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Summary Dismissal: fair game or foul play?

The High Court has dismissed a claim for wrongful dismissal brought against Sunderland Association Football Club Limited (the club). It held that the club was entitled to summarily dismiss its employee, Mr Farnan, without notice on the basis that he committed “serious and repeated breaches” of his service agreement in disclosing confidential information relating to the club.

Farnan v Sunderland Association Football Club Limited

Mr Farnan was employed by the club from August 2011, just as the football season was kicking off, as International and National Marketing Director. He was also to sit on the executive board of the club as a Director. His role was to raise the club’s international profile and attract a better quality of sponsors for the club than it had attracted in the past.

Mr Farnan entered into a service agreement with the club and was paid a salary of £190,000 per year. He was to work both at the club’s offices and at home. He was bound by confidentiality provisions and was not to communicate with the media without directing the matter to the club’s media and communications department. The club was entitled to terminate his employment without notice in the event of gross misconduct or serious or repeated breach of the service agreement.

By March 2013, the club was in the relegation zone and Martin O’Neill, then club manager, was sacked and replaced by Italian Paulo Di Canio. This was a controversial move and caused a media storm in which the club was criticised by some for appointing Di Canio, who had been accused of expressing strong right-wing views in the past. The appointment caused difficulty for Mr Farnan who was contacted by colleagues, journalists and the club’s shirt sponsor, all of whom expressed concern and wanted to know what was going on. There followed an email exchange on the subject between Mr Farnan and the club CEO, which Mr Farnan later described as a “watershed moment” and said that he felt ostracised.

Immediately afterwards Mr Farnan sent an email to David Milliband MP, ex-vice chairman of the club, saying that his time was up and that he had done his best. Later that day, he sent emails to some personal contacts in a bid to find another job, to which he attached a presentation that he had prepared during his time at the club as an example of his work. Around this time, as well as sending emails to his wife from his club email address, he started to “bank” documents belonging to the club at his home in case he needed to challenge the club at a later date regarding his employment. He was also contacted by a journalist and had what he thought was an “off the record” conversation with him, which was reported in the press the following day as an interview.

In May 2013 Mr Farnan was suspended whilst allegations of gross misconduct were investigated. He made an appointment to see his GP as he said that he was feeling physically and mentally exhausted, and was signed off work for 14 days. Each of the 28 allegations against him was supported by emails and evidence extracted from his phone. The evidence provided to him amounted to around 75 pages. Mr Farnan requested an adjournment of the disciplinary hearing but the club refused and it went ahead in his absence. He was summarily dismissed for gross misconduct. He appealed but the decision was upheld.

Mr Farnan brought a claim in the employment tribunal against the club, which was put on hold whilst the High Court proceedings were dealt with. The High Court proceedings were concerned only with contractual matters, namely notice pay and bonus, to be determined according to the terms of the service agreement.

Result – Fair Game!

The Court dismissed Mr Farnan’s claim in its entirety. The Judge said that Mr Farnan had committed serious and repeated breaches of his service agreement which entitled the club to terminate his contract without notice, and therefore he was not wrongfully dismissed.

However, out of 28 allegations that Mr Farnan faced at the disciplinary hearing, only a handful were sufficiently serious breaches to justify summary dismissal. The Judge accepted, to an extent, that the case against Mr Farnan had been trumped up by the club, and said that it was a pity that the club chose to pursue so many allegations as many were trivial breaches or not breaches at all. For example, sending a risqué a Christmas card with a picture of scantily clad women and a caption “Breast wishes for Christmas” was not considered a breach of contract.

Specifically, the Court found that the following allegations amounted to serious breaches entitling the club to dismiss without notice:

  • Mr Farnan was not entitled to “bank” club documents and emails at home. By his own admission this was to protect his own interests in the event of a dispute with the club; this was unauthorised and he was not justified in doing so.
  • Mr Farnan sent confidential information (a presentation relating to the club) to his contacts with a view to finding another job. This was for personal reasons and not in the club’s interests. He was not entitled to disclose confidential information with a view to promoting his future plans.
  • Mr Farnan spoke to the journalist without going through the club’s media and communications department. The interview that was published caused problems, particularly with the club’s shirt sponsor. The Court said that his conduct could not be excused.
  • Sending an email to a prospective sponsor confirming confidential sponsorship arrangements.
Comment

The Court in this case dealt purely with contractual matters and not the fairness of the dismissal (which will be considered by the employment tribunal). The case however highlights the importance of businesses having adequate protection in place to protect their confidential information both during and after employment, and also appropriate clauses to deal with termination of employment particularly for senior employees.

Whilst the process and ’fairness’ of the dismissal was not considered in any detail, the case still serves as a reminder that each allegation put to an employee in cases of misconduct should be reasonably investigated and an appropriate sanction applied following a disciplinary process: if an allegation is not sufficiently serious to warrant gross misconduct then it is unlikely that summary dismissal with be considered fair game.

If you would like any advice on contractual terms, disciplinary matters or policies and procedures or if you have any other employment law or day to day HR queries please contact Joanne Holborn, Tom Scaife or Caroline Rayner on 01228 552600 or 01524 548494.

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