UK: Can a Suspension Amount to Forced Resignation?

 

By Kate Potts and Raoul Parekh April 11, 2019
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​Suspending an employee during a workplace investigation is sometimes necessary. But before an employer decides to suspend a U.K. employee, it should consider several factors to reduce the risk of potential claims of forced resignation arising from the suspension. A recent U.K. Court of Appeal decision, London Borough of Lambeth v. Agoreyo, provides some helpful guidance.

Why Suspend?

During an investigation, temporarily removing an employee from the workplace can be useful for employers to:

  • Protect business information, assets and goodwill.
  • Preserve evidence.
  • Protect witnesses and manage relationship breakdowns.
  • Investigate a matter properly.

But employers should use caution when considering suspension, primarily because of the risk of claims for forced resignation, also known as constructive dismissal.

Constructive Dismissal

Under U.K. law, every employment contract provides that neither employer nor employee will act in a way calculated or likely to destroy or seriously damage trust and confidence (T&C) between the two.

Even though suspension is not a disciplinary action, it can so upset a worker that the employee might argue that the employer breached the T&C clause and forced his or her resignation.

If a claim of constructive dismissal is successful, the employee is owed all benefits under the employment contract, which may include a bonus. In addition, if the employee has more than two years' continuous service, he or she could bring an unfair dismissal claim leading to damages, which would be either the employee's annual salary or about 90,000 pounds (or US$120,000), whichever is lower. Damages could be higher if the employee can prove that the reason for suspension is related to whistle-blowing or discrimination.

[SHRM members-only toolkit: Introduction to the Global Human Resources Discipline]

Is It Reasonable and Proper to Suspend?

So, how can employers balance the risks of keeping an employee in the workplace during an investigation with the risks of breaching the T&C clause and facing a constructive dismissal claim?

In Agoreyo, the court confirmed that the correct test is whether a suspension was a reasonable and proper action in light of the investigation. Suspension does not need to be "necessary" to the investigation; if an employer can show that the decision to suspend is merely reasonable and proper, it will not have breached the T&C clause. If the suspension is not reasonable, it could amount to a breach of contract.

There is no automatic or unrestricted right for employers to suspend; employers must satisfy themselves in each case that suspension is the right step to take.

No Disciplinary Sanction

In the U.K., suspension is not a disciplinary sanction, although being suspended can make employees feel that a shadow has been cast over them, making it difficult to return to work.

Following the Acas Code (U.K. Advisory, Conciliation and Arbitration Service Code), when employers decide to suspend an employee, they should:

  • Clarify that the suspension is not a disciplinary action.
  • Review the terms of the employment contract to consider any process or guidelines.
  • Make the suspension as short as possible.
  • Periodically review the suspension so that it does not continue for an unreasonable period.

Kate Potts and Raoul Parekh are attorneys with Littler in London.

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