Kelly v PGA European Tour EAT/0285/18

Why care?

The EAT in this case considered that an employer’s lack of trust and confidence in an employee’s capability (and not just conduct) may be a relevant factor for a tribunal to take into account when assessing whether it is practicable for an employer to re-employ an employee following an unfair dismissal. It also held that the employment tribunal had erred in reaching its own view on practicability.

The case

Mr Kelly was employed by PGA in 1989 as Marketing Director of the European Tour and by 2015 he was Group Marketing Director. In 2015, the PGA's new Chief Executive, P, decided within two months of his appointment to dismiss Mr Kelly over concerns about his performance and willingness to "buy in" to his ideas. They could not agree on exit terms and Mr Kelly was dismissed. He brought a claim of unfair dismissal. PGA conceded that the dismissal was unfair as there had not been a fair procedure so the employment tribunal (ET) considered the appropriate remedy.

Mr Kelly wanted the ET to order either that he get his old job back (reinstatement) or, failing that, to be re-engaged in similar employment (re-engagement). The ET declined to order reinstatement but did decide that it was appropriate to order re-engagement. It then had to decide whether re-engagement was practicable and decided that it was, despite the PGA’s argument that this was not the case because P lacked trust and confidence in Mr Kelly.

PGA's concerns were about Mr Kelly's capability and the discovery that he had covertly recorded meetings with P, but the ET noted that Mr Kelly had 26 years’ successful service and had recently been offered a role as a consultant on a tournament in Morocco.

The ET ordered that Mr Kelly be re-engaged in the role of Commercial Director, China, one that he had identified to be of interest. Although PGA had stated that a Mandarin speaker was required for this role and Mr Kelly did not have this skill, they considered that his willingness to learn Mandarin and his proficiency in foreign languages meant that it was practicable.

PGA appealed to the EAT against the re-engagement order. The question for the tribunal was whether it was practicable to order PGA to re-engage Mr Kelly. It is the employer's view of trust and confidence, tested by the tribunal as to its genuineness and rational foundation, that matters.

The EAT rejected Mr Kelly's argument that trust and confidence is only relevant to practicability where dismissal is based on an employee's conduct, not capability. There is no reason in principle why what is said to be a belief about the employee’s capability or performance cannot be relied upon as the source of concern.

The EAT also held that the tribunal had erred in substituting its own view on whether the ability to speak Mandarin was an essential requirement of the role. Requiring PGA to engage someone in a role for which they did not meet one of the essential (rather than preferable) requirements and accepted by the employment tribunal meant it had substituted its own decision for the employer's. The ET had therefore erred in reaching its own view. The EAT considered it clear that re-engagement should have been refused and remitted the case for further consideration by the employment tribunal.

What to take away

It is well established that a genuine loss of trust and confidence may lead to the conclusion that re-employment would not be practicable. Remedies of reinstatement or re-engagement are rarely requested but where they are, this is often the reason why they are not given.

The EAT in this case held that a breakdown of trust and confidence is relevant not just in misconduct but also capability cases. It also confirmed that it is the reasonableness of the employer's requirements, in this case that speaking Mandarin was essential to the role to which Mr Kelly wanted to be re-engaged, which the employment tribunal should assess, rather than substituting these considerations with its own decision.