12 January 2017

Where an employment tribunal finds that an employee has been unfairly dismissed, the “primary” remedy which the tribunal can grant (if the employee wishes it) is to order that the employer re-employ the employee in their old role, or re-engage them in a new role, and pay them the wages they would have earned since the dismissal. While the employer cannot actually be forced to rehire the employee, there will be a further significant financial penalty if he does not.

Cases dealing with reinstatement are fairly rare, as it is quite unusual for the employee to seek this remedy. By the time of the hearing, the employee may have found other work, or may harbour ill will towards the employer and not want to return. For that reason, in most cases the remedy is simply an award of compensation.

Even if an employee seeks reinstatement, a tribunal will not order that if it is not practicable for the employer to re-employ the employee. Employers often argue that it is not practicable to re-employ the employee because they have lost trust and confidence in the employee.

In the recent case of United Lincolnshire Hospitals NHS Foundation Trust v Farren an employee was dismissed in relation to a dispensing error and alleged falsification of documents. The employer considered the employee had been dishonest.

The tribunal found the dismissal was unfair. The employee sought reinstatement. The employer resisted this arguing it had lost trust and confidence in the employee due to her dishonesty during their internal process and during the tribunal process.

The tribunal rejected this argument and ordered re-engagement in another role. The tribunal did not accept there had been dishonesty, so there was no reason for the employer to have lost trust and confidence.

This decision was overturned by the Employment Appeal Tribunal which held that the tribunal had asked the wrong question and effectively substituted its assessment of whether the employee was trustworthy, for the employer’s. The correct question was whether the employer had indeed genuinely lost trust and confidence, and whether there was a rational basis for that conclusion. If there was, then it could not be practicable to require the parties to work together again, notwithstanding the tribunal’s view that the employer had failed to establish to the tribunal’s satisfaction that the employee had actually been dishonest.

This is a welcome decision for employers, who should be less concerned about the prospect of being ordered to re-engage an employee who they have lost all trust in, assuming that loss of trust is genuine and rational.

Contact Caroline Carr Partner and Accredited Specialist in Employment Law   E. cac@bto.co.uk T: 0141 221 8012