The shock resignation of Sir Philip Rutnam, Permanent Secretary to Home Secretary Priti Patel, is tweaking the interest of not only those interested in politics but also employment lawyers.
Sir Philip’s statement to the media was short but strongly worded. He said that he had in the 10 days before his resignation been the target of a vicious and orchestrated briefing attack and that allegations that he had briefed the media against the Home Secretary were completely false.
He stated he had strong grounds to claim constructive unfair dismissal and would be pursuing that claim in the courts.
There is a statutory definition of constructive unfair dismissal in the Employment Rights Act 1996.
It is when the employee terminates the contract under which he is employed (with or without notice) in circumstances in which he is entitled to terminate it without notice by reason of the employer’s conduct.
The conduct in question is not just any poor conduct. The employer has to be in repudiatory breach of a fundamental term of the contract of employment. This may be just one significant act or it may be a continuing course of conduct over a period, culminating in a “last straw”.
When I explain constructive dismissal to clients I often liken it to treating your boyfriend or girlfriend so badly that they finish with you: they may be the one that actually does the dumping, but only because you were demonstrating by your conduct towards them that you did not care whether the relationship continued or not.
There’s no hard and fast test about whether there has been a repudiatory breach of a term of the employment contract.
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Each case turns on its facts. Sir Philip’s short resignation statement suggests that as far as he is concerned the repudiatory breach was the Home Secretary’s conduct over a short time period – the ten days before his resignation - in an experience he describes as “extreme.”
However, he also refers to evidence of a “wider pattern of behaviour”, saying: “I have received allegations that her conduct has included shouting and swearing, belittling people, making unreasonable and repeated demands - behaviour that created fear and that needed some bravery to call out.”
Interestingly, Sir Philip also revealed in his statement that he had been made an offer to settle, saying: “I know that resigning in this way will have very serious implications for me personally. The Cabinet Office offered me a financial settlement that would have avoided this outcome.”
Sir Philip’s salary, like that of all Cabinet Office high earners, is a matter of public record available on line. In 2019 his total pay ceiling was £194, 999.
In addition to any claim under his contract for his notice period or other contractual rights, his statutory claim of unfair dismissal has an absolute total value of £102,194.
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This is made up of a basic award calculated in the same way as a redundancy payment and capped at £15,750 and a compensatory award capped at £86,444. (The cap is set at an employee’s year’s gross pay so varies depending on what an employee earns but is also subject to a total cap of £86,444).
In other words, for Sir Philip, unfair dismissal compensation is at the very most the equivalent for him of a little over six months’ money, unless he also has a claim for whistle blowing or on the grounds of a protected characteristic where there is no cap on the possible award. However, given his carefully worded statement if he also had such a claim he might have been expected to say so.
In my experience, for most employees, employment tribunal matters boil down to money in the end. I have historically grumpily advised anyone who says they are pursuing a tribunal claim out of principle or to stop it happening again to anyone else to aim for a cheque not change.
So what size cheque might have been offered to Sir Philip? He said that the “serious implications” for him personally would have been avoided by the financial settlement offered by the Cabinet Office. That suggests to me an offer of more than six months money.
But the terms of that financial settlement would have prevented Sir Philip, no matter the level of his bravery, not only from talking about his own experience with the Home Secretary, but also the experiences of other employees that he believes were negatively impacted.
Following the Harvey Weinstein cases, extra caution is required of solicitors when drafting non-disclosure clauses to ensure they do not prevent or deter victims from reporting matters to the relevant regulatory body or any criminal matters to the police.
However, it would still have been perfectly possible to draft a legally enforceable settlement agreement that largely neutralised the threat to the Home Secretary’s career of Sir Philip calling out his experiences.
It seems, for now at least, that Sir Philip Rutnam’s tribunal claim is aimed at change not a cheque.
- Bethan Darwin is partner with law firm Thompson Darwin.