January 30, 2015

Successful Appeal Against Dismissal Automatically Revives Employment Contract

In Salmon v Castlebeck Care (Teeside) Ltd & Anor UKEAT/0304/14, the Employment Appeal Tribunal (EAT) considered whether a successful appeal against a decision to dismiss needed to be communicated to the employee in order to revive the employment contract.

Mrs Salmon was dismissed for gross misconduct. She appealed that decision under her employer’s contractual appeal procedure but before her appeal was heard, her employment transferred to a new employer under TUPE.  The new employer heard the appeal and upheld it. However, it did not make any express decision to reinstate her or to inform her that she was reinstated. Mrs Salmon brought an unfair dismissal claim against the new employer. It was rejected at first instance as the Employment Tribunal found that she had never been an employee of the new employer. On appeal, the EAT overturned this decision, holding that a successful appeal under a contractual appeal procedure automatically revives an employment contract, unless it expressly states otherwise. This does not require a separate decision to reinstate to be taken or for such decision to be communicated to the employee. As such, Mrs Salmon’s employment contract had been revived by her successful appeal, her employment had transferred to the new employer and she could bring her claim against that employer.

Employers who will be inheriting employees following a TUPE transfer need to ensure that they undertake adequate due diligence on the existing and former employees of the outgoing employer, and seek appropriate warranties and indemnities in the transfer documentation.

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