Directors of Jamie Oliver’s Fabulous Feasts sacked for "gross incompetence" were unfairly dismissed

Chadwick and another v Jamie Oliver’s Fabulous Feasts Ltd ET/2701128/11 & ET/2701129/11

Date added: 10 November 2011

unfair dismissal | gross misconduct

In this case, two directors were held to be guilty of “gross incompetence” in the way in which they ran a joint venture with Jamie Oliver Enterprises Ltd, but succeeded in claiming unfair dismissal because of procedural flaws in the disciplinary process. 

Practical tips

The company in this case failed to follow a fair disciplinary procedure as set out in the Acas code, despite the fact that its own disciplinary policy referred to the code. 

Where an employer has a potentially good reason to dismiss an employee – as was the case here – it should take the time to do things “by the book” and ensure that it does not turn what should be a straightforward disciplinary process into a tribunal defeat. 

Mr and Mrs Chadwick, the claimants, set up Chilli Pepper Ltd, an events-catering company, in early 2000. By mid-2008, they were attempting to raise additional funds, which they needed to pay their employees' wages, and spoke to Mr Harris, who at that time was the chairman of the Fresh Direct group of companies. He agreed to inject working capital into Chilli Pepper, and became a 50% shareholder. 

By early 2009, Chilli Pepper was losing money, and Mr Harris expressed his concerns to Mr Chadwick. With the claimants’ knowledge and approval, Mr Harris began discussions with the Jamie Oliver group of companies, as a result of which a new company, Jamie Oliver’s Fabulous Feasts Ltd, was formed as a joint venture. The company started trading on 1 April 2010, and Chilli Pepper’s event catering business transferred to it. The claimants’ employment transferred to the company, Mr Chadwick becoming the managing director and Mrs Chadwick becoming the business development director and the company secretary. 

The company did not start off well and, at a board meeting in October 2010, it was recorded that the year-to-date loss was £190,000 and that the gross margin on sales for the month was unacceptably low. Mr Harris emphasised the need for considerable improvement by mid-2011. At the November board meeting, the loss for October was not as bad as expected. 

The company had a presence at a “winter wonderland” in Hyde Park in December 2010. The claimants had forecast that the income at this event would be around £200,000, with a net profit of £42,000. In the event, the company made a loss of around £35,000. Mr Harris believed that this loss was due, principally, to the claimants’ mismanagement of the business. He considered that this was due to their losing control of the costs and that it showed a lack of ability to manage the staff. 

On one occasion, Mr Harris went in to assist the company. He noticed that the bins were overflowing and, when he asked Mrs Chadwick to sort out the problem, observed that she looked “shocked that she had been asked to do something so menial”. The company was a struggling small business, and Mr Harris expected the claimants to “roll up their sleeves” and do what was necessary to try to make it successful. 

Also in December 2010, the company’s operations manager resigned. Mr Harris asked the head chef why he had resigned, and was told that the problem was that senior staff were demoralised by Mrs Chadwick’s treatment of them, and by Mr Chadwick’s inability to deal with the issue. Mr Harris brought these matters to the attention of Mr Chadwick, who it appears did nothing to address matters. 

On 18 January 2011, the company received the company accounts, which showed a continued operating loss. Two days later, the claimants went on holiday. Mr Harris was concerned that neither claimant had raised the matter of the accounts with him before they went away, bearing in mind the seriousness of the company’s financial position. While the claimants were on holiday, the company’s head chef and head of logistics complained to Mr Harris about Mrs Chadwick. The head chef said that he would leave if the issues were not resolved. 

Between April and December 2010, the company had lost £344,000, and had lost a further £38,700 in January 2011. 

The claimants returned from holiday on 1 February 2011 and were called to a meeting with Mr Harris, who showed them details of the company’s finances from April to December 2010. Mr Harris said that, because of the financial situation – “the figures spoke for themselves” – the claimants would be dismissed. At the tribunal hearing, Mr Harris recalled that he had asked the claimants what their plans were to improve the business, saying that “he would have given them a chance” if they had come up with some ideas, but that neither provided any answers. The tribunal did not find this credible, and preferred the claimants’ version of events, which was that, had they been asked this question by Mr Harris, they would have produced a document showing a plan for the company. 

The claimants were summarily dismissed, and appealed. Mr Harris held a meeting with them to discuss the matter, but this was, the tribunal found, not an appeal hearing. Mr and Mrs Chadwick claimed unfair dismissal. 

The tribunal found that the reason for dismissal was the claimants’ gross incompetence. They had, for some considerable time, run their own business, and “were, or should have been, experienced individuals”. The tribunal found that the claimants had lost control of the company’s costs, and that they had caused problems with the staff. The claimants were unable to show that they could pull around the business in the short-to-medium term. 

Despite these findings, the tribunal held that the claimants’ dismissals were unfair. The company followed no proper procedure, and in particular did not follow the Acas code of practice on disciplinary and grievance procedures (PDF format, 1.58MB) (on the Acas website). The company had failed to carry out the basics of a fair procedure, and its procedural failings were so serious as to render the dismissals unfair. However, the tribunal held that there was a 75% chance that, had the company adopted a fair procedure, the claimants would have been dismissed in any event. The document that the claimants said they had wanted to give to Mr Harris at the dismissal meeting “would not have been sufficient” to satisfy the company that the finances would improve, and at the tribunal the claimants gave no effective response to the complaints by the staff. 

View the full transcript of the case 


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