EAT Case Analyzes Constructive Dismissal, Dishonesty, and Procedural Fairness in Employment Law

Introduction

The case of Stuart Harris Associates Limited v A Gobudhun [2023] EAT 145 presents a nuanced analysis of employment law with particular focus on constructive dismissal and the role of honesty and competence in professional conduct. This article dissects the reasoning of the Employment Appeal Tribunal (EAT) and focuses on the legal principles applied within the context of alleged biased judgment, procedural irregularity, and application of tests for dishonesty.

Key Facts

Ms. A Gobudhun, an accountant, contested that she was instructed by her employer, Stuart Harris Associates Limited, to adopt an expenses practice she considered unlawful, leading to her resignation and claim of constructive dismissal. The original tribunal upheld her claim, finding that the instruction destroyed the relationship of trust and confidence, essential to her employment contract. On the other hand, the employer challenged the Tribunal’s decision based on alleged prejudgment, inappropriate legal research by the Judge, and findings of dishonesty or incompetence without evidence or proper procedural opportunities for Mr. Harris to respond.

Legal Principles

The EAT applied several key legal principles in reviewing the original Tribunal’s judgment:

Procedural Fairness and Bias

The notion of procedural fairness was pivotal, with references to relevant cases like Southwark LBC v Jiminez and City of London Corporation v McDonnell. The key principle is that a fair-minded and informed observer must consider whether there was a real possibility of bias from the Judge’s conduct. The provisional views conveyed by the Tribunal Judge and their intervention in questioning were scrutinized to assess if there was any prejudgment or bias.

Constructive Dismissal

Central to the case was the principle of constructive dismissal and whether the employer’s instructions constituted a repudiatory breach of the implied duty of trust and confidence within the employment contract.

Dishonesty and the Ivey Test

The EAT applied the two-stage test for dishonesty from Ivey v Genting Casinos, which considers the subject’s actual knowledge or belief as to the facts (subjective element) and then the standards of ordinary decent people (objective element). The EAT found that the Tribunal did not properly apply this test, particularly the subjective element, resulting in the setting aside of the finding of dishonesty against Mr. Harris.

Procedural Irregularity

In accord with principles from cases like Kalu v University Hospitals Sussex NHS Foundation Trust, the EAT noted the seriousness of the procedural irregularity that arose due to the failure to put the issue of dishonesty directly to Mr. Harris.

Meek Guidelines

Lastly, Ground 5’s Meek challenge was not pursued further since Grounds 3 and 4 regarding the allegation of dishonesty were upheld, rendering Ground 5 redundant.

Outcomes

The EAT upheld the appeal in part, setting aside the Tribunal’s finding of dishonesty due to serious procedural irregularity. However, it noted the precedent that not all procedural irregularities necessitate the setting aside of an entire decision. Hence, the findings of constructive unfair dismissal, lack of contributory conduct, and the related awards stand independently of the removed dishonesty finding.

Conclusion

This case serves as a significant reminder of the critical standards required for fair trial proceedings, especially when serious allegations such as dishonesty are under consideration. The application of Ivey v Genting Casinos reaffirms the need for precise findings on a person’s knowledge and belief to substantiate a finding of dishonesty. As the EAT’s nuanced approach to procedural fairness demonstrates, even when part of an appeal is upheld, this does not automatically lead to the setting aside of an entire decision, particularly where specific findings can stand on their own. The decision reflects the judiciary’s continued commitment to ensuring that the principles of natural justice are maintained within the employment law sphere.