Unfair dismissal: did a company director have the right to disobey an instruction agreed by the other directors? Northbay Pelagic Ltd v Mr Colin Anderson: UKEATS/0029/18/JW
The Scottish appeal of Northbay Pelagic v Colin Anderson concerns a Respondent company, Northbay Pelagic, which had directors from associated shareholding companies. One of these directors was Mr Colin Anderson, the Claimant. He and his father, through their companies, had a minority interest in Northbay Pelagic. Mr Anderson was dismissed in 2016 for alleged misconduct. There were five grounds of dismissal:
- That Mr Anderson did not act in the best interests of the Respondent, as he had stopped contractors at the Respondent’s site using certain building materials belonging to his father’s company;
- That he disobeyed an instruction from the other directors not to correct a misreporting of the weight of certain fish to HMRC;
- That he failed to disclose the password of his computer to the Respondent;
- That he set up a covert camera in his office to monitor the Respondent; and
- That he attended the workplace after his suspension after being advised not to in his suspension letter.
The grounds of appeal
Ground 1 – Best interest of the respondent
Mr Anderson stopped the contractors from using the materials which belonged to Anderson Construction Ltd, a company owned by Mr Anderson’s father. The Respondents asserted that this meant he was acting in the interests of his father’s company over the Respondent company. However, the Tribunal ruled that Mr Anderson was, if anything, acting in the Respondent’s best interests, as Anderson Construction had a over the materials, and by preventing the contractors from using them, it allowed a deal to be struck whereby they could be used in future.
The EAT agreed with the Tribunal’s decision.
Ground 2 – Disobeying the instruction of the other directors
In a telephone conference, Mr Anderson was told not to pursue HMRC to correct a misreporting of the weight of certain fish which had been caught. Despite this, Mr Anderson saw to it that HMRC were alerted. The Tribunal concluded that dismissal on this ground had been unfair, as they interpreted that it could not be said that by advising HMRC of the correct weight, Mr Anderson had engaged in misconduct.
The EAT took a different view, ruling that, as it was an instruction from his fellow directors, Mr Anderson, although he disagreed with the Respondent’s direction, was bound to follow it. He was not at liberty either as director or employee to “do his own thing”.
Ground 3 – Failure to disclose his password
The Respondent also dismissed the Claimant because he failed to disclose the password for his computer to the Respondent. The password was not an email or internet password but the password that gave access to the computer he used at work and hence to information stored on it. The Tribunal concluded that this was insufficient to dismiss Mr Anderson, as he was not obliged to co-operate if he had reasonable grounds to be suspicious of the Respondent’s intentions.
Ground 4 – Covert camera
For much the same reasoning as ground 3, the Tribunal decided that the fact Mr Anderson had set up a covert camera in his office was not reasonable grounds to dismiss him, as he thought he was the only one with access, and was reasonably suspicious of the Respondent.
Ground 5 – Entering the premises
This ground fell away, as the Respondent agreed that parking his car on the forecourt did not constitute “entering the premises”
The EAT remitted back to the Tribunal to consider of new Ground 2.