Royal Mail Group Ltd v Jhuti [2019] UKSC 55

Ms Jhuti, a Royal Mail employee on trial, made protected disclosures about her colleagues' improper conduct. Her line manager fabricated performance concerns leading an unwitting decision-maker to dismiss her. The Supreme Court held the hidden true reason, not the decision-maker's invented reason, constituted the reason for dismissal.

Facts

Ms Jhuti was employed by Royal Mail Group Ltd as a media specialist from 17 September 2013 on a contract with a six-month trial period. In November 2013, she made protected disclosures to her line manager, Mr Widmer, alleging that a colleague, Ms Mann, was offering Tailor-Made Incentives (TMIs) contrary to Ofcom’s guidance and the company’s own policy, thereby assisting Ms Mann to meet her targets and secure bonuses.

Mr Widmer responded by pressuring Ms Jhuti, during a four-hour meeting on 13 November 2013, to retract her allegations. He subsequently embarked on a sustained course of conduct intended to create a false impression that Ms Jhuti’s performance was inadequate: imposing excessive weekly meetings, bullying her, setting unachievable targets, and on 5 February 2014 imposing a performance improvement plan. Ms Jhuti repeatedly complained to HR that she was being managed out because of her earlier disclosures. She was signed off work with stress, anxiety, and depression on 12 March 2014 and did not return.

The company appointed Ms Vickers, who had had no prior involvement, to decide whether to dismiss Ms Jhuti. Ms Vickers was instructed to review the evidence rather than investigate afresh. She was not provided with Ms Jhuti’s original disclosure emails of 8 and 12 November 2013 or her HR complaints of February 2014. Ms Jhuti was too ill to attend the dismissal meeting. Ms Vickers, genuinely believing on the tainted material supplied that Ms Jhuti’s performance had been inadequate, dismissed her by letter of 21 July 2014.

Issues

The question of law identified by Lord Wilson was: In a claim for unfair dismissal can the reason for the dismissal be other than that given to the employee by the decision-maker? Specifically, for the purposes of section 103A of the Employment Rights Act 1996, where the decision-maker in good faith dismisses an employee on a stated ground (inadequate performance), but that ground has been fabricated by a manager in response to protected disclosures, is the reason for dismissal the invented reason of the decision-maker or the hidden reason of the manipulator?

Arguments

Appellant (Ms Jhuti)

Counsel argued that where a person in the hierarchy of responsibility above the employee has manipulated the decision to dismiss by constructing a false case, that manipulator’s reason should be attributed to the employer. Reliance was placed on the tribunal’s findings that Mr Widmer had deliberately set Ms Jhuti up to fail in response to her protected disclosures and had created a false evidential picture which Ms Vickers unwittingly adopted.

Respondent (Royal Mail)

The company argued that the tribunal was obliged to consider only the mental processes of the person authorised to take, and who did take, the decision to dismiss. It contended that section 47B of the Act, which confers rights not to be subjected to detriment on the ground of protected disclosure (including vicarious liability for the acts of other workers under subsections (1A)–(1E)), afforded an adequate remedy. It resisted any ‘stretching’ of the concept of ‘reason’ beyond that given by the appointed decision-maker.

Judgment

The Supreme Court unanimously allowed the appeal. Lord Wilson (with whom Lady Hale, Lord Carnwath, Lord Hodge, and Lady Arden agreed) held that the reason for Ms Jhuti’s dismissal was the making of protected disclosures, notwithstanding that Ms Vickers herself had believed she was dismissing for inadequate performance.

Lord Wilson reaffirmed the classic definition of reason for dismissal given by Cairns LJ in Abernethy v Mott, Hay and Anderson [1974] ICR 323, as approved in West Midlands Co-operative Society Ltd v Tipton [1986] AC 536, and endorsed Lord Reid’s dictum in Post Office v Crouch [1974] 1 WLR 89 that unfair dismissal provisions must be construed in a broad and reasonable way according to industrial realities and common sense.

The Court approached the issue as one of attribution, drawing on Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 2 AC 500 for the principle that attribution of a human state of mind to a company is context-dependent. In the ordinary case, the court need look no further than the reasons given by the appointed decision-maker. However, where a person in the hierarchy of responsibility above the employee has determined that the employee should be dismissed for a proscribed reason but has hidden that reason behind an invented reason which the decision-maker adopts, the court must penetrate the invention rather than allow it to infect the court’s determination.

The Court distinguished the Court of Appeal’s decision in Orr v Milton Keynes Council [2011] ICR 704, noting that it was not a satisfactory vehicle for articulating principle because the information withheld there was true background rather than a fabricated case, and attached only a narrow qualification to it. The Court rejected the company’s argument based on section 47B, noting that whistleblowers are not confined to remedies under Parts IVA and V of the Act and that comparisons between time limits and remedies did not justify an artificially narrow reading of section 103A. The tribunal’s findings were sufficient to determine the issue in Ms Jhuti’s favour without remittal, and Mitting J’s order in the Employment Appeal Tribunal was restored.

Implications

The decision establishes a narrow but significant principle: where a person in the hierarchy of responsibility above the employee determines that the employee should be dismissed for a proscribed reason (such as the making of protected disclosures) but hides that reason behind an invented reason which the decision-maker adopts in good faith, the true hidden reason is attributed to the employer as the reason for dismissal for the purposes of section 103A, and by extension other provisions in Part X of the Employment Rights Act 1996 which use the same statutory formula, including section 98.

The principle is deliberately confined. It applies to persons in the hierarchy of responsibility above the employee, not to fellow employees or unrelated colleagues. Lord Wilson acknowledged that instances of such dishonestly constructed reasons for dismissal will not be common and that on the facts of the present case the circumstances were extreme. Courts will generally need look no further than the reasons given by the appointed decision-maker.

The decision matters particularly to whistleblowers, who are protected from the circumvention of section 103A by managerial manipulation, and more broadly to employers, who cannot insulate themselves from liability for automatically unfair dismissal simply by appointing an uninvolved decision-maker where a senior manager has engineered a false evidential case. It also leaves open the related situation identified by Underhill LJ in The Co-Operative Group Ltd v Baddeley [2014] EWCA Civ 658, concerning manipulation by a manager with responsibility for the disciplinary investigation alongside the decision-maker, where attribution may similarly be appropriate. The wider importance of the decision lies in reinforcing that statutory employment protections must be interpreted in line with industrial reality and not defeated by internal corporate arrangements that obscure the true reason for dismissal.

Verdict: The appeal was allowed. The Supreme Court set aside that part of the Court of Appeal’s order which had allowed Royal Mail’s appeal and restored the order of Mitting J in the Employment Appeal Tribunal, holding that the reason for Ms Jhuti’s dismissal was that she had made protected disclosures and that her dismissal was therefore automatically unfair under section 103A of the Employment Rights Act 1996.

Source: Royal Mail Group Ltd v Jhuti [2019] UKSC 55