Earlier this month, the Court of Appeal handed down its much anticipated decision in the case of London Borough of Lambeth v Agoreyo. It was widely expected to answer the question, is suspension a neutral act but, in the end, it declined to do so. Instead it gave guidelines on when it may be a breach of contract by an employer to suspend an employee faced with disciplinary allegations against them.
It is common for employment contracts to contain a term which allows an employer to suspend an employee, on full pay, to enable serious disciplinary allegations to be investigated.
However, in such cases there will also be an implied term that the employer cannot instigate suspension unless it is exercising that right on reasonable grounds and for no longer than is necessary.
In some cases, an employee may be able to argue that this is not the case and therefore, the act of suspension is a breach of contract. However, all the surrounding circumstances in which the suspension was imposed will need to be considered.
The Acas Code of Practice on disciplinary and grievance procedures, states that, in cases where suspension is considered necessary, this period should be as brief as possible and kept under review, and that it should be made clear that the suspension is not considered a disciplinary action.
The Acas Code is supplemented by Acas guidance. In relation to suspension, this states that there may be instances where suspension with pay is necessary while investigations are carried out. For example:
- where relationships have broken down
- in gross misconduct cases, or
- where there are risks to an employee’s or the company’s property or responsibilities to other parties
What did the Court of Appeal say in this case?
Legal debate has previously raged around whether or not suspension can ever truly be a neutral act. The Court of Appeal has now said that: “….the question of whether or not suspension can be described as a neutral act is not a relevant or a particularly helpful one…” Instead it made the following observations:
- the only test is whether there was reasonable and proper cause to suspend the employee (in the previous decision, the High Court had been wrong to say the test was whether it was “necessary” to suspend the employee)
- in some cases the act of suspension will not be reasonable, and so will amount to a breach of contract
- a court may consider the wider context of suspension, including events preceding the suspension and the extent to which the suspension was a ‘knee-jerk’ reaction
It also commented that:
“…the ACAS Code of Practice provides no guidance as to whether suspension is a neutral act; it merely states that suspension should not be considered a disciplinary action.”