Labour & European Law Review Weekly Issue 458 24 February 2016
According to a decision by the High Court in Farnan v Sunderland Association Football Club Ltd, employees can be summarily dismissed for breach of contract involving the disclosure of confidential information. As a result, the claimant’s complaint of wrongful dismissal and breach of contract could not succeed.
Mr Farnan was employed under a service agreement which stated that he was entitled to a salary of £190,000 and a discretionary bonus. The agreement also contained provisions for termination of his contract without notice. As the club’s marketing director, he successfully secured a sponsorship deal with a South African conglomerate in May 2013, but when the club appointed a new manager with extreme right wing views, Mr Farnan began to have concerns that this would affect the sponsorship deal, and possibly cost him his bonus and his job.
As a result, he started sending a large amount of confidential club documents to his own and his wife’s e-mail addresses detailing the work he had done to secure the sponsorship deal. This included confidential board minutes. When the CEO became aware of this, she checked his e-mail account and found a number of e-mails which made personal comments about her. After an investigation, Mr Farnan was suspended for gross misconduct and subsequently summarily dismissed in June 2013.
He claimed damages for wrongful dismissal and unpaid bonus
Decision of High Court
The Court found that, as Mr Farnan did not have authorisation to send confidential information relating to the club to either his own or his wife’s e-mail address at home, he had committed a serious breach of his service agreement. In addition he had shared confidential information with third parties in an attempt to find new employment for himself which again constituted a serious breach of his agreement with the club.
Given these breaches, the club was entitled to rely on the relevant provision in the service agreement to dismiss Mr Farnan without notice. The judge also ruled that he was not entitled to claim a bigger bonus than he had already received.
Nor was he wrongfully dismissed, although the Court was critical of the club for “trumping” up their case against him and for pursuing so many trivial claims, alleging that they were breaches of his agreement. For instance, an allegation that Mr Farnan had sent a lewd Christmas card from his club e-mail address to members of his family and a friend.
The judge pointed out that, although the card might cause offence in some workplaces, she could not ignore the fact that Sunderland had supported the chief executive of the premier league when he was found to have sent both inappropriate and sexist e-mails. In fact, the chief executive of Sunderland had issued a press release at the time saying that she was delighted that “common sense had prevailed”. She had also in the past all but ignored a sexist birthday card sent by a co-director to Mrs Farnan.