Please explain …

22 May 2012 |

An employer can hold an employee to account, a recent case confirms.

Mr Garvin was employed as CEO, a new position for a small growing company, Progressive Equipment Limited.  It was agreed that he needed to produce a business plan for the company, particularly in relation to marketing a new machine.  The business plan was expected a few weeks after Mr Garvin started work on 13 September 2010.

By mid December 2010 there was no sign of the business plan.  The Managing Director let Mr Garvin know he was unhappy about this and Mr Garvin said he would have it done in January 2011.  On 7 February 2011 the Managing Director asked Mr Garvin for a completed 5 year business plan and a list of 20 sites with potential to use the machine and plans for meeting those potential clients.

On 9 February 2011 the Managing Director tried to give Mr Garvin a letter calling Mr Garvin to account for his performance at a meeting with the directors on 11 February.  Mr Garvin claimed he was feeling ill and went home, so he didn’t get the letter until 10 February.  The letter raised a number of specific concerns about his performance over the five month period of his employment, and asked him to explain.  He was given most of the working day on 10 February to prepare a response.

On the morning of Friday 11 February Mr Garvin chose to give no response and instead asked for more time.  He suggested postponing the meeting until Wednesday 16 February.  The directors agreed to postpone until Monday 14 February at 9 a.m..

On Sunday evening Mr Garvin resigned by email.  The Managing Director invited him to reconsider and encouraged him to come to the meeting on Monday morning.  Mr Garvin confirmed his resignation by email on Monday morning.

The Authority agreed that Mr Garvin would have needed more time to reply to some of the matters in the email, but other matters, like the business plan, he could and should have been able to answer in the time available at the first meeting on 11 February.  He then had most of a second working day, 11 February, and the weekend to prepare for the meeting on 14 February.

Mr Garvin gave evidence in the Authority of the explanation he would have given if he’d had a reasonable opportunity to do so.  But he also said that he prepared this explanation mainly over the four day period 10 to 13 February which tended to confirm that he had been given enough time to respond.

The company did not intend Mr Garvin to resign.  And there was no breach of duty by the company so serious that Mr Garvin’s resignation was reasonably foreseeable.  The directors only wanted him to account for his performance as their CEO.  Mr Garvin’s resignation was just that, and not a constructive dismissal.

Prepared by Lesley Brook