In the recent case of Milne v The Link Asset and Security Company
Limited, the Employment Appeal Tribunal (EAT) provided some
clarification as to when suspension of an employee can amount to a
fundamental breach of contract by the employer.

Mr Milne was employed by the Link Asset Security Company Limited. Mr
Milne had been suspended from employment pending a disciplinary meeting
in which conduct and capability issues were raised. Rather than attend
the second disciplinary meeting, Mr Milne resigned from his employment
claiming unfair dismissal based on constructive dismissal and the
whistle blowing provisions in the Employment Rights Act 1996. The
tribunal found in favour of the company and held that there had not
been a fundamental breach of Mr Milne's contract of employment as a
result of the suspension and the way in which disciplinary proceedings
were conducted.

Mr Milne appealed to the EAT arguing that the Employment Tribunal's
decision was perverse and that the suspension without justification of
an employee is a breach of the implied duty of confidentiality.
Although the EAT acknowledged the Employment Tribunal's criticisms of
the company for suspending Mr Milne prior to the disciplinary meeting,
for not investigating before the disciplinary meeting and for not
allowing Mr Milne to state his case fully, the EAT dismissed Mr Milne's
appeal holding that the threshold for perversity was very high and
there was "no overwhelming case" that no reasonable tribunal could have
come to the conclusion that there was no fundamental breach of duty.

Significantly, the EAT noted in its judgement that many Employment
Tribunals might have upheld Mr Milne's complaint. Although in this case
the suspension prior to disciplinary meeting did not amount to a breach
of the implied duty of trust and confidence, the EAT acknowledged that
suspension could amount to such a breach and that it was necessary to
look at all the circumstances including, what the employee was advised
were the reasons for the suspension, whether the employee continued to
receive remuneration, whether the employee's position had been filled
by someone else and whether the contract of employment required the
employer to provide the employee with work.

Although Mr Milne was unsuccessful in this case, the judgement
re-emphasises the importance of considering all the surrounding
circumstances when deciding whether to suspend an employee pending a
disciplinary hearing and the risk that an employee will resign during
the suspension and claim constructive dismissal. Indeed the guidance
from ACAS is that suspension should only be used where absolutely
necessary.

The Practical Law Company has outlined factors that employers should
bear in mind when deciding whether to suspend an employee as follows:

  • An employee should only be suspended in appropriate
    circumstances. This may be where there is a potential threat to the
    business or other employees or where it is necessary for a proper
    investigation of allegations.
  • The suspension should be no longer than is necessary.
  • Suspension pending a disciplinary hearing should not be used as
    punishment and suspended employees should be reminded that the outcome
    of the disciplinary hearing is not pre-determined.
  • The employer should consider the alternatives to suspension. This
    may be moving the employee to another department whilst investigations
    are being carried out.
  • There must be reasonable grounds for the suspension.
  • The employee should be informed of their suspension as soon as is
    possible. It is best practice to inform the employee at a meeting and
    to confirm the decision in writing thereafter.
  • The employee should not stop receiving his normal remuneration during the suspension.

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