InsightsInsight - Employment & HR - POSTED: March 30 2015
Football Manager drops the ball
In relation to contracts of employment, if an employer gives notice to terminate, the contract will, in normal circumstances, end at the expiry of that notice period.
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In relation to contracts of employment, if an employer gives notice to terminate, the contract will, in normal circumstances, end at the expiry of that notice period. The employer will continue to be liable for salary payable during that period of notice until the end of the contract. If, however, the employer dismisses the employee with immediate effect, during the notice period, that dismissal will bring the contract to an end immediately and the employer will not, after that dismissal, be liable for any further salary. However, it will expose the employer to liability for wrongful dismissal or in other words, a claim for damages caused by breach of contract. An employer can seek to defend such a claim on the basis that before the dismissal, the employee engaged in serious misconduct which entitled the employer to dismiss for gross misconduct.
Leeds Football Club – Misconduct Dismissal
The High Court has recently considered these issues in the case of Williams v Leeds United Football Club.
Mr Williams, a long-serving senior manager of the club, had a salary package the region of £200,000 per annum plus benefits and he was entitled to 12 months’ notice. He was given 12 months’ notice by reason of redundancy. It was suggested that the club had planned to dismiss Mr Williams without paying notice pay even before redundancy notice was issued and the club gathered evidence which would justify his dismissal for gross misconduct. After redundancy notice had been issued, it was discovered with the assistance of forensic investigators that over 5 years earlier Mr Williams had used the club’s e-mail system to forward an e-mail together with pornographic images to a male friend at another football club. Just a few days after Mr Williams had been given notice he was summarily dismissed for gross misconduct. It was subsequently discovered that Mr Williams had forwarded the same email to a junior female employee and a further male friend at another football club. Mr Williams sued the club for wrongful dismissal.
It is perhaps unsurprising that the Court found Mr Williams’ conduct was capable of amounting to a major breach of contract – a breach of the implied term of trust and confidence – not least because he held a senior position. The e-mail could have adversely affected the reputation of the club, and it could have amounted to harassment of a female employee.
It is perhaps a little more surprising that the Court held that the club was entitled to rely on the breach of contract to justify summary dismissal given the club’s deliberate efforts to discover wrongdoing, the fact that the e-mails had been sent such a long time ago, and the fact that two of the e-mails were only discovered after Mr Williams had been summarily dismissed.
The Court ruled that the club was entitled to rely upon a repudiatory breach as justifying dismissal irrespective of the fact that it was motivated by consideration of its own financial and commercial interests. The fact that the club had decided not to pay any further salary under the contract before the contract had been brought to an end, did not prevent the club dismissing Mr Williams summarily when it discovered the misconduct. Nor did it prevent the club from relying on misconduct discovered after the dismissal, in order to justify it. The Court relied on the old case of Boston Deep Sea Fishing and Ice Company v Ansell (1888) in which the Court of Appeal ruled that an employer was entitled to rely upon facts not known at the time to justify dismissal.
Had the Club known about the forwarding of the e-mail prior to the issuing notice and not taken any action at that point, then the decision would have been likely to have been different.
It is, however, important to keep in mind that Williams v Leeds United Football Club is a case of wrongful dismissal which is concerned with the application of contractual principles; it will not apply to cases of unfair dismissal which are mainly concerned with issues of fairness.
Catherine is a Partner in the Employment team, for more information please contact her on 01622 655291.
This content is correct at time of publication
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