Personality clash of the Titans – a victory for employers?

Perkin v. St George’s Healthcare NHS Trust (“the Trust”)

Summary

An employee may be dismissed on the grounds of his personality, even if there are no issues regarding his technical competence or honesty, if it manifests itself in such a way that it damages the employer’s trust and confidence in him. Furthermore, it is possible for an employee to contribute 100% to his own dismissal and therefore negate any damages, which may have been awarded.

Facts

Mr Perkin was employed by the Trust as its Finance Director. The responsibilities of his role included managing a group of employees under him and co-operating with senior colleagues at his level and above. While the Trust had no concerns regarding Mr Perkin’s technical competence and relationships with staff in his own department, there were issues relating to his intimidating manner during meetings with other Executive colleagues and his negative personality and attitude.

In July 2002 Mr Perkin attended a meeting with the Chief Executive at which he was asked to resign with immediate effect. He refused and presented a formal grievance against the Trust. The Trust began disciplinary proceedings against Mr Perkin based on issues relating to his management style and inability to form the necessary quality of relationships with external advisors and other third parties. During the disciplinary hearing Mr Perkin made accusations regarding the integrity and honesty of the Trust’s Chief Executive and its Director of Human Resources.

The Trust decided to summarily dismiss Mr Perkin on the basis that due to his conduct and behaviour he could no longer fulfil his role as Finance Director. They further commented that in any event considering the personal attacks he had made during the disciplinary hearing they did not see how he could ever work again with the Chief Executive and others. Mr Perkin commenced proceedings against the Trust for unfair dismissal.

Decision

The Court of Appeal rejected Mr Perkin’s appeal and upheld the decision of the Employment Tribunal and Employment Appeal Tribunal that there was a fair reason for the dismissal.

The Court held that an employee’s personality alone cannot be a ground for dismissal. However, if the employee’s personality exhibits itself in such a way that it results in a breakdown of confidence in the employee and this actually or potentially damages the running of the employer’s business then, if made out by the employer, it may form the basis of a potentially fair reason to dismiss.

There was some discussion in the case as to whether the dismissal was on the ground of conduct or whether it was for some other substantial reason (“SOSR”). Lord Justice Wall considered this case fell more into the SOSR ground than conduct but commented that the Tribunal’s lack of clarity regarding the specific ground did not make its decision unsafe. Further the original Tribunal assessed the fairness of the decision to dismiss with reference to British Home Stores v Burchell [1978] (“Burchell”). The Burchell three-stage test is that:

1. the employer must have genuinely believed the employee was guilty of the misconduct;
2. the employer’s belief must have been formed on reasonable grounds; and
3. the facts must have been reasonably investigated.

In other words, if dismissal was within the employer’s range of reasonable responses then the Tribunal should not substitute its own view for that of the employer. Burchell was previously thought to be limited to cases where the employee was dismissed for conduct issues. However the Court of Appeal were of the view that the “range of reasonable responses” test has a more general application.

The Court also upheld the Tribunal’s finding that although the dismissal was procedurally unfair, due to Mr Perkin’s behaviour the eventual result, his dismissal, was inevitable. They made reference to the manner in which Mr Perkin had conducted his defence at the disciplinary hearing, attacking the integrity and honesty of his colleagues. The confirmed the Tribunal’s view that even if the disciplinary hearing had been conducted by an independent party it would still have been impossible for Mr Perkin to work with the Trust’s senior management ever again. Therefore they approved the 100% reduction in Mr Perkin’s damages.

Troublemakers beware?

Firstly, while Perkin is undoubtedly a helpful case for employers, the facts of Perkin are somewhat extreme. This was explicitly commented upon by the Court of Appeal. It will not be lawful to dismiss employees on the grounds of personal quirks or low-level personality clashes.

Secondly, Mr Perkin was dismissed without warning that the workplace manifestation of his personality was unacceptable after 16 years of service. It is in some ways surprising that this outcome gave rise to no compensation award whatsoever, probably reflecting the extreme facts and the seniority of the employee. Employers should not assume that they can follow suit with impunity.

Difficult members of staff and personality clashes in a team can be damaging not only to the effectiveness of a business but also the morale of a team. Perkin reinforces the right of employers to protect their business by removing disruptive characters and is consistent with other recent cases supporting the employers right to make assessments as to the business need for a dismissal, subject to a fair process being followed (see, for example, Scott v Richardson (dismissal for refusal to accept shift changes) and Windsor Recruitment v Silverwood (dismissal for refusal to sign restrictive covenants). However, as a general rule you should always raise the issue with an employee as soon as it arises, giving them the opportunity to change their approach.