Summary Dismissal Provision did not Entitle Employer to Dismiss Without Notice for Minor Breach

An employer was not entitled to dismiss without notice for a breach of security rules, even though the employment contract contained an express provision entitling it to do so. The clause could not be construed as giving the employer the right to dismiss for any breach of security rules, however minor or inadvertent. 

In Robert Bates Wrekin Landscapes Ltd v Knight, K was employed as a gardener. His contract contained a list of circumstances in which he could be dismissed without notice, which included “any breach of the employer’s or customer’s security rules”. K worked for his employer at a Ministry of Defence site and was aware that under the customer’s security rules he could only remove property from site if he had a “property pass”. K was summarily dismissed after a bag of bolts from the site was found in his van. The reason for dismissal was given as theft and removing goods from site, contrary to protocol. 

K claimed wrongful dismissal, arguing that his employer was not entitled to dismiss him without notice. The employment tribunal upheld his claim, accepting K’s evidence that he simply forgot to hand in the bolts. It held that this did not amount to a repudiatory breach of contract entitling the employer to dismiss without notice.

The EAT upheld the tribunal decision. The clause in the employment contract did not entitle the employer to dismiss for any breach of security rules, however minor or inadvertent. Such an interpretation would fly in the face of the general understanding of employer and employee that, absent gross misconduct or gross negligence, an employee is entitled to notice. It would be absurd if an employee could, for example, be dismissed summarily because he forgetfully took a broken cup with him from the site. The clause only entitled the employer to dismiss for a serious and wilful breach or gross negligence. 

The question in a wrongful dismissal claim is whether the terms of the contract, either express or implied, have been breached. On the face of it, the employer had not breached the terms of the contract regarding termination without notice in this case The contract clearly stated that the employee could be dismissed for any breach of security rules. There was no requirement that the breach had to be serious or wilful. However, rules of contractual interpretation require a contract to be construed in its commercial context. The EAT held that the commercial context required the summary termination provision to be construed so that, in the absence of gross misconduct or gross negligence, the employee was entitled to notice. The employer could therefore only terminate without notice for a serious or wilful breach of the security policy or for gross negligence. This is a somewhat surprising decision. 

Had K been claiming unfair dismissal, rather than wrongful dismissal, it is likely that a tribunal would have found that the decision to dismiss, in circumstances where the breach was inadvertent, did not fall within the band of reasonable responses and was therefore unfair.