The cost of getting it wrong - £182,000!
The company is a family owned business and the Claimant had worked for the company with an unblemished record for 16 years. This case revolved around whether the Claimant had confirmed an intention to retire or not. The Claimant did accept that there had been some informal discussions over when he may retire when his current car lease is expired in 2012, however he decided that he would carry on working.
What ensued where a number of allegations made against the Claimant, including an allegation that he was responsible for a late PAYE submission resulting in the company receiving penalties amounting to £18,824.05.
Following an informal meeting, which the Tribunal described as a hostile, the Claimant was pressurised into confirming when he intended to retire and when he informed that company that he was not retiring, he was accused misinforming and misleading the executive management committee. He was told that a further meeting would be arranged for him to provide an explanation as to his conduct. The Claimant was then signed off by his GP for two weeks. On the second day of his absence the Company insisted that the Claimant be subject to an independent Occupational Health assessment. They wrote an instructing letter to the medical examiner which the tribunal concluded ‘painted a distorted picture of the Claimant and was intended to influence the medical examiner’. It was at this stage that Mr Peters felt it necessary to take legal advice.
Whilst off sick the Claimant enquired as to the payment of any bonuses to Directors or anyone on the Executive Committee and was told that no bonus had been paid that year.
Eventually the Claimant returned to work, was immediately suspended and was invited to a disciplinary, following which he was summarily dismissed. The Claimant appealed and the appeal was chaired by Francesca Percival, who was the daughter of the Chairman, who is the father of the Managing Director. The original decision to dismiss on the grounds of gross misconduct was upheld. The Claimant then made an application for unfair dismissal and age discrimination to an Employment Tribunal.
The tribunal were highly critical of the Company’s conduct in their reserved judgment in respect of the Company’s behaviour and some of the observations they made make uncomfortable reading including:-
- Directors were hostile towards the Claimant and had used expletives towards him in meetings.
- The chairman was aware in January 2012 that the Claimant was not intending on retiring He was dismissed on the 14th January 2015
- Accusing the Claimant that he had misled and misinformed the Company of his intentions regarding retiring , were unfair and misplaced
- The conduct of Directors directly led to the Claimant going off sick, suffering from work related stress
- It was unreasonable to require the Claimant to attend an Occupational Health assessment only two days after going off sick
- The letter to the Medical Examiner disclosed inappropriate and unnecessary and was designed to potentially influence the outcome of the assessment
- The action of the Company while he was off sick was high handed
- Refusal of the Company to provide the Claimant with legitimate information was unreasonable.
- The decision to suspend was premeditated and unwarranted
- The Company had falsely stated that no bonuses had been paid to Directors or anyone on the Executive Committee
- It was wholly unreasonable not to provide him with copies of the written evidence that the Company was relying on during the appeal hearing
- The reasons for the dismissal were unclear
- The Finance Manager, who was the Aunt of the Managing Director, was responsible for the PAYE penalty, not the Claimant
Overall the tribunal found that all of the investigations in this case were incomplete and, certain statements were taking on face values, when they should have been challenged further and therefore the investigation was fundamentally flawed. That the statements and evidence of certain witnesses lack credibility. That the Company ‘cherry picked information to fit in with a predetermined decision to dismiss the Claimant.’
Whilst they concluded that the Company had ‘ticked all the boxes of a fair procedure’, they considered that the outcome of all the disciplinary and appeal procedures had been pre-determined.
Once the tribunal had determined that the Claimant had been unfairly dismissed, they then had to consider whether he had been subjected to any form of age discrimination. The tribunal concluded that when the Company became aware that the Claimant did not intend to retire that ‘the management trumped up charges against him which can only be described as a threatening manner’ and that such allegations would not have been brought against a hypothetical company accountant who had not reached retirement age. The found that the company had discriminated against the Claimant because of his age and upheld this part of this claim.
The Claimant was awarded £182,000 in compensation.
Lessons to be learnt
This case highlights a number of key issues that employers need to be aware of:
- There needs to be real grounds for convening an investigation or disciplinary meeting
- Investigations need to be thoroughly and impartially investigated
- Evidence should be verified and challenged if necessary
- Where a reasonable request for information/evidence has been submitted, it should be complied with
- Employers need to be particularly supportive when an employee is off sick, particularly with work related stress
- Conduct of Managers and Directors when dealing with staff issues needs to be fair, professional and they need to be honest and truthful at all stages of the process
- Employers should avoid any accusations of bias or favouritism
- As the legal age of retirement has been abolished, providing someone is capable of carrying out their role to a satisfactory standard, they can continue to work until they themselves decide it is time to leave
- Employers should never pressurise staff to leave because of their age
As this case illustrates the price for getting it wrong can be extremely high, particularly for a small business. If you need help on how you minimise the risk of a tribunal action speak to one of our advisors by calling 01455 444222 or complete our online enquiry form and an advisor will contact you shortly.
HR Services Director