A Business is Not an Autocracy – ET Fires Warning Shot

Old-school small business proprietors sadly often place themselves at grave financial and reputational risk by taking an autocratic approach to management. An Employment Tribunal (ET) powerfully made that point in awarding substantial compensation to an unfairly sacked holiday park manager.

The manager had a strong bond with the owner of the park, where he had worked for 26 years. After he suffered a major stroke, the owner – who was himself in very poor health – took steps to cater for his difficulties and generously supported him so that he could work at a reduced pace. However, their relationship later took a dramatic turn for the worse and the owner summarily dismissed him after making numerous allegations of misconduct against him.

Upholding his unfair dismissal claim, the ET noted that some of those involved in the case had referred to the owner as ‘old school’. The description of his proprietorial and autocratic approach to the park’s management was borne out by the tone of his communications, including the dismissal letter. They conveyed the impression that employee consultation and fair process were, in the context of the case, of no concern to him.

The dismissal took place against the background of a falling out between the owner and his son, whose involvement in the business had acrimoniously ceased. The owner took the view that the manager’s loyalties were to his son, rather than to him. On that basis, the ET found that the principal reason for the manager’s dismissal was not any misconduct on his part but the owner’s desire to make a fresh start in the business.

The ET ruled that the employer’s failure to follow the basic requirements of the Acas Code of Practice on disciplinary and grievance procedures justified a 25 per cent uplift in the manager’s basic compensatory award. Amongst other things, he was not informed of the disciplinary charges against him prior to his dismissal and was afforded no opportunity to put his case. Even for a small business, the investigation into his alleged wrongdoing was unreasonable.

On the balance of probabilities, the ET found that the manager had disregarded the owner’s instruction not to let chalets to a particular tenant. Although he did so in the belief that he was acting in the best interests of the business, he thereby made a 25 per cent contribution to his dismissal. His wrongful dismissal claim was also upheld and he was awarded more than £50,000 in compensation.