Read the full case summary below.
Case Number 2225272/2024 & 2225274/2024
Summary of the case
The Payne Hicks Beach Employment team, led by James Townsend, Partner and Head of Employment, supported by George Clough, Associate, successfully defended our longstanding construction client, P.J. Carey (Contractors) Limited (“Careys”), against claims for unfair dismissal and wrongful dismissal brought by two former employees, Mr Donal Coppinger and Mr John McInerney.
The pair had been working in senior oversight roles on the ‘Riverside project’ (“Riverside”), a multi-million-pound construction project in South East London, for which Careys had budgeted a £4.9 million profit.
During a meeting on 24 June 2024, it was discovered that Riverside, under the watch of Messrs McInerney and Coppinger, had gone grossly over-budget, and the financial projection had suddenly shifted from an expected profit to a multi-million-pound loss.
Both Claimants denied they had failed to scrutinise financial matters for which they were held responsible, with Mr McInerney arguing his involvement with Riverside specifically excluded the usual requirements of his role.
The Tribunal’s assessment was that the Claimants did hold responsibility for financial oversight of this Project in accordance with their written job descriptions: Mr Coppinger’s role as Regional Commercial Manager included reviewing cost monitoring, expenditure planning, reviewing analysis of cost performance data and providing accurate input for monthly performance reports; Mr McInerney’s responsibilities as Regional Director included ‘holding overall accountability for the region’s successful performance and delivery of all financial metrics, ensuring the region’s commercial positioning is strengthened, and margin and profitability maximised‘.
The Tribunal found that Mr Coppinger held a senior role with significant responsibility in relation to commercial aspects of projects, and that from September 2023 onwards, Riverside was an ‘appointed project’ within his role for which he held full responsibilities. The Riverside project was within Mr McInerney’s designated region and so fell within the remit and responsibilities of his role from 1 July 2023.
The Claimants had failed to properly report the financial realities and expectations of the project at monthly contract reviews, meetings which provided an opportunity to assess the status of the project, identify whether changes needed to be made, and determine whether steps could have been taken to mitigate risks.
The Tribunal found that Careys had no reason to doubt the overall picture of the project on the information with which they were presented at earlier monthly contract reviews by the Claimants and that the financial detail should have been scrutinised and highlighted in these meetings. When issues with the projections became evident, neither Claimant raised those concerns at the next contract review meeting, which was found to have been grossly negligent.
Claims
The Claimants brought claims for unfair dismissal and wrongful dismissal. They argued they had either been summarily dismissed in a meeting held on 24 June 2024, or, alternatively constructively dismissed when they later resigned on 9 July 2024, and that they were not paid notice pay contractually due to them.
Both sought substantial sums in compensation.
Careys denied liability, arguing that the Claimants were guilty of serious misconduct, that the Claimants were responsible for their dismissals through their contributory conduct and that any dismissal after 24 June 2024 (if found) would have been for this reason and could fairly have been without notice.
Success
The scale of the Claimants’ failure to scrutinise the financial position of the project in accordance with the responsibilities of their roles was considered a long-standing and ‘extremely serious failure’ by the Tribunal. The Claimants’ culpable and blameworthy conduct – failing to recognise and act on a misreporting of financial figures (seen in the sum of many millions of pounds, and ultimately over £14m) – was held to be the sole reason for the dismissals.
Therefore, the London Central Employment Tribunal dismissed the Claimants’ claims for wrongful dismissal on the basis that their conduct (from February 2024) amounted to gross misconduct and so Careys were entitled to terminate their employment without notice.
Whilst findings of procedural unfairness were made in respect of both Claimants (it being found they were sacked on the spot without any process on 24 June 2024), the Tribunal held that this, effectively, did not matter as both Claimants contributed to their dismissals through their actions and would have been fairly dismissed anyway. On this basis, neither was entitled to any compensation whatsoever.
Comment
The case was reported widely by the press, including in The Telegraph, Daily Mail and Construction News.
The case highlights the fact that a dismissal process that is not necessarily perfect does not always mean that a culpable Claimant guilty of gross misconduct should receive compensation for being dismissed.
If you would like to discuss any of the issues raised in this article, please do not hesitate to contact James Townsend or call 020 7465 4300
This article featured in our Winter edition of ‘IN CASE’, our Employment newsletter for HR Directors. Click here to read more or subscribe.
