We use cookies to make your experience of our website better. Some of these are set by third party Google Analytics to help us analyse website traffic. To comply with privacy regulations, we require your consent to set these cookies. If you continue to use the site without selecting an option we will assume you are happy for us to use cookies.

Supreme Court rules employers liable for “hidden” reasons for dismissal

Supreme Court rules employers liable for “hidden” reasons for dismissal

On Wednesday 27th November, the UK Supreme Court handed down its eagerly awaited judgement in Royal Mail Group Ltd v Jhuti – a case in which the Court determined that in a claim for unfair dismissal, the employer can be liable for the real reason for dismissal hidden by the employee’s line manager, regardless of the decision maker’s lack of knowledge of the real reason.  

Ms Jhuti, was employed by the company as a media specialist. It became apparent to Ms Jhuti that a colleague was breaching Ofcom guidance and company policy. Observations made by Ms Jhuti lead to her making protected disclosures (‘whistleblowing’) towards the end of 2013. 

On Wednesday 27th November, the UK Supreme Court handed down its eagerly awaited judgement in Royal Mail Group Ltd v Jhuti – a case in which the Court determined that in a claim for unfair dismissal, the employer can be liable for the real reason for dismissal hidden by the employee’s line manager, regardless of the decision maker’s lack of knowledge of the real reason.  
Ms Jhuti, was employed by the company as a media specialist. It became apparent to Ms Jhuti that a colleague was breaching Ofcom guidance and company policy. Observations made by Ms Jhuti lead to her making protected disclosures (‘whistleblowing’) towards the end of 2013. 
Subsequently, her line manager retaliated against her raising such concerns, by placing her on an onerous performance management plan. The intensive approach taken in performance managing Ms Jhuti eventually caused her to be signed off sick with work related stress, anxiety and depression. 
Ms Vickers, another senior manager, was appointed to be the decision maker in determining whether Ms Jhuti’s employment should be terminated or not on grounds of her performance. Ms Jhuti was too ill to attend any meetings arranged to discuss her potential termination. At the time the decision to dismiss was made, Ms Vickers did not know that Ms Jhuti had made protected disclosures which were deliberately hidden from Ms Vickers by Ms Jhuti’s line manager.   Crucially, Ms Vickers motivation in coming to the conclusion she did, had not been influenced by Ms Jhuti’s whistleblowing. Ms Vickers’ decision to dismiss Ms Jhuti was made on the basis that she genuinely believed the poor performance reports presented to her. 
Ms Jhuti applied to the Employment Tribunal with two complaints: firstly, that she suffered detriments by acts of the company as a result of her protected disclosures and secondly, she was automatically unfairly dismissed, again as a result of making protected disclosures. 
The ET held Ms Jhuti had made four protected disclosures and on four occasions had been subjected to detriments by acts of the company on the basis of her making protected disclosures. The ET dismissed complaint two, unfair dismissal, on the basis that the protected disclosures had played no part in the dismissing manager’s reasoning.
Ms Jhuti appealed against the dismissal of her second complaint. The Employment Appeal Tribunal upheld the appeal, finding her dismissal unfair: the reason operating in the mind of the manager who had manipulated the dismissal could be attributed to the employer, even in circumstances where the decision maker herself was unaware of it, and the dismissal was therefore because Ms Jhuti made protected disclosures. 
On further appeal to the Court of Appeal, the CA disagreed with the EATs decision. The CA held that in deciding what the reason for the dismissal was, a tribunal must restrict itself to the mental processes of the person or persons who were authorised to, and did, make the decision to dismiss. 
An appeal was then made to the Supreme Court who agreed with the EAT: if a person in a position of hierarchy above the employee determines that the employee should be dismissed for a reason but hides the real reason for dismissal behind one which is fictitious which the decision maker adopts, the reason for dismissal will in fact be the hidden reason rather than the one which was invented. The Court’s decision suggests this only applies where the manipulator is above the employee in terms of hierarchy.
As the Supreme Court noted, the facts of this case were extreme and instances of decisions to dismiss taken in good faith, not just for a wrong reason but for a reason which the employee’s line manager has dishonestly constructed, will not be common. Nonetheless this is an important decision and serves as a reminder to employers of the importance of fully investigating and considering the employee’s case before dismissal, particularly where the employee is unable to make proper representations due to their ill-health. 

Subsequently, her line manager retaliated against her raising such concerns, by placing her on an onerous performance management plan. The intensive approach taken in performance managing Ms Jhuti eventually caused her to be signed off sick with work related stress, anxiety and depression. 

Ms Vickers, another senior manager, was appointed to be the decision maker in determining whether Ms Jhuti’s employment should be terminated or not on grounds of her performance. Ms Jhuti was too ill to attend any meetings arranged to discuss her potential termination. At the time the decision to dismiss was made, Ms Vickers did not know that Ms Jhuti had made protected disclosures which were deliberately hidden from Ms Vickers by Ms Jhuti’s line manager. Crucially, Ms Vickers motivation in coming to the conclusion she did, had not been influenced by Ms Jhuti’s whistleblowing. Ms Vickers’ decision to dismiss Ms Jhuti was made on the basis that she genuinely believed the poor performance reports presented to her. 

Ms Jhuti applied to the Employment Tribunal with two complaints: firstly, that she suffered detriments by acts of the company as a result of her protected disclosures and secondly, she was automatically unfairly dismissed, again as a result of making protected disclosures. 

The ET held Ms Jhuti had made four protected disclosures and on four occasions had been subjected to detriments by acts of the company on the basis of her making protected disclosures. The ET dismissed complaint two, unfair dismissal, on the basis that the protected disclosures had played no part in the dismissing manager’s reasoning.

Ms Jhuti appealed against the dismissal of her second complaint. The Employment Appeal Tribunal upheld the appeal, finding her dismissal unfair: the reason operating in the mind of the manager who had manipulated the dismissal could be attributed to the employer, even in circumstances where the decision maker herself was unaware of it, and the dismissal was therefore because Ms Jhuti made protected disclosures. 

On further appeal to the Court of Appeal, the CA disagreed with the EATs decision. The CA held that in deciding what the reason for the dismissal was, a tribunal must restrict itself to the mental processes of the person or persons who were authorised to, and did, make the decision to dismiss. 

An appeal was then made to the Supreme Court who agreed with the EAT: if a person in a position of hierarchy above the employee determines that the employee should be dismissed for a reason but hides the real reason for dismissal behind one which is fictitious which the decision maker adopts, the reason for dismissal will in fact be the hidden reason rather than the one which was invented. The Court’s decision suggests this only applies where the manipulator is above the employee in terms of hierarchy.

As the Supreme Court noted, the facts of this case were extreme and instances of decisions to dismiss taken in good faith, not just for a wrong reason but for a reason which the employee’s line manager has dishonestly constructed, will not be common. Nonetheless this is an important decision and serves as a reminder to employers of the importance of fully investigating and considering the employee’s case before dismissal, particularly where the employee is unable to make proper representations due to their ill-health. 

By Chelsey Mitchell,
Trainee Solicitor 

Burness admin