Legal Speak

Periodically a case comes along to remind us that underneath all good dismissal practice, Acas guidance and the rest is The Law, and that The Law is sometimes less rigid in its requirements of a fair dismissal than all that guidance might suggest.

Moore -v- Phoenix Product Development Limited is today’s such case, an everyday tale of dirty deeds and foul language in the world of water-efficient toilets.  Mr Moore was the original creator of the product and founder of the business, but by the time we enter the story he was no longer CEO and his shareholding was just 10% and heading south.  He had found the transition hard, as one might expect, but had unfortunately let that show in his behaviour.  His resentment of the new CEO was self-evident and manifested itself in repeated public criticisms of him, his performance, his management and essentially of the whole business, which Moore persisted in calling “my company” even though it clearly no longer was.

Moore and the new CEO had their heads politely but unmistakeably banged together by a Phoenix Board increasingly concerned that their fractious relationship was distracting from more important issues of corporate performance.  Though unquestionably a very zeitgeisty product, sales of the water-efficient loos were not where the company needed them to be. He was told that “it was the last meeting which would be held to discuss performance“, so not a final written warning in terms, but quite clearly so in intention.

Undaunted, Moore continued to criticise the new CEO and the business to people both within and outside it, including key investors. Investors also passed through his cro

ss-hairs – they were described by him as “leeches” but with more Fs. A meeting about this was convened at which Moore came out swinging – the ET found that he had shown “no insight, no regret, no contrition, admitting no fault and blaming others, particularly [the new CEO].”  He did not deny the conduct allegations against him, instead arguing that he was entitled to act as he did because of the performance of the new CEO. Following that meeting Moore was dismissed for a heady combination of performance, relationship breakdown and particularly misconduct.  Among a substantial number of other issues, his unfair dismissal claim majored on the fact that no right of appeal had been offered.  As we know, Acas guidance is clear that there should be a right of appeal, but both the ET and then the Employment Appeal Tribunal nonetheless dismissed Moore’s claim.  How so?

  • The EAT went back to The Law, Section 98(4) Employment Rights Act 1996.  That lays down no requirement that there be scope for an appeal, only that the employer act reasonably in all the circumstances of the case.  The Acas guidance says only that the employee should be allowed to appeal, not that the employer has to tell him of that right.  Therefore the absence of any reference to an appeal in the dismissal letter was not enough to make the termination unfair.
  • Moore had himself not actually tried to appeal against either his dismissal or the rejection of a parallel grievance.  He told the Tribunal that he would have appealed if he had known why he had been dismissed.  However, since he had not asked that question either and it was completely obvious in any case, the EAT was unconvinced.
  • In particular, both the ET and the EAT concluded that there was no possibility that even if an appeal had been expressly offered and made, it would have made the slightest difference to the outcome.  Phoenix’s trust and confidence in Moore was so corroded by his blatant failure to heed the head-banging session, his continuing refusal to accept that he no longer held the reins of the business and in particular his overwhelming lack of any acknowledgement or self-awareness around the problems caused by his behaviours, that there was simply no scope for any other conclusion.  Had Moore at least claimed to understand the problem, apologised for the past and vowed to mend his ways, found the EAT, the position might have been different.  Even then, however, Moore had said the same thing to that effect before without its making any actual impact on his conduct, and so Phoenix would potentially still have been within its rights to disregard it.
  • Moore’s seniority in a relatively small company was also very important to this against-the-run-of-play outcome.  It meant that much less prior warning of the problems caused by his performance and behaviours was necessary, and that the issues caused by them were that much greater.  His position also required that the decision to dismiss was taken by the upper levels of management, and so there was no-one left to hear any appeal except the people who had just decided he had to leave.
  • Overall, the appeal would have been a waste of time.  In all honesty most appeals are, at least in retrospect, so that by itself does not dispense with the need for one.  Here the facts of Moore’s behaviour were largely undisputed, and in those circumstances, said the EAT, “it is no part of a fair procedure to be conducted for the sake of it if the procedure is truly pointless”.
  • This is potentially a helpful case for employers, but should be treated with a fair degree of caution.  An appeal isn’t “truly pointless” just because the employer says it is.  There will need to be unarguable facts, usually (not always) a lack of hierarchical headroom permitting an appeal to someone more senior, an absence of contrition or other obvious mitigating factors and in particular, objective grounds on which the employer could conclude at the time (not merely in retrospective justification of its position) that there would be nothing the employee could realistically say if given his head at an appeal which would alter the position.
  • It probably also helps if the ET can be persuaded to take a dislike to the employee – here the Employment Judge made sure all the bases were covered by finding that even if the appeal could not be said to be sufficiently without merit to be truly pointless in the legal sense, Moore was still guilty of contributing to his dismissal to such an extent that there should be a 100% deduction from any compensation he might otherwise have been awarded.
  • One other possibility arises which was not mentioned in the decision, i.e. the possibility of Phoenix suggesting that Moore enter some form of mediation with the new CEO and/or other board members.  If this had worked, all to the good, but if he had refused to participate or the process had failed, then Phoenix’s hand would have been still stronger because there would be the proof beyond argument that the necessary working relationship between Moore and the rest of the Board had finally, categorically and irretrievably gone down the pan.