Sticks and Stones: are insults a ground to dismiss?

When clients seek advice about an employee’s resignation, I will ask about the context of the resignation and whether it was “in the heat of the moment.” If so, there is established caselaw which states that employers would be wise to wait for the employee to “cool down” and allow them to decide if they really meant to resign. Only then should their resignation be accepted. With this in mind, what about heat of the moment use of language or insults? Should employers take a similar response before dismissing? We report on the recent Employment Tribunal case of Ms Kerrie Herbert v Main Group Services Ltd

The Facts: What Happened in Herbert v Main Group Services

The facts of this case are complicated with many of the events disputed between the parties. However, we know that Ms Herbert was the office manager for Main Group Services Ltd from 28 October 2018. Whilst her termination date was at issue, she had over two-years’ service. At the time in question, the Company employed six people. Ms Herbert reported into Thomas Swannell, Operations Manager and the Managing Director, Anna Swannell. Thomas and Anna were married, and Anna was also Ms Herbert’s sister-in-law. There was evidence to suggest that this was not a typical employer/employee relationship. For example, in 2021 Ms Herbert made several loans to the Company to help with its cashflow, and, in December 2021, she agreed to take a reduced salary for six months from £40,000 to £35,000. Also, in May 2022, Ms Herbert accessed a digital version of her employment contract and changed her salary back to its original £40,000 (the Company said later this was without their permission).

It was the events of 20 May 2022 to which attention is drawn. On this day, Ms Herbert said that she found documents in an office drawer concerning how much employing her cost the business. This, she said, upset and angered her. Evidence presented on behalf of Main Group suggested, instead, that Ms Herbert became aggressive and violent (she allegedly kicked a printer) in the office for no reason. Ms Herbert’s evidence was that she was convinced the Swannells wanted to dismiss her, so she arranged a meeting with Mr Swannell later that afternoon.

The Employment Tribunal accepted evidence from Ms Herbert that when she met with Mr Swannell, he raised concerns about her performance (for example, there had been a client complaint about her and also, he had concerns about her general office work – both of which had not been previously raised with her). An issue also was raised about Ms Herbert bringing her dog into the office and the time she spent on personal calls. A disagreement arose as to what was (and was not) in her job description. Ms Herbert became angry – as did Mr Swannell. The meeting was described at the Employment Tribunal as being “very heated” with Ms Herbert becoming upset and tearful. During this meeting, it was Ms Herbert’s evidence that she said, “If it was anyone else in this position, they would have walked years ago due to the goings on in the office, but it is only because of you two dickheads that I stayed.” (Ms Herbert was referring to Mr and Mrs Swannell.) Whilst Ms Herbert’s evidence was that her use of the word “dickhead” was intended as a joke, she said Mr Swannell responded saying “don’t call me a f*cking dickhead or my wife” and “that’s it, you’re sacked, pack your kit and f*ck off.” Mr Swannell disagreed with Ms Herbert’s account of the 22 May meeting. It was his evidence that he told Ms Herbert to take the weekend to cool-off, although he admitted to telling her to remove her dog bed from the office. Ms Herbert did not return to work.

The Dispute Over Termination Dates

After this altercation, Ms Herbert’s evidence was that she wrote to the Swannells and explained what had happened. She chased a number of times for a response and after some stonewalling, she received a letter from the Company dated 1 June 2022 headed “suspended from work”. She was then invited to different meetings – including a disciplinary meeting - by external HR advisers for the Company. The Company raised allegations which, it said, had come to light after the 20 May 2022 meeting concerning her failure to chase debtors, incorrect invoicing and amending her contract of employment without authorisation. Ms Herbert repeated her claim that she had been dismissed by Mr Swannell on 20 May 2022 and suspending her and proposing to go down a disciplinary investigation and procedure route was a “sham”. Ms Herbert did not engage with the external HR advisers’ letters or meeting requests. Main Group continued to pay her for July 2022. The Company wrote to her on 22 July 2022 saying that she was summarily dismissed. Ms Herbert brought a claim for unfair dismissal.

Whose dismissal was it anyway?

At the Employment Tribunal hearing, although Main Group tried to argue that there were concerns over Ms Herbert’s conduct and performance (which had not been previously raised with her), the case centred around the events of 20 May 2022 and whether she had been dismissed summarily on this date by Mr Swannell. Based on the evidence and facts of the case, the Employment Tribunal considered that Mr Swannell’s evidence about the meeting of 20 May 2022 was unreliable and so the judge accepted that she had been dismissed summarily on 20 May 2022.

Was the dismissal fair?

The next question was whether the Company had a sufficiently fair reason – as set out in the Employment Rights Act 1996 – to justify the dismissal on the grounds of gross misconduct. Whilst the Employment Tribunal accepted that the Company dismissed her based on her conduct at the meeting on 20 May 2022 and her “heat of the moment” behaviour, it did not accept this was a fair reason. Next, the Employment Tribunal considered the process (or lack of) on the part of the Company and concluded that the dismissal was also procedurally unfair. This was because the Company did not give her any prior warning, there was no attempt to follow the disciplinary procedure or allow her to put any evidence or mitigation forward. The Company had also not acted reasonably in all the circumstances, in treating Ms Herbert’s actions at the May 2022 meeting as a sufficient reason to dismiss. The judge accepted that she made a “one-off comment to her line manager about him”, that the comment was made “during a heated meeting” and that “whilst her comment was not acceptable there is no suggestion that she had made such comments previously” [see para 129]. The Employment Tribunal accepted that she had been dismissed unfairly for a one- off remark made within the context of a heated exchange.

The Employment Tribunal awarded Ms Herbert £29,130.31 in compensation.

Key Lessons for Employers: context, facts, and process

This judgment is based on its own individual facts, particularly given the family dynamic involved. Overall, regarding the dismissal, the Employment Tribunal judge preferred the evidence of Ms Herbert especially as she had contemporaneous evidence and her account of the 20 May meeting had not changed over the course of the proceedings. However, when it comes to language used at work – whether in the course of a workplace conversation or an intense argument between colleagues – context is key.

If this had been an argument between colleagues, rather than between a subordinate and manager, perhaps the outcome would have been different. Had the conversation been online or if there had been a pattern of inappropriate behaviour, perhaps this would have changed the outcome of the case. Had the language related to a person’s protected characteristic or been unwanted conduct of a sexual nature, if there was a “protected belief” or if there had been a background of bullying or previous conduct warnings, again the evidence and conclusion of the Employment Tribunal might have been different.

Although employers are able to dismiss for gross misconduct, such cases can be complicated and they should therefore take legal advice. Where the employer is seeking to justify summary dismissal for gross misconduct, this case is a reminder that in ordinary unfair dismissal cases brought under the Employment Rights Act 1996, the employer must be able to demonstrate it had a fair statutory reason to dismiss (e.g. for conduct) and that it followed a “fair” internal procedure prior to dismissing. This would include complying with the ACAS Code of Practice and internal policies. Moreover, in misconduct cases, Employment Tribunals must also consider the “tests” set out in BHS -v- Burchell [1978]. Taking these “tests” into account and thinking about fairness principles more generally, the employer would have to demonstrate that:

• it had conducted a reasonable and thorough investigation;
• it gave the employee the chance to state their case;
• the employee was warned of the possible conduct consequences;
• it ensured any decision makers were bias-free, and also that they had a reasonable belief in the employee’s “guilt” based on a reasonable investigation; and
• it gave the employee the chance to appeal.

The Employment Tribunal must also decide whether dismissing the employee in the way the employer did and for the reason it gave, was sufficient and reasonable in all the circumstances. For example, would a hypothetical employer presented with the same facts, which is of a comparable size and has similar resources to this employer, have acted in the same way and reached the same conclusion (the “band of reasonable responses” test). If not, the dismissal will be unfair. Other issues may come into play with conduct dismissals such as the extent to which the employee contributed to their dismissal and, when it comes to an unfair procedure, the likelihood that the employee would still have been dismissed had a fair process been followed, both of which might affect the level of compensation.

This case is also about evidence and making sure that contemporaneous notes are kept. It is also about dealing with issues as they arise and not trying to backtrack or investigate issues after the event.

Whilst employers must stop and consider whether an employee has acted “in the heat of the moment” when it comes to resignations, managers should be reminded to pause and reflect before dismissing to ensure there is fairness in all the circumstances.