News & Insights

Fore! Or against re-engagement?

We analyse a case regarding whether re-engagement was a suitable remedy.

In a recent Court of Appeal case it was found that re-engagement was not a practical remedy where the employer genuinely had concerns about the capability of the employee in question. The case also highlights that the burden is on the employer to establish that re-engagement is not a practical solution and therefore will not be an applicable remedy.

This case concerned Mr Kelly who was employed as the Group Marketing Director for PGA European Tour (the governing body of professional European golf). The PGA had recently hired a new Chief Executive who shortly after his appointment made the decision to dismiss Mr Kelly due to performance concerns. Mr Kelly was also reluctant to “buy in” to the new CEO’s ideas.

The PGA and Mr Kelly failed to agree terms of the exit and Mr Kelly was dismissed. As a result of his dismissal he brought an unfair dismissal claim. A fair process for the dismissal was not followed and as a result the PGA conceded that the dismissal was unfair. Remedies where then considered.

Reinstatement and re-engagement are potential remedies in unfair dismissal cases and if requested by a claimant the tribunal must consider it.  However, in reality compensation is far more common.  Further, even if re-engagement is awarded some employers refuse to comply and opt to pay higher compensation instead.

In this case when considering remedy, the tribunal decided that Mr Kelly should be re-engaged to the role of Commercial Director, China. The tribunal also felt the trust and confidence issues arising from doubts about Mr Kelly’s capability were not so significant as to make re-engagement impracticable. This triggered a series of appeals with the decision to re-engage being appealed by the PGA (which was allowed by the Employment Appeal Tribunal).

Mr Kelly then appealed to the Court of Appeal where it was confirmed that the PGA’s genuine lack of belief in Mr Kelly’s capability to perform the role can (and did in this case) mean that it is not practicable for him to be re-engaged. It was noted that it may not be practicable for an employee to return to work where their employer lacks confidence in them due to their conduct or ability to do the job to the required standard. The court also held that there was no requirement to consider re-engagement to a vacancy which had arisen but had been filled prior to the remedies hearing.

Although, on the face of it, this could appear to be good news for employers, there are points to consider. Firstly, if the correct dismissal process is used this would significantly reduce the likelihood of such a remedy being sought or awarded. Secondly, we would caution employers from simply relying on a breakdown in trust and confidence as being the basis for arguing that re-instatement or re-engagement is not appropriate. Employers should always keep good written notes made at the time of the dismissal of any concerns around capability, conduct or any other breakdown in trust and confidence to use as evidence to support their position.