A recent High Court case has raised the interesting issue of using ‘old’ misconduct as a reason to dismiss an employee who is being made redundant, and as a result, avoiding costly severance payments. The employee in question, Mr Williams, had been employed as a Technical Director at Leeds United Football Club (LUFC) since 2006, on a salary of £200,000 a year. His contract included a 12 month notice period if his employment was terminated.
In 2013, LUFC decided to restructure their senior management team and Mr Williams’ post was identified as being at risk. At the same time LUFC also investigated the behaviour of several senior managers, including Mr Williams, to try and find evidence of past misconduct that would allow them to make summary dismissals instead of redundancies.
On 23 July 2013 Mr Williams was given written notice of his redundancy. The next day the forensic investigation team appointed by LUFC reported that Mr Williams had received an email containing pornographic images in 2008. He had then forwarded the email to a junior female colleague and also to two friends at other football clubs. Mr Williams was invited to attend a disciplinary hearing on 29 July 2013 to discuss the matter, but didn’t turn up.
He was summarily dismissed on the grounds of gross misconduct in a letter dated 30 July 2013. LUFC refused to pay him the balance of his notice pay – a sum totalling almost £200,000. Mr Williams took the matter to the High Court, claiming wrongful dismissal and arguing that his conduct in 2008 didn’t amount to a breach of his duty of trust and confidence because he had continued working for LUFC for more than five years after the incident.
The High Court rejected the claim of wrongful dismissal. This was despite the fact that LUFC had instructed their managing director to stop Mr Williams’ pay before his redundancy notice was served (and were therefore in breach of contract) and also before any evidence of his misconduct came to light.
Mr Justice Lewis took the view that, even though LUFC was actively looking for instances of gross misconduct so they could sack Mr Williams and avoid paying him 12 months’ notice, there was no evidence that they knew about the pornographic email at the time the redundancy notice was served. The only reason that the email wasn’t mentioned in Mr Williams’ termination notice on 23 July is that it wasn’t discovered until the following day.
So, when LUFC found out about the lewd email, they were entitled to take the same action as if they had known about it at the time. The High Court ruled that, despite the five years that had elapsed since the incident, Mr Williams’ act of forwarding the email to a junior colleague did amount to a breach of his duty of trust and confidence.
Furthermore, Mr William’s actions also exposed his employer to a potential sexual harassment charge on the part of the female employee – an act of misconduct serious enough to warrant summary dismissal.
Commenting on his ruling, Mr Justice Lewis said that: ‘where, as here, there is a repudiatory breach of the contract of employment by the employee, and there has been no affirmation or waiver of the repudiatory breach, the employer is not prevented from relying on that breach as justifying summary dismissal because it had itself decided to breach its contractual obligations or was looking for a reason to justify dismissal or was motivated by its own financial interests.’
An interesting case for employers who might now be tempted to trawl for past misconduct before making redundancy payments.
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