Staff issues

Employment Tribunal insists we take back our fired chief executive

Governance | David Green | 1 Sep 2008

David Green responds to a beleaguered board which has been instructed by the Employment Tribunal to take back its fired chief executive.

Dear editor,

Dear board,

Your situation does indeed sound like a nightmare and at this late stage in the proceedings there are limited options available to you.

It is not clear from your letter when you received the tribunal decision but if it is less than 42 days ago you should consider seeking alternative legal advice to see whether you have grounds for appealing the decision itself.

However, assuming you are too late to appeal and as you clearly do not wish to take back your former CE, you have one other option which is to refuse to comply with the tribunal’s order on the grounds it is not practicable to do so. Orders for reinstatement are extremely rare and when making the order the tribunal will already have considered your arguments as to why it was not practicable for the order to be made.

As the tribunal was not convinced at the first stage, your task is more difficult at the second stage and you will need to be very clear as to why it is not practicable to comply, presumably because trust and confidence has broken down and you have a new CE. However, the tribunal will not take into account the fact that you have engaged a permanent replacement as a reason for non-compliance unless you can show it was not practicable to arrange for the CE’s work to be done without engaging a permanent replacement.

If the tribunal agrees it is not practicable, it will award the usual compensation. If not, the tribunal will make an additional award for non-compliance of between 26 and 52 weeks’ pay (subject to the statutory limit on a week’s pay of £330). It has a wide discretion in determining the amount which is not intended to reflect the individual’s losses but can take into account the employer’s conduct, eg whether there is a deliberate refusal to comply or a genuine reason.

Any ex gratia payments may also be taken into account. However, in order that an employer does not benefit from non-compliance with the order, the maximum limit on the compensation (currently £63,000) does not apply to the extent that it is necessary to reflect the amount of back pay the CE would have received if the reinstatement order had been complied with.

I hope it goes well at the tribunal.

Yours sincerely,

David Green is partner and head of employment and pensions group at Charles Russell

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