3 Oct 2016

Employers who regularly deal with difficult employment cases may have come across the argument from a clued-up employee that he can take an injunction out against the employer to prevent the employer from disciplining or dismissing him.  Usually this is thought to be a non-starter, and an employee would have to rely upon normal employment law remedies such as wrongful dismissal or unfair dismissal if the employer acted unlawfully in terminating his contract of employment.  Damages will therefore usually be an adequate remedy.  The test for obtaining an injunction is that the party seeking the injunction must be able to show that damages are not an adequate remedy.

Employers may also have come across the problem of whether it is possible to treat a contract as being frustrated for non-performance.  Where a contract is “frustrated”, it means that it is terminated by operation of law because it is not capable of being performed.  This means that there is no statutory dismissal so, for example, an employee whose employment is frustrated would not be able to bring an unfair dismissal claim.  Employment contracts can, for example, sometimes be frustrated as a result of a long period of sickness absence, or because of the imprisonment of an employee.

A recent case (Jan Gryf-Lowczowski v Hinchingbrooke Healthcare NHS Trust) looked at the issue of whether and, if so, in what circumstances an employer might be entitled to treat an employment contract as being frustrated in circumstances where the frustration of the contract would deprive the employee of the protection of a contractual disciplinary procedure.  The case also looked at the question of whether, if the contract was not frustrated, the employee was entitled to any injunctive relief to prevent the employer from taking this action.

Briefly, the facts of the case were that Mr G-L was employed by the Trust as a consultant surgeon.  His employment contract provided that if the Trust thought his professional competence had been called into question they would resolve the matter through an internal disciplinary or capability procedure.  Mr G-L was placed on special leave pending the outcome of an assessment following concerns about his competence.  When this assessment was completed some 11 months later it was partly supportive and partly critical of the Mr G-L.  It recommended re-skilling for him at another Trust for 6-12 months.  Another Trust agreed in principle to undertake the recommended re-skilling placement but the employing Trust then sought to argue that the contract had been frustrated because of Mr G-L’s inability to fulfil the commitments under that contract.  The employing Trust sent a copy of the assessment to the Trust which had agreed to help re-skill Mr G-L (which it was required to do), but also sent some additional material which was highly critical of Mr G-L and, as a result of that, the offer of re-skilling was withdrawn.  Mr G-L had been on special leave for 19 months.

The Court decided that the length of time which Mr G-L had been on special leave was not the deciding factor in determining whether the contract had been frustrated.  The Court took into account the fact that if the contract was frustrated, Mr G-L, as a specialist consultant surgeon, would be unlikely to be able to work within the NHS again.  It was therefore reasonable for the Trust to wait longer than normal before treating the contract as frustrated.  The Court also took into consideration the fact that there was still a possibility that Mr G-L may be able to re-skill.  The Trust was also to blame for the withdrawal of the earlier offer to re-skill (because the employing Trust had sent documents it shouldn’t to the new Trust).  The Court therefore decided that the contract had not been frustrated.  Note though that this argument could still potentially be used by employers where there is a long period of absence from work, and where it can be argued that the contract is no longer capable of being performed (as above, this would be the case if an employee is sent to prison for several years).

Since the contract had not been frustrated, it was still continuing.  The Court therefore looked at whether Mr G-L could obtain an injunction to prevent his employer from dismissing him.  The Court decided that Mr G-L could obtain an injunction.  The Court decided that there was still the possibility that, following re-skilling, Mr G-L could return to work at the Trust. Mr G-L was also found to be entitled to rely upon the contractual disciplinary procedure.  If no injunctive relief was granted and the Trust dismissed Mr G-L the Court found that damages would not be an adequate remedy.  Mr G-L would be deprived of the opportunity to justify and vindicate himself, he would lose the congenial employment he had had with the Trust and might well be unable to find alternative employment, at least within the NHS.  The injunction was therefore granted and Mr G-L continued to be entitled to receive pay from the Trust, at least until the re-skilling had been completed.

The granting of an injunction in such circumstances may well send a shiver down employers’ spines.  However, the basic principles of injunctive relief remain the same, which is that an injunction should only be granted if damages is not an adequate remedy.  It is likely to remain a fairly exceptional case where an employee will be able to take injunctive action to prevent his employer from dismissing him.  In the present case, the fact that dismissal would deprive Mr G-L of the opportunity to ‘clear his name’ seems to have weighed heavily on the Court’s mind, as did the fact that if he was dismissed without having had this opportunity, he would be unable to find alternative employment, at least within the NHS.  His losses would therefore be considerably more than the damages he would get for unfair dismissal and wrongful dismissal.

It is worth bearing this in mind, particularly when dealing with a senior, well remunerated executive in relation to a contractual disciplinary procedure.  Where possible any contractual disciplinary process should be followed to avoid the executive raising this type of argument. 

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