264: Practicability of employee re-engagement
Although the usual remedy for unfair dismissal is compensation, employees may also request reinstatement in the same job on the same terms, or re-engagement in a comparable job on terms decided by the Tribunal. When deciding whether to make a reinstatement or re-engagement order, the Tribunal will consider the employee’s wishes, the extent to which they contributed to their dismissal, and whether it is practicable for the employer to comply. In the recent case of Kelly v PGA European Tour, the EAT has allowed an employer’s appeal against a re-engagement order because the Tribunal had imposed its own view of what was practicable for the employer.
Mr Kelly started working for PGA in 1989 as marketing director of the European Tour, eventually becoming group marketing director. In 2015, as part of a wider evaluation of senior management, a new chief executive decided to dismiss Mr Kelly due to concerns about his performance and willingness to embrace the change in leadership. Before he was dismissed, Mr Kelly covertly recorded two meetings held to try to agree exit terms. He subsequently brought various claims, including unfair dismissal and age discrimination.
Mr Kelly’s age discrimination claim was dismissed after a contested hearing. However, PGA conceded that he had been unfairly dismissed since it had failed to follow a fair procedure. At the remedy hearing, Mr Kelly requested reinstatement or re-engagement. The Tribunal refused reinstatement but ordered that Mr Kelly be re-engaged in the role of commercial director in China. Although he did not meet PGA’s essential requirement of speaking Mandarin, the Tribunal considered that re-engagement was practicable because Mr Kelly was willing to relocate to China and to learn Mandarin, particularly given his proficiency in languages. The Tribunal also held that any trust and confidence issues arising from PGA’s doubts about his capability, and integrity arising from the covert recordings, were not so significant as to affect its decision and could be overcome if reasonable professional behaviour was maintained.
On appeal, the EAT overturned the Tribunal’s decision. The EAT agreed with PGA that the Tribunal had substituted its own views rather than assessing whether PGA had genuinely and rationally lost trust and confidence in Mr Kelly. The Tribunal had also been wrong to substitute its own view on whether the ability to speak Mandarin was an essential requirement of the role. Ordering re-engagement in these circumstances went beyond what was practicable for an employer and failed to give weight to PGA’s commercial judgment.
In order to persuade a Tribunal that reinstatement and re-engagement are impracticable, an employer must show that concerns about trust and confidence are justified and genuine, ideally through written records. As this case illustrates, these principles apply to capability as well as conduct dismissals. Most employees will request compensation as the remedy for unfair dismissal but requests for reinstatement and re-engagement orders may become more common given the current economic situation. It is also worth noting that additional compensation is payable if an employer refuses to comply with an order.