In previous updates we have detailed the case of London Borough of Lambeth v Agoreyo, where the High Court decided that the employer’s decision to suspend an employee breached the implied term of trust and confidence. The employer appealed to the Court of Appeal, which recently overturned the High Court decision.
Ms Agoreyo was a teacher and was immediately suspended following allegations she had used physical force towards 2 children. She resigned and claimed breach of contract in the county court.
Overturning an earlier decision in the County Court, The High Court held that the school breached the implied term of trust and confidence, leading to Ms Agoreyo's constructive dismissal.
The High Court referenced that the school adopted suspension as "the default position" without seeking Ms Agoreyo’s response to the allegations made against her. It held that, according to previous case law, suspension is not a "neutral act" and a suspension must not be considered a routine response to the need for an investigation.
The Court of Appeal has now overturned the High Court decision and held that the proper test for the courts is whether or not the employer's decision to suspend was a "reasonable and proper" response to the allegations.
According to the Court of Appeal, it was obvious that the allegations of misconduct in this case were serious and needed to be investigated. The question was whether or not the employer’s response was reasonable and proper, so that the allegations could be investigated. If it was, then it could not be said that the employer breached the implied term of trust and confidence.
The Court of Appeal criticised the High Court's declaration that suspension is not a neutral act, it pointed out that The ACAS code of practice does not say this. The ACAS code merely confirms suspension should not be treated as disciplinary action and that this should be made clear to the employee at the point they are suspended. They went on to explain that whether suspension is to be viewed as a neutral act is not a relevant question nor a particularly helpful one.
Whilst the Court of Appeal overturned the decision in this case, they warned in certain cases it will not be reasonable to suspend and this still will amount to a breach of contract. Employers need to be aware of the wider circumstances beyond the fact and manner of the suspension, including events preceding the suspension and the extent to which the suspension was a "knee-jerk" reaction.
Implications for employers
The legal test in relation to suspension is now whether or not the decision to suspend is "reasonable and proper", and this will be assessed on a case-by-case basis. Based on the Court of Appeal’s decision employers should take into account the surrounding circumstances, including events preceding the suspension and the seriousness of the allegations. While a suspension should not be a "knee-jerk" reaction, it remains the case that the employer may be justified in suspending an employee when serious misconduct allegations come to light.
Given recent the case law, suspending an employee pending disciplinary action can be a tricky decision to make, so if you would like to discuss this further, please contact your dedicated employment solicitor.