Case law updates

“Sham” investigation in director’s dismissal

A tribunal has found that the director at an auction house was subject to a “sham” investigation that resulted in him being unfairly and wrongfully dismissed,

Mr Palmer, one of three directors at Cavendish Philatelic Auctions (CPA), was subjected to a “contrived” disciplinary investigation after he accused a director at the Royal Philatelic Society (RPS) of sexual assault in 2021. The other two directors at CPA voted to continue working with the director despite Palmer’s allegation.

The claim against the RPS director caused a deterioration in his relationship with the other Directors who then  “manufactured” evidence of gross misconduct in an investigation. Palmer was then dismissed in April 2023.

Palmer began working as one of three directors at CPA in 2016.

In October 2022, at a Board meeting held to decide the future of the company’s London office, which Palmer managed, the other Directors  outvoted Palmer on the grounds that as he was the only person working there, it was commercially unviable. One of the other directors took minutes of the meeting recording that Palmer was tasked with finding another suitable London office. Palmer told the tribunal these minutes were falsified, and he had a different account of the meeting.

The tribunal agreed with Palmer that he had not been asked to find another office as the minutes showed the other directors had “negative feelings” towards him.

In March 2023 one of the other directors emailed Palmer to say that they had launched an investigation into his alleged misconduct. The Tribunal found that during and prior to the investigation, the directors had prompted family members and colleagues to send emails that raised concerns about Palmer’s conduct. 

On 27 March 2023, Palmer received an email request to attend a meeting to discuss “matters of concern that have been brought to the company’s attention”. Which he declined. In response, he was sent twenty three questions to answer as part of the investigation, to which Palmer did not reply. However the tribunal heard that the other directors had already decided the outcome of the investigation against Palmer by 22 March 2023.

On 5 April 2023, Palmer was invited to a disciplinary hearing, which he  refused to attend as he believed the other directors were determined to get him out of the company. The meeting took place in Palmer’s absence, and he was dismissed for gross misconduct.

The tribunal felt that Palmer’s behaviour could have justified dismissal, but as the investigation was  “determined to paint [Palmer] as obstinate, unproductive and deceptive come what may, even in the face of plausible explanations”, Palmer had been unfairly dismissed.