Lucas v Chichester Diocesan Housing Association Ltd

Factual and Procedural Background

The Claimant was engaged as an ICT Co-ordinator under a contract described as a maximum 18-month engagement, initially for 25 hours per week, reducing over time. The contract was administered by Company B under funding from a public agency, with minimal supervision and concerns about project management and accountability. The Claimant raised concerns regarding alleged financial irregularities involving the misapplication of grant monies and premises rented outside the agreed area. Following these disclosures, the Claimant's working hours were reduced, and a strained relationship developed with a Project Development Consultant representing Company B, culminating in the Claimant's dismissal.

The Employment Tribunal found the Claimant was an employee entitled to one month's notice pay but rejected the unfair dismissal claim on the basis that the protected disclosures were not made in good faith but out of spite. The Claimant appealed this decision, contesting the Tribunal’s findings on both the contract terms and the good faith requirement. The Respondent cross-appealed on a damages calculation issue, which was dismissed by the court on estoppel grounds.

Legal Issues Presented

1. Whether the Claimant’s disclosures were made in good faith, qualifying for protection under the Public Interest Disclosure Act 1998 as incorporated into the Employment Rights Act 1996.
2. Whether the Claimant was engaged on a fixed-term contract entitling her to damages for the unexpired term, or on a rolling monthly contract terminable on notice.
3. Whether the Tribunal erred in its assessment of the reason for dismissal and the application of the good faith requirement.

Arguments of the Parties

Claimant's Arguments

• The Claimant asserted she was engaged on an 18-month fixed-term contract and entitled to damages for the balance of the term following early termination.
• She contended that the protected disclosures were made in good faith, motivated by genuine concerns about financial irregularities rather than personal spite or antagonism.
• The Claimant argued the Tribunal's finding of bad faith was perverse and unsupported by the evidence, highlighting the absence of linkage between her disclosures and the dispute over her working hours.

Respondent's Arguments

• The Respondent maintained the contract was a rolling monthly contract terminable on one month's notice, not a fixed-term contract.
• It argued the Tribunal's finding that the disclosures were made out of spite met the high threshold for factual findings and should not be disturbed on appeal.
• The Respondent submitted that if the Tribunal’s decision on good faith were overturned, the issue of causation for dismissal should be remitted to the Tribunal for further determination.

Table of Precedents Cited

Court's Reasoning and Analysis

The court first addressed the contractual issue, concluding the contract was not fixed-term but a rolling monthly contract terminable on one month’s notice. The court found the Tribunal’s approach consistent with the language of the contract and relevant precedent.

Regarding the protected disclosure, the court analyzed the chronology and evidence surrounding the disclosures made by the Claimant on 19 June 2003 and 3 July 2003. It found no evidential basis for the Tribunal’s conclusion that the disclosures were motivated by spite or personal antagonism towards the Project Development Consultant. The court noted the absence of cross-examination on this point and the lack of explicit allegation during the hearing.

The court emphasized that the Claimant’s disclosures concerned genuine, substantiated concerns about financial irregularities, which were accepted by the Tribunal. The court also highlighted the positive appraisal meeting on 23 June 2003 as inconsistent with a hostile motive. The Tribunal’s failure to consider this meeting was a critical oversight.

The court applied the principle that the burden remains on the employer to prove the dismissal reason and that serious allegations such as bad faith require cogent evidence, which was lacking here. Consequently, the court substituted its own finding that the Claimant’s disclosures were made in good faith, satisfying the statutory requirements.

However, the court acknowledged that the Tribunal had not made a definitive finding on the reason for dismissal. Therefore, the court remitted this issue back to the Tribunal for determination, allowing the parties to make submissions and the Tribunal to conduct a hearing if necessary.

Holding and Implications

The court ALLOWED the Claimant’s appeal on the issue of good faith and DISMISSED the Respondent’s cross-appeal regarding damages calculation.

The case is remitted to the same Employment Tribunal for a determination of the reason for the Claimant’s dismissal, in light of the court’s finding that the protected disclosures were made in good faith. No new legal precedent was established beyond clarifying the application of existing principles to the facts.