An expensive “white lie” breaches implied term of trust and confidence

Mr Rawlinson was the Group Legal Counsel at Brightside Group Ltd.

A few months into his employment, the company decided to terminate his contract due to concerns about his performance, despite not having addressed these with him.

In an attempt to be kind to him, the Company told Mr Rawlinson that they had decided to outsource their legal services and as such he was no longer needed.

He was given three months’ notice of termination in line with his contract of employment.

Mr Rawlinson, however, resigned with immediate effect on the basis that any outsourcing exercise would come under TUPE transfer legislation – essentially that his role should automatically transfer to the new provider of legal services.

He resigned immediately because he maintained that the Company was breaching its statutory obligations in not recognising the TUPE and as such breached the implied term of trust and confidence.

Mr Rawlinson brought various claims in the employment tribunal including TUPE related claims and a claim for the balance of his notice pay on the basis that he had been constructively wrongfully dismissed.

The tribunal rejected the TUPE related claims, finding that there was no relevant transfer.

As for the constructive dismissal claim, the tribunal found there had been no breach of the implied term of trust and confidence as the company had no statutory obligation to disclose the correct reason for dismissal to Mr Rawlinson.

Mr Rawlinson appealed.

The Employment Appeal Tribunal agreed with Mr Rawlinson, believing that the implied term of trust and confidence must bring an obligation not to deliberately mislead.

The fact that the employer alleged it had acted with good intentions did not prevent there being a breach of trust and confidence.

Mr Rawlinson’s claim for constructive wrongful dismissal was successful and he received an award in respect of his notice pay.

Whilst it wasn’t a huge payout (just the balance of notice that would have been paid anyhow), this case is a reminder of always relying on the legitimate reasons for a termination.

Not doing so creates ambiguity and can give claimants an opportunity to claim for constructive wrongful dismissal (notice pay) but also discrimination and automatic unfair dismissal claim, which don’t require two years’ service to bring.