Topic 5: Job Security and business reorganisations Flashcards
What is summary dismissal?
Dismissal without notice
What is unfair dismissal?
- Statutory dismissal action
- brought by the employee
- subject to qualifying conditions
What is wrongful dismissal?
- Common law dismissal action
- worker
- employer has terminated his emploer in breach of contract
- Claim can be brought in civil courts if worker or ET if an employee (remedy of damages is capped at £25,000 - but no cap in the civil courts).
What is dismissal in the context of an EA 2010 claim?
- Brought by an employee (as defined in the EA).
If dimissal is discriminatiory and arises from prohibited conduct because of a PC = s39.
There is no continuity rules or formal ceiling on damages s124.
Can an employee claim unfair dismissal (if there was an economic dismissal), if the reason for redundancy by the employer when dismissing, or the procedure that followed is flawed or unlawful?
Yes
It is also possible to bring a claim under the EA, if it is alleged that the redundancy decision or procedure follow is directly or indirectly discriminatory because of a protected characteristic.
Difference between Wrongful dismissal and unfair dismissal?
- WD based on breach of contract (applies to workers as well as employees) - not an evaluation of fairness of dismissal – action in ET or civil courts
- WD no qualifying rule - workers must use civil courts – contract claim – employees can go to ET or civil courts
- UD limited to qualifying employees – 2 years continuity
- UD based on reasonableness of the decision to dismiss for the potentially fair reason in question – ET
- UD - 3 month limit for claims; WD – 6 years in civil courts
- UD – cap on compensation (lower for most employees) – no cap on damages for WD
More Difference between Wrongful dismissal and unfair dismissal?
- limited to employees – ERA s94(1) - contrasts with claims for wrongful dismissal which, based on the contract, can be brought by workers as well as employees. (Note that under the 1994 Extension of Jurisdiction Order only employees have the right to bring a wrongful dismissal claim in the ET; a worker would have to litigate his/her claim in the civil courts).
- subject to continuity rules - qualifying period of two years in most cases: ERA s108. Contrast that with wrongful dismissal claims and EA claims which have no continuity requirement.
- normally subject to a three-month time limit for bringing claims. By contrast wrongful dismissal claims are subject to the normal limitation periods for contract actions (6 years) unless they are litigated in the ET in which case a three-month time limit will also apply (1994 Extension of Jurisdiction Order, Art 7).
- subject to a cap on the compensatory award. There is no cap on the amount awarded for breach of contract in a wrongful dismissal action or in respect of an EA claim.
With Resignation, can the contract provide a longer period of notice?
in the case of workers the notice period if always determined by the contract.
Delaney v Staples
- the employee is entitled to be paid during the notice period:
If not paid, this is an unlawful deduction under those wages provisions and a claim can be brought before an ET or a debt action at common law. Employer can waive the notice but must pay in lieu.
‘constructive dismissal’
if the employer commits a repudiatory breach of contract, the qualifying employee is entitled to resign without notice, ERA s86(6) -
- giving rise to a claim for unfair dismissal and/or discriminatory dismissal
Summery dismissal
If employee resigns without notice for no good reason, this is a summery dismissal and the employer does not need to pay them.
Unfair dismissal - which court can it be brought?
Only before an ET.
If ET finds it unfair, they will award a statutory remedy (in most cases compensation). The employer can dismiss but they must do so fairly. It is mandatory in that it is unlawful for an employer to exclude unfair dismissal by a contractual term.
Preliminary steps to take when discussing unfair dismissal?
- Only available to employees, s94
- Qualifying period, s108 – 2 years continuous employment required unless employee can show that the dismissal was for an “automatically unfair” reason
- Claim for unfair dismissal brought before an ET
- Three month (s111) to bring a claim.
Who can bring a claim for unfair dismissal?
Only qualifying employees
Subject to the qualifying conditions, what are the five main questions to be asked by an ET in an unfair dismissal claim
DAPRR
- Has the employee been dismissed?
- Fact of dismissal – not looking at fairness.
- Is the reason for the dismissal one that is automatically unfair?
