In Rawlinson v Brightside Group Ltd, the Employment Appeals Tribunal (EAT) held that an Employment Tribunal had made an error in failing to find that the employer had acted in breach of the implied term of trust and confidence.

Facts of the Case:

  • On 1 December 2014, Mr Rawlinson started work as in-house legal counsel for Brightside Group Ltd, a firm of insurance brokers.
  • In January 2015, Brightside appointed a new CEO, Mr Wallin. Mr Wallin quickly identified concerns surrounding Mr Rawlinson's capabilities and began an internal investigation. Mr Rawlinson was aware that certain matters needed to be addressed regarding his performance; however, he was not given specific details of concerns.
  • By the end of March 2015, Mr Wallin determined that Mr Rawlinson's position was untenable due to his performance, and he communicated this to the company secretary. Without discussing this with Mr Rawlinson, the company began to plan for his successor. They decided to give Mr Rawlinson his three months' notice with the intention of him working that period in order to provide a smooth transition to his successor.
  • On 14 May 2015, Mr Rawlinson was dismissed and was given three months' notice. The company secretary informed him that Brightside intended to take a different approach to sourcing legal advice in the future and would use external advice; therefore, he was no longer needed within the business. Mr Rawlinson was deliberately not told his dismissal was due to his performance in order to 'soften the blow' and to ensure that he would work his notice period.
  • Brightside's decision to dismiss Mr Rawlinson came as a shock to him. He told the company secretary that as Brightside would be sourcing their legal advice from an external law firm, TUPE (the Transfer of Undertakings (Protection of Employment) Regulations 2006) would apply, meaning that he would become an employee of the law firm from which they were outsourcing advice. Mr Rawlinson asked for the name of the law firm, and Brightside refused to comment.
  • Mr Rawlinson resigned with immediate effect, refusing to work his notice period on the basis that Brightside was in breach of contract, and brought employment tribunal claims for, among other things, breach of the duty to inform and consult under TUPE and wrongful constructive dismissal.

Judgment of the Employment Tribunal

The Employment Tribunal rejected Mr Rawlinson's TUPE claim on the basis that there was no relevant transfer. In relation to the contract claim for wrongful constructive dismissal, the tribunal found that Brightside was not under any obligation to give Mr Rawlinson a reason for his termination of employment; therefore, the implied obligation on employers to maintain trust and confidence had not been breached. Mr Rawlinson appealed the decision.

Judgment of the EAT

The EAT found in favour of Mr Rawlinson. The EAT found that 'in all but the most unusual of cases, the implied term [that an employer will not act so as to breach the duty of mutual trust and confidence that exists between the employer and the employee] must import an obligation not to deliberately mislead'. This does not mean the employer necessarily has to volunteer information; however, if it chooses to volunteer information, it should do so in good faith and not have an ulterior motive.

Key points to note from this case

This case serves as a warning to employers that think they are doing the employee a favour by not telling him or her the true reason for his or her dismissal. If an employer chooses not to share their reasoning, then it is better to say nothing at all than to mislead. Honesty seems to be the best policy, no matter how hard it may be for the employee to hear the truth.

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