The Court of Appeal has ruled that, where an employee makes a successful appeal against dismissal, they are considered to be automatically reinstated even if this is not specified in the contract.

In Patel v Folkestone Nursing Home Ltd, the Claimant was dismissed for two charges of misconduct that amounted to gross misconduct. The Claimant exercised his right to appeal.

Upon appeal it was found that the first charge of misconduct was not proven, and this was dismissed. The Respondent overturned the Claimant's dismissal, but did not reach any finding as to the second, more serious charge. The Claimant decided that he could not return to work without the resolution of this charge and refused to return, subsequently claiming unfair dismissal.

In order to claim unfair dismissal, the Claimant had to prove that he was in fact dismissed. At first instance the Respondent argued that, having successfully appealed, the Claimant was reinstated and so had never actually been dismissed. The Employment Tribunal rejected this argument, finding that there was no reason to imply reinstatement if the employee's contract did not explicitly say that that would be the outcome of a successful appeal. The Claimant was subsequently successful in his claim of unfair dismissal.

On appeal, the Employment Appeal Tribunal overturned the original decision, and the Respondent made a further appeal. The Court of Appeal upheld the decision of the EAT. They found that, unless there was an express statement to the contrary in the contract, the effect of a successful appeal against dismissal was indeed to 'extinguish' the dismissal, as though it had never happened therefore effectively reinstating the employee. In this situation it meant that the Claimant's initial dismissal by the Respondent had in practice never occurred, and the Claimant could not rely on it in order to bring a claim for unfair dismissal.

However, the Court of Appeal did suggest that the Respondent's failure to properly resolve the issues surrounding the second charge before asking the Claimant to return to work could constitute a breach of the implied term of trust and confidence, meaning that the Claimant may be entitled to claim constructive dismissal. If it was found that the Claimant was constructively dismissed, he could then use that dismissal as the basis for an unfair dismissal claim (remembering that a dismissal can be both unfair and constructive they are not mutually exclusive sins). This issue was remitted to the Tribunal for deliberation.

The main thing for employers to take from this case is that any employee who successfully appeals against their dismissal will now be regarded as automatically reinstated unless there is a contrary provision in their employment contract. Any employer who wants to avoid this outcome should therefore undertake an urgent review of all their contracts and take advice accordingly.

It is also a useful reminder that failure to properly resolve an appeal could be grounds for constructive dismissal. Although a decision on this point was not determined here, by raising the issue the Court of Appeal clearly believes that there is potential for the argument to be successful, and so when an employee is successful in appealing their dismissal extra care should be taken to ensure that all outstanding issues have been investigated and concluded before the employee is invited to return to work.

This article was written by Ian Tranter & Matthew Todd. To contact our team directly to discuss the issues raised please email us or us the form provided.