- Look for automatically unfair reason, if there is an automatically unfair reason you skip the next two stages and go to stage 5.
- Has the employer shown a potentially fair reason for the dismissal?
- Burden on proof on employer to show this. Misconduct/reundarncy is a potentially fair reason.
- If there is a potentially fair reason, has the employer acted reasonably or unreasonably?
- Only here we look at fairness. Legislation has been read as a reasonableness. Finding of fact by tribunal. In addition to substantive action by employer (such as redundancy), employer might fall down because it was procedurally unfair (not given employee a chance to explain actions),
- Substantive and procedurally fair.
5) What remedies are available to the employee who has been unfairly dismissed?
Martin v MBS
CA
the burden of proof is on the employee to show there has been a dismissal.
“Whatever the respective actions of the employer and employee at the time of termination, the question always remains ‘who really terminated the contract of employment?’”
- If there is such as a big argument, one party says you are fire, another says you resign. In this situation, the test is: This will be a finding of fact by the tribunal
Sothern v Franks
this concerned a partnership secretary in a solicitor firm who said “I am resigning” in an ongoing dispute.
CA in absence of other evidence, then the natural meaning of the words could not be overridden by what a reasonable employer would have assumed. Therefore, if you do say I am resigning, -you are judged by the standards of the reasonable employer.
Fox J - The essential question in the case is the meaning to the given to those words. Are they ambiguous or are they unambiguous? The Industrial Tribunal, as I have mentioned, held that if the words constituted a resignation in unambiguous terms that was the end of the matter. = ambiguoity is important
He accepted that there might be exceptions: ‘this is not a case of an immature employee, or of a decision taken in the heat of the moment, or of an employee being jostled into a decision by the employers.’
Relevant:
- Sothern was not an unexperienced employee; and
- this was not in the heat of the moment.
Kwik -Fit v Lineham distinguished
Kwik-Fit v Lineham
An employer may not be able to rely upon a resignation made by an employee which had obviously been made in the heat of the moment. Constructive dismissal might still be a possibility.
- If words are unambiguous then prima facia, employer is entitled to treat them as such, but personalities are an important consideration
- Words may be spoken or actions expressed in temper or in the heat of the moment or under extreme pressure (‘being jostled into a decision’) and indeed the intellectual make-up of an employee may be relevant: These we refer to as `special circumstances’.
- Where `special circumstances’ arise it may be unreasonable for an employer to assume a resignation and to accept it forthwith. A reasonable period of time should be allowed to lapse
Different from Sothern:
- threw keys on the counter and drove off, the next day he asked for outstanding wages and said he would go to a tribunal.
Facts:
Employee at kwik fit was manager of the garage and on the way home he popped into the office and used the toilet. He was seen and employer decided to issue him with a written warning in front of all his colleagues, he reacted badly, he threw down his keys on the counter and drove off. The next day he asked for his outstanding wages and said he would go to tribunal. Was employer entitled to treat this as a resignation. Held: no.
Employer should have allowed a reasonable time this was the heat of the moment should have made further enquiries as to whether resignation was intended.
Western Excavating v Sharp
CA
Constructive dismissal - Must be evidence of repudiatory breach of contract by the employer. The employee must have resigned in response to that breach and employee must not have waived or affirmed the breach – leading case
test for constructive dismissal is a contractual test
Denning - “significant breach going to the root of the contract of employment, or which shows that the employer no longer intends to be bound by one of the essential terms of the contract, then the employee is entitled to treat himself as discharged from any further performance”.
- Because it is a contract test and link between conduct and resignation (constructive resignation), it is a causation test that must be shown: denning shows the causal link
Buckland v Bournemouth University
CA
test for constructive dismissal is a contractual test not a reasonableness test – once a repudiatory breach has been committed by the employer it cannot be “cured” – it is up to the employee to affirm or reject it – could delay resigning until after internal inquiry. Can delay their resignation so long as there is still a causal link.
