;
5. Mr Moore was unrepentant and had not shown any sign that he would change.

This case reaffirms another decision in Gwynedd Council v Barratt and anor in which the Court of Appeal confirmed that the lack of an appeal will not necessarily render a dismissal unfair. While employers may welcome these decisions, they should note that the circumstances in the present case were unique and that in most cases an appeal should be included as part of a fair procedure.

If you have any questions regarding this article, you can call our Employment team today on 023 8071 7717 or email employment@warnergoodman.co.uk.

This was previously part of our weekly Employment Law Newsletter. If you would like to subscribe, please email us at events@warnergoodman.co.uk or just fill in our subscription form.

ENDS

This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice.  All content was correct at the time of publishing and we cannot be held responsible for any changes that may invalidate this article.