Rise in re-engagement orders by tribunals

Applications by employees for re-engagement and reinstatement orders are on the rise. So, why is that and what, if anything, can employers do to prevent a dismissed employee returning to work for them against their wishes?

This is in the news again after the Court of Appeal’s ruling in the case of Kelly v PGA European Tour. It’s a useful case that makes it clear that employers will be able to prevent a return provided they have a genuine and rationally held belief that they have lost trust and confidence in that employee, or where they have good grounds for believing the individual is not qualified for a particular alternative role. In either case they will be able to refuse to take him or her back.    

This typically arises in circumstances where an employee has been unfairly dismissed. So, at tribunal one of the remedies available to the successful Claimant under the Employment Right Act is re-instatement (where the employee returns to their old job); another is re-engagement (where they are given a new role). The reason why those two remedies are proving popular is, we think, in some part down to the pandemic - people wanting to hang on to their old job if they can, or be given a new job, rather than the alternative which is financial compensation but with the prospect of being unemployed at a time when there are very few jobs around.

Reinstatement as a remedy is fairly straight forward. Trickier, though, is re-engagement – which is what this case was concerned with - because the Act says it can only be ordered by a tribunal where it is “reasonably practicable”. If it doesn’t pass that test then the employer is off the hook and they don’t have to re-engage. So, the key question is what does that test amount to in practice? We will come onto that shortly.

First, the facts briefly. The Claimant, Mr Kelly, had worked for the Respondent as the Marketing Director of the PGA European Tour. He was dismissed in 2015 over concerns about his performance and willingness to ‘buy in’ to the ideas of the newly appointed Chief Executive. Kelly wanted the tribunal to order either that he should return to his old job or, failing that, to be re-engaged in another similar role. The tribunal rejected reinstatement but did consider re-engagement and so had to decide whether that option was ‘reasonably practicable’. The tribunal decided it was, despite the PGA’s argument that they lacked trust and confidence in Kelly on account of how he had covertly recorded two meetings which they found out about. So, the tribunal ordered that Kelly be re-engaged in the role of Commercial Director for China even though an essential requirement of the role was to speak Mandarin. 

The PGA appealed successfully against the re-engagement order. The EAT rejected Kelly's argument that trust and confidence is only relevant to practicability where dismissal is based on an employee's conduct, not capability – that had been one of his arguments. They also ruled that since speaking Mandarin was an essential requirement for the new role, re-engagement should have been refused. 

Kelly then appealed to the Court of Appeal which has ruled the EAT’s approach to the practicability test was correct. So, the question to ask is: did the employer have a genuine and rational belief that the employee engaged in conduct which broke the relationship of trust and confidence? It is for the employer to establish that genuine and rational belief. If it does, that’s enough.

So, let’s get some reaction to the decision and see what it means for employers. Sarah Munro has seen this situation arise in a number of times in practice. She joined me by video-link from Edinburgh to discuss it: 

Sarah Munro: “Yes, it is really interesting, mainly because we don't often see reinstatement and re- engagement in the employment tribunal. What I think is really surprising for employers is that reinstatement and re-engagement are the two primary remedies in the employment tribunal and then it's only if the claimant does not want to be reinstated or re-engaged that you move to compensation. Whereas the vast majority of cases which we deal with and which employers see, the individual wants to be compensated, they do not want to be reinstated, which means going back into the job they were doing when they were dismissed, or re-engaged, which means being engaged in another job within the same employer. Claimants tend to want to depart, take any money they can, and leave and not return to work. However, we are seeing a bit of an increase in these cases and I think the reason for that is twofold. One, claimants believe that they can put a bit of pressure on the employer, if an employer sees that an individual wants to come back they might be more inclined to settle because they don't want them back, and the second point is really because of the pandemic, it's not as easy to find another job now. In the past, you might have been dismissed or left your job and easily picked up something else but now, with lots of redundancies and uncertainty in the workplace, people are not picking up jobs nearly as easily as before. So, in the past we've often heard in discussion that only 1%, or less than 1%, of cases, end up with a reinstatement or re-engagement order but now I wonder if we may begin to see an increase in that and this case was certainly really helpful in shedding some light on how the tribunals will look at whether or not an employer should be facing an order to reinstate or re-engage an individual.”

Joe Glavina: “So the Act says the test for re-engagement is whether it’s ‘reasonably practicable’ for the employee to go into the new role. So, what factors will tribunals be looking at Sarah?”

Sarah Munro: “Yes, that's an interesting question and this case was really helpful on that because it looked at whether you could focus on the ability of the claimant to do the role. So, whether they were able to perform it and, in this case, this rule was working in China and they felt that the individual needed to speak Mandarin, and this individual could not, and they felt therefore it was not practicable, not possible, for this individual to do this role and therefore the individual should not be re-engaged. So, this was going into a different role from what he did previously. The other area that tribunals focus on is whether there's been a breakdown in trust and confidence and therefore whether it's reasonably practicable for an individual to be reinstated or re-engaged and this is the one that people focus on. They see how can this person who we've been through a disciplinary process with, or a performance process with, that has resulted in their dismissal, genuinely come back and fit back into the workplace? Now, particularly for small employers, that argument usually works because it would be really difficult for someone to come back, but large employers often face more of a challenge because there's an argument that they could easily move an individual to a different department where they could get on with work without people knowing the background or the baggage. So, it's really dealt with on a case by case basis and, as an employer, the really helpful thing in preparation for a tribunal if you want to resist or defend an application for reinstatement or re engagement is to have as much evidence as you possibly can as to why it wouldn't be possible for the individual to slot back into the workplace.”

Joe Glavina: “Is the bar set high for employers do you think?”

Sarah Munro: “I think it's probably a higher bar for the individual to get over because they are unlikely to want to come back and if they do want to come back they really have to be able to show why it's going to work. On the other hand, the employer should relatively easily be able to show why they couldn't slot this individual back in to the workplace because, I wonder if in the past, employment tribunals were seen to be small industrial tribunals - which is what they used to be called - where  you could thrash out a workplace issue and resolve it and everyone could go back to work happy, but as everyone knows, employment tribunals are contentious, they’re long running, people get embroiled in arguments right the way through and to actually successfully reintegrate somebody into the workplace after such a highly emotive process as an employment tribunal is really difficult, and that will help employers if they can point to all of that, show why it just wouldn't be good for the individual or the business for them to return to work.”

That case of Kelly v PGA European Tour is a Court of Appeal decision and if you’d like to look at it for yourselves you can – we’ve put a link to it in the transcript of this programme. 

LINKS
- Link to case report: Kelly v PGA European Tour (CA)