Facts:
Buckland (professor) was a harsh marker and failed students who took his course,the exam papers were then moderated and some marks changed. Buckland thought this process had undermined his authority and breached the implied term of mutual trust and confidence in his employment. The tribunal agreed. Buckland waited until internal enquiry which university organised. The enquiry criticised conduct of the colleagues, he resigned anyway. CA held: once a repudiatory breach has been committed it is up to injured party to decide whether or not to terminate contract or affirm.
Jacob LJ dissented in part, finding that a party could not cure a repudiatory breach: ‘I do not share Sedley LJ’s regret in holding that a repudiatory breach of contract, once it has happened, cannot be ‘cured’ by the contract breaker. Once he has committed a breach of contract which is so serious that it entitles the innocent party to walk away from it, I see no reason for the law to take away the innocent party’s right to go. He should have a clear choice: affirm or go. Of course the wrongdoer can try to make amends – to persuade the wronged party to affirm the contract. But the option ought to be entirely at the wronged party’s choice.
Cockram
if the employee gives longer than the normal contractual notice period this is affirmation of the breach.
Logan v Celyn House
was the repudiatory breach a reason for the resignation? Yes, is constructive dismissal, does not necessarily have to be the principal reason for the resignation.
Gibbs v Leeds
employee expressed willingness to negotiate consensual termination – had been a repudiatory breach by employer – employee could still resign and claim unfair dismissal.
Kaur
CA
The Court of Appeal (CA) confirmed that the position was that, in cases where there may have been an earlier repudiatory breach which has been affirmed by the employee, if there is subsequently conduct which, taken together with the employer’s earlier fundamental breach, causes the employee to resign or plays a part in the decision of the employee to resign, the later act effectively reactivates the earlier repudiatory breach. The employer’s further act can be described as “reviving” the employee’s right to terminate the contract.
Atkinson
Not necessary at stage 1 whether employee is also in repudiary breach of the contract
Even if employee had committed acts of misconduct, , if employer is in breach this is still a constructive dismissal. The fact of employee’s misconduct will be relevant at a later stage, mainly the damages.
Palmanor
abusive and insulting language by employer in context was a fundamental breach.
Wood
sexual harassment by employer in context was a fundamental breach.
Triggs
work related stress shown to be a breach of – breach of trust and confidence term
Shaw v CCL
breach of Equality Act is a repudiatory breach
Lewis v Motorworld Garages
– cumulative acts over time, little insults, remarks to undermine the employee. In context, it was a breach of mutual trust and confidence.
Morrow v Safeway Stores
breach of duty of mutual trust and confidence always amounts to a fundamental breach.
Notcutt v Universal Equipment
Terminations not amounting to dismissal
- Frustration
An event that renders the performance of the contract impossible or unlawful terminates the contract at common law by frustration without the choice or consent of the parties – therefore, no dismissal.
Facts: doctor advised that the employee would never work again after a heart attack a disabling illness frustrated contract – but this predated disability legislation and would be dealt differently today.
Williams v Watsons
Frustration will be ‘rare occurrences’
Igbo
The parties cannot contract out of the unfair dismissal legislation, but they can reach a settlement agreement in which the employee agrees not to litigate their claim subject to independent legal advice.
Facts:
An employee allowed to take leave beyond normal holiday entitlements to visit family abroad. Employer required them to sign statement that if she does not return to work the contract would be terminated. She could not return by the date set because she was unwell, but employer treated this as end to contract, she claimed unfair dismissal – was this a settlement agreement. Held: she claimed unfair dismissal, agreement was void because it tried to contract out the unfair dismissal act.
Sandhu
Appellant called to disciplinary meeting and told that he would be dismissed for misconduct. He negotiated a retirement package and left on its terms. The Tribunal found that he had left voluntarily and was not dismissed.
Held that the Tribunal was entitled, having asked the correct question – which caused him to leave – to find that he had left because of the package
Is an automatically unfair reason discrimination?
NO! The only automatically unfair discrimination is in ERA s99. This does not include discrimination such as race.
Smith v Hayle
Automatically unfair reasons
- Where the employee has two years or more continuious employemnt, the normal rule applies, namely it is for the employer to show the reason for dismissal.
- However, where