Knee-Jerk Dismissals Are No Way to Resolve Boardroom Conflicts

Boardroom tensions often lead to precipitate action but resorting to dismissal without following proper procedures is never a good solution. An Employment Tribunal (ET) made that point in upholding whistleblowing, unfair dismissal and age discrimination complaints brought by a start-up company’s…

Sep 01, 2022

The woman’s dismissal occurred against a background of increasingly dysfunctional boardroom relationships. Without due process, she was removed as a Companies House director whilst she was on annual leave and the decision to terminate her employment was taken whilst she was off sick, suffering from stress.

The company asserted that it had no option but to dismiss her under pressure from its investors, who were unhappy with her performance. In upholding her automatic unfair dismissal complaint, however, the ET found that the principal reason for her dismissal was her whistleblowing activities.

She had made protected disclosures concerning various matters, including corporate governance and the treatment of a colleague whom she believed to be on the verge of a breakdown. As a result, she had been subjected to detriments, including her removal as a director and her placement on gardening leave.

Her request for an extraordinary general meeting to discuss her grievances was rejected as frivolous, defamatory and vexatious and, shortly before her dismissal, documentation was issued with a view to raising further investment that made no reference to her role as the company’s CFO and one of its founders.

Her claim of ordinary unfair dismissal was also well founded in that the decision to dismiss her was taken before she was invited to any meeting. She was subjected to a disciplinary process without being given an opportunity to respond to any allegations against her during an investigatory stage.

In also upholding her age discrimination complaint, the ET found that at least part of the reason for her dismissal was her age, which was 55 at the time. At one meeting, one of her fellow directors had told her to ‘calm down…don’t let the hormones get out of control’. That was evidence that he regarded her as a menopausal woman who was not familiar with the company’s IT business.

The ET acknowledged that the company and its investors did have some substantial concerns about her performance. Although that was not the reason for her dismissal, it found that there was a 30 per cent chance that she would have been dismissed in any event on capability grounds. The amount of her compensation, which would be assessed at a further hearing if not agreed, would be reduced by that percentage accordingly.

Use of Discriminatory Words in the Workplace – Context Always Matters

Employers are entitled to enforce zero-tolerance policies in respect of discriminatory remarks in the workplace. As an Employment Tribunal (ET) ruling showed, however, a thorough investigation is always required prior to a dismissal, not least because words that may be utterly unacceptable in one context may not be in another. A sales manager with an otherwise blemish-free disciplinary record was summarily dismissed on grounds of gross misconduct on the basis that he had used the discriminatory…

Was Restaurant Chef’s COVID-19 Redundancy Inevitable? Guideline Ruling

When employees are unfairly dismissed, it is commonplace for employers to assert that they would have lost their jobs in any event and that they have thus sustained no financial loss. As a case concerning a restaurant chef showed, however, such contentions are unlikely to be accepted in the absence of solid evidence. The chef was the most junior member of the restaurant’s 10-strong kitchen team of non-speciality chefs. Following a downturn in business arising from the COVID-19 pandemic, he was…

Parcel Delivery Franchisees ‘Self-Employed’ – Guideline EAT Ruling

A right to substitute someone else to perform your work is perhaps the most powerful indicator that you are self-employed. The Employment Appeal Tribunal (EAT) made that point in finding that franchisees engaged by a parcel delivery company enjoyed neither the protected status of an employee nor that of a worker. The case concerned two men who entered into standard-form franchise agreements whereby they were required to provide a vehicle and driver to make collections and deliveries for the…