A recent case has provided greater clarity over when it is appropriate to suspend employees who are subject to disciplinary action without risking breaching implied terms of employment.
A 2017 High Court judgment raised the risk that taking such steps as a “knee-jerk reaction” is likely to be a breach of the implied terms of trust and confidence in all employment relationships, giving rise to a claim of breach of contract or constructive dismissal.
The Court of Appeal ruling, which overturned the High Court’s judgment, whilst still serving as a caution to employers, reduces the risks for employers and provides greater clarity over what steps should be taken.
In this case, a teacher was suspended for the duration of an investigation into alleged instances of using physical force against students in her class with behavioural issues. The individual resigned the same day and brought a claim for breach of contract.
It was initially ruled that the school had reasonable and proper cause to suspend the individual, but the case was appealed to the High Court. The High Court claimed that suspending the individual was a “knee-jerk reaction”, and the facts of the case did not sufficiently establish that suspension was reasonable and necessary, breaching the implied terms of trust and confidence.
The Court of Appeal overturned the High Court’s judgment and claimed:
- It is not whether suspension is “necessary” but if there is “reasonable and proper cause” to suspend the individual in the circumstances;
- Suspension can constitute a breach of the implied terms of trust and confidence and give rise to a claim, but whether there is a breach should be looked at on a case by case basis; and
- The key issue is whether or not the employer was justified in suspending the employee on the particular facts.
It will often be justifiable for an employer to suspend an employee during an investigation, however taking the time to review all of the facts available and documenting the consideration that went into the issues will protect the company as far as possible from allegations of making a “knee-jerk” reaction.
Action: Give careful consideration to any grounds before suspension decisions including employee reputation and document.
