Friday, June 17, 2011

Alex McLeish - Blose to Villa - An Update

It would appear following Alex McLeish's appointment as manager of the prestigious former European Cup winners Aston Villa that their less illustrious local rivals Birmingham City are indeed intent on bringing proceedings to claim compensation.

Theoretical Defendants in such proceedings could be McLeish himself and Aston Villa.

The basis upon which "Big Eck" (as he is apparently affectionately known in some quarters) would potentially be liable would be for breach of contract. It is understood he had 2 years left of his fixed term contract and in the absence of him being entitled to leave before the expiry of that term he would be in breach and liable to compensate Small Heath (as Birmingham City were originally known and which some might uncharitably argue would be an appellation more befitting their position in the football heirarchy) for any loss they suffered as a result.

As mentioned in my previous Post, McLeish is alleging constructive dismissal. The effect of a fundamental breach is to repudiate (i.e. destroy) the contract if the person on the receiving end decides to treat the breach as absolving him from any further performance of the contract. He will therefore no doubt say that he is not in breach of contract as he chose to leave because of the alleged breaches by "the Blues."

Aston Villa would be liable if it were shown that they had intentionally induced or procured McLeish to breach his contract (i.e. encouraged him to resign from Birmingham when it would be a breach of contract to do so.) It would not be inducing a breach of contract if it were shown (and it must be remembered that Villa deny emphatically having played any part in McLeish's decision to resign) that someone had advised or encouraged McLeish to exercise his right to resign in response to a fundamental breach by his employer, or had told him that there might be a vacancy available for him if he exercised that right.

Whilst a trial of these matters would be fascinating from an employment law perspective, sadly one suspects that peace will break out before too long on the basis of some sort of compromise settlement, and we can all then concentrate on the long wait for the next football season.

Thursday, June 16, 2011

Alex McLeish - Blose to Villa - An Employment Lawyer's Perspective

Much heat has been generated in the Second City over the resignation of Alex McLeish as manager of Championship club Birmingham City and the fact that he appears set to take over at their Premier League neighbours Aston Villa.

Allegations have been made of "tapping up" and Birmingham's second club have said they will be demanding compensation from their considerably more illustrious rivals in the event that McLeish does become Villa manager.

According to Birmingham, there is a clause in McLeish's contract which entitles them to £5.4 million compensation in the event of early termination of his contract (there were 2 years remaining when he resigned.)

The League Managers Association have said that McLeish's resignation by email on Sunday, with immediate effect, was because his position had been made untenable by the alleged behaviour of the board.

In the event that McLeish's employers were in fundamental breach of his contract of employment he, like any other employee, would be entitled to treat that breach as repudiating his contract. In those circumstances he would be entitled to resign without notice and any clauses in his contract providing for compensation or restictive covenants against working for a competitor would on the face of it be null and void and McLeish would be, as Villa claim, a "free agent."

Provided that he could show that the reason for his resignation was the alleged fundamental breaches and not simply the lure of managing a club that counts the European Cup and not the Autoglass Windscreen Shield as its crowning achievement he could in theory at least bring a claim for constructive dismissal.

McLeish is apparently alleging that details of his contract were disclosed without his permission and that his chief scout was sacked without discussion with him and in circumstances where the person in question discovered their fate by being copied into an email.

These allegations have been denied but if they were true then they would seem at face value to potentially amount to breaches of the implied contractual term of mutual trust and confidence. An employer must not without proper cause behave in a way which is intended to or likely to have the effect of destroying or seriously damaging the relationship of trust and confidence. Any breach of this implied term is a fundamental breach.

Even if the law of the land has not been broken there are of course FA and Premier League rules to consider but if press reports today are to be believed the perennial non-achievers from St Andrews were having second thoughts about whether they would pursue a complaint against the West Midlands' flagship club in view of the difficulties of proving McLeish had been the subject of an illegal approach.

Wednesday, June 08, 2011

Capability Dismissal - Return of the Burchell Test

The Employment Appeal Tribunal has handed down a Judgment confirming that the well-known "Burchell Test" that applies to dismissals for misconduct also applies to ill-health dismissals.

"Burchell" is probably the most famous unfair dismissal case. It states that the test of whether a dismissal for misconduct is fair is not whether the employee was guilty, but whether the employer genuinely believed that they were, had reasonable grounds for that belief and had arrived at it after a reasonable investigation.

Mr Doolan was dismissed from his employment after a period of work-related stress because his employer concluded, after obtaining reports from a Doctor and an Occupational Pyschologist, that he was not capable of returning to his previous "safety critical" job.

He had expressed the view himself that he was fit to go back to work and even said that he would be more than happy to go along with a capability dismissal procedure if he had any more time off.

The Employment Tribunal found his dismissal unfair. They called into question the circumstances in which the Occupational Psychologist had reported and said that a reasonable employer would not have preferred her report to that of the Doctor or have turned down his offer to return to work on the basis that any further absence would lead to dismissal.

The EAT overturned this and said that the questions were whether the employer genuinely believed he was unfit to return, whether they had reasonable grounds for that conclusion and whether they had carried out a fair investigation. The answer to all 3 questions was "yes." Another case was referred to that seemed to suggest an obligation to ascertain the "true medical position" but the EAT held that this did not impose any stricter obligation than Burchell.

The decision as to whether the employee could return to work was for the employer and not the people who prepared the medical reports and provided the employer made a reasonable decision in the light of those reports that was their prerogative.

The finding of unfair dismissal was therefore overturned and the case was referred back to a fresh panel at the Employment Tribunal to rehear the case, applying the correct test.

The case is reported here.

It is a useful reminder that the function of the Employment Tribunal is to review employers' decisions and make sure that they are "within the range of reasonable responses" and not to micromanage employment issues by imposing their own opinion of the right thing to do in a difficult case.