by Laurie Anstis on March 12, 2012
Last month, the Court of Appeal handed down judgment in the case of Crawford v Suffolk Mental Health Partnership NHS Trust  EWCA Civ 138. The case concerned the dismissal of two nurses for allegedly assaulting a patient.
Unusually, Elias LJ added a “footnote” to his judgment. At para 71 he said:
“This case raises a matter which causes me some concern. It appears to be the almost automatic response of many employers to allegations of this kind to suspend the employees concerned, and to forbid them from contacting anyone, as soon as a complaint is made, and quite irrespective of the likelihood of the complaint being established. As Lady Justice Hale, as she was, pointed out in Gogay v Herfordshire County Council  IRLR 703, even where there is evidence supporting an investigation, that does not mean that suspension is automatically justified. It should not be a knee jerk reaction, and it will be a breach of the duty of trust and confidence towards the employee if it is.”
This did not form part of main body of the judgment, and as such is not necessarily binding on more junior courts, such as employment tribunals. However, such a clear statement by such a respected employment law judge is bound to be accorded high respect by other courts, and seems bound to figure in many future arguments and judgments.
I think this paragraph throws up many issues for consideration, and leads ultimately to one of the most fundamental questions of employment law – is the employment relationship simply a matter of contract law, or does it have special features as a status in its own right?
Let’s consider two scenarios. Both are variations of situations that I have come across a number of times in practice.
In the first scenario, a manager comes across one employee shouting and hitting another.
In the second scenario, a manager overhears a phone call in which an employee tells a client that they (the employee) are setting up their own business, and they can give the client a better price for the order by putting their sale through their own business, rather than their employer’s business.
In both cases, if the manager can restrain themselves from firing the employee on the spot, the most likely reaction from the manager is to immediately send them home, suspending them. A HR manager (if there is a one) will send a letter a day or so later confirming that the employee is suspended, and, possibly, invite them in for an investigation meeting, or a disciplinary hearing.
On receipt of the letter, each employee goes to a lawyer, who advises them to resign immediately and to claim to have been constructively dismissed on the basis that the “knee jerk” suspension by the manager amounts to a breach of the duty of trust and confidence. The first employee, who has more than a year’s service, submits an unfair dismissal claim to the tribunal. The second employee immediately sets up their new business and starts to contact his or her former clients, saying that he or she is no longer bound by the post-termination restrictions in his or her contract of employment. The employer applies for an interim injunction to stop the employee breaching their restrictions.
What will be the arguments in their two cases?
Both employees will argue that their initial suspension by their manager was a knee jerk reaction – after all, it was made on the spur of the moment without apparent consideration for any alternatives. If it was a knee jerk reaction then it follows that it was a breach of the duty of trust and confidence, and the employee is entitled to accept that breach by resigning.
The employer is going to want to show that the suspension was not a knee jerk reaction – but how are they going to do that if it was a decision made on the spot? The employer will find it hard to show that they considered all the alternatives before deciding that suspension was necessary. It may not help the employer (at least at this stage) that they actually had very good reasons for suspending, since a knee jerk suspension alone seems enough to found a breach of the duty of trust and confidence, regardless of the underlying cause or merits.
The second line of argument for the employer might be to say that Elias LJ, in saying it would be a breach of the duty of trust and confidence, left open the possibility that an employer would have “reasonable and proper cause” for such a breach. It might be arguable that Elias LJ wasn’t referring to a breach of the duty of trust and confidence as a whole, but simply to the second half of the duty, leaving it possible to argue that there was no breach overall since there was “reasonable and proper cause”. Such arguments don’t really seem to have gone far in other cases, but may come back in arguments about suspension.
Third, the employer might argue, following RDF Media v Clements  EWHC 2892, that the employees cannot take advantage of a breach of the duty of trust and confidence when they are already in breach of the duty of trust and confidence themselves.
If the RDF case is good law, then this could be a fruitful argument. However, it has been doubted by many commentators. Most recently, in the December 2011 issue of the Industrial Law Journal (subscribers only) Hugh Collins has suggested that this case reflects the correct position under Scottish, but not English, law.
Both of the last two arguments seem to me to raise fundamental questions about the nature of the employment relationship, which have yet to be fully explored by the Court of Appeal or the Supreme Court. To what extent is the employment relationship a matter of contract law, like any other contract, and to what extent is it a status, with rules that exist independently of contractual principles?
If cases of knee jerk suspension get litigated, we may get the opportunity to explore these issues in more detail – that is, unless “knee jerk” is explained later as simply meaning “without good reason”.