The case of Williams v Leeds United Football Club highlights that in principle there is no limit on the length of time that can pass between an employee’s gross misconduct and their dismissal without notice, if in the interim period the employer was unaware of the employee’s wrongdoing.
This was a High Court, breach of contract (wrongful dismissal) claim, rather than a statutory employment tribunal claim (for example unfair dismissal) where different legal principles apply. In many senior executive termination disputes, the critical financial issues between the parties turn on the question of whether as a matter of contract law the employer was entitled to dismiss the employee without notice for gross misconduct or other repudiatory breach of contract or whether the executive was entitled to notice of termination.
The facts of the case
The Claimant was employed in a senior management post as Technical Director of Leeds United (“the Club”). The terms and conditions of his employment were never documented but at the outset he negotiated them with the Club’s then chairman. They agreed a gross annual remuneration package worth in the region of £230,000 and a 12 month notice period. Seven years later, as part of broader personnel changes connected with a change of ownership at Leeds, the Club decided to carry out a senior management restructuring. Mr Williams was given three months’ notice of redundancy on 23 July 2013 (the employer argued that the original verbal contract terms no longer applied, and that instead in accordance with their standard senior management terms and conditions, the applicable notice period was three months).
One day later, the Club wrote again to the Claimant informing him that he was required to attend a disciplinary hearing. He was accused of gross misconduct. The key allegation for which he was dismissed without notice and on which his claim ultimately turned concerned an email attaching pictures set in the showers of a football club. The Claimant’s counsel contended they were not “hard-core pornography” but the Court found they could be characterised as obscene and pornographic. The subject line of the email read “Looks like dirty Leeds!!” Fans of English football will immediately recognise this was a play on words, Leeds having been labelled “dirty Leeds” by opposing fans since their glory days in the late 1960s and early 1970s. The Claimant was alleged to have forwarded this email from his work email account some five and a half years earlier to a friend in football working at another club.
The Court dismissed the Claimant’s wrongful dismissal claim for damages. It did so notwithstanding the following:
- The five and a half year gap between the sending of the email and the gross misconduct dismissal. This did not prevent the Club from relying on a breakdown in their trust and confidence in the Claimant to justify his summary dismissal when eventually they discovered his misconduct. In the absence of a written service agreement recording the Claimant’s terms and conditions of employment, the Club’s case was based on the implied term of mutual trust and confidence.
- The evidence indicated that well in advance of the initial notice of termination for redundancy, the Club decided to investigate the Claimant and other senior managers, seeking evidence to justify their dismissal for gross misconduct in order to avoid responsibility for notice and redundancy payments. For that purpose the Club engaged a firm of forensic investigators.
- Further, before the initial notice of termination for redundancy was given to the Claimant, the Club had resolved not to pay him any notice or redundancy pay in any event. Emails between the then MD and CEO showed they were aware this placed the Club in breach of contract. The Court found that “where, as here, there is repudiatory breach of contract… by the employee, and there has been no affirmation or waiver of the repudiatory breach [by the employer, then it]… is not prevented from relying on that breach as justifying summary dismissal because it had itself decided to breach its contractual obligations or was looking for a reason to justify dismissal or was motivated by its own financial interests”. It should be noted that the Court found that the Club only became aware of the email after serving the original notice of termination for redundancy on the Claimant: had the Club known about it before, the act of serving notice of redundancy would have amounted to an affirmation of the contract and waiver of the Claimant’s breach.
- The Claimant was never given copies of or made aware of the Club’s policies on email and Internet usage, or its disciplinary procedure. Given his seniority and the nature of his position in a high profile industry, the Court held that there had been no need for the Club to flag to him that its email system should not be used to send obscene and pornographic images.
- In the course of the proceedings, the Club amended their defence. They accepted that the applicable notice period, absent gross misconduct or other repudiatory breach by the employee, had always been 12 months, not three as argued at the time of the redundancy consultation process. Further, by then the Club had discovered that in fact the Claimant had forwarded the offending email separately to three people on the same day, and not only to one as originally thought. It was accepted that the Claimant had simply forgotten he had sent the email three times. The important point was that one of the three recipients of the email was a female employee of the Club who was considerably junior to the Claimant. The Claimant provided an explanation for why she would have appreciated the play on words “dirty Leeds” in the email, but the Court found that there could be no reasonable explanation for the sending of the email to her. The long standing rule from the 1888 case of Boston Deep Fishing was held to apply (this allows an employer in a wrongful dismissal claim to justify dismissal by reference to an employee’s conduct even if it did not know about it at the time of dismissal).
Cases like this turn are highly fact sensitive. Here, a combination of factors undermined the Claimant’s case (notably the sending of the email to a junior female employee, the seniority of his position, and the potential for adverse media interest and concern on the part of the Club’s commercial sponsors had the matter come to the attention of the press at the time). It is also worth remembering that there remains considerable concern about the culture of professional football: see for example this recent report by the BBC on sexist chanting at games, which mentions a number of high profile cases of sexism in football in recent years. Women in Football, supported by Everyday Sexism, have launched a campaign aimed at tackling sexism in the game and this and other campaigns have been trending on social media.
In the circumstances, the result in the Williams case was therefore unsurprising. Employers should not conclude from it that the sort of tactics deployed in the restructuring process at issue will usually result in no legal liability or judicial criticism, as happened in this case. Senior executives should take note that just one act of gross misconduct, only discovered years later, can have serious career consequences.
About the author
Andreas White’s areas of specialism include employment litigation, senior executive contracts and severance arrangements, employee competition (confidentiality, restrictive covenants, garden leave and team moves), boardroom and partnership issues, redundancies and restructurings, bonuses, internal investigations, discrimination claims, whistleblowing, TUPE and business transfers.
With a keen interest in the overlap between employment law and financial services regulation, he advises clients from the financial sector on remuneration arrangements and sensitive issues relating to whistleblowing, regulatory investigations and criminal proceedings. Andreas is equally experienced in acting for employers and senior executives, allowing him to understand the issues and tactics on both sides of the table.