Extinguishing dismissal

Employees have the right to appeal against a decision taken by their employer following a disciplinary hearing to dismiss them. In Folkestone Nursing Home Ltd v Patel, the Court of Appeal held that where, following a successful appeal, the decision to dismiss is revoked, it follows that the contract of employment is revived, thereby extinguishing the original dismissal.

Basic facts

Mr Patel, a healthcare assistant, was dismissed in April 2014 for gross misconduct on two grounds - sleeping on duty and falsifying residents’ records. After an appeal hearing, he was informed by letter that as he was on an unpaid break when he was found to be asleep, he had not breached any company rules and as a result was reinstated.

However, as the appeal letter did not deal with the allegation that he had falsified records or that notification to the Disclosure and Barring Service had been withdrawn, Mr Patel did not return to work. Instead, he brought claims of wrongful and unfair dismissal. His employer argued that, as the appeal had been successful, he had not been dismissed.

Tribunal and EAT decisions

The tribunal judge held that there had been a dismissal for two reasons. First, although the right of appeal was non-contractual, the disciplinary procedure did not set out what should happen where the employee’s appeal was successful and no terms could be implied to say what the consequences should be. In particular, the judge held that the successful disciplinary appeal did not revive his contract of employment.

Secondly, the judge held that the letter amounted to no more than an offer to Mr Patel to return to work, the second allegation was not dealt with and it was therefore unclear as to what the outcome of the appeal was in relation to that allegation.

Relying on the decision in Salmon v Castlebeck Care (Teesdale) Limited (In Administration), the EAT held that it was implicit in the terms of the contract that it would be revived if the appeal was successful unless there was an express contractual provision to the contrary. As such, Mr Patel could not claim unfair dismissal as he had not been dismissed.

Decision by Court of Appeal

The Court of Appeal held that if an appeal against dismissal was successful, it followed that both the employer and employee had to treat the employment relationship as being revived. “This” said the Court was “not a matter of implying terms, but simply the meaning to be given to the words of the relevant contract, reading them objectively”.

Likewise, if an appeal was successful, then subject to any other contractual provisions, the employee was entitled to be treated as having never been dismissed, to be paid all back pay and to have the benefit of all other terms of their contract of employment through the relevant period and into the future. In other words, the contract was revived “so as to extinguish the original dismissal”. Conversely, if the employee exercises their right of appeal, it is obvious that they are asking to be reinstated and agreeing (if successful) to be treated as continuing to be employed under their contract of employment.

The judge went on to consider the unsatisfactory manner in which the employer had dealt with Mr Patel’s appeal, noting that it was strongly arguable that the employer was in breach of the implied term of trust and confidence in failing to resolve the more serious allegation of falsifying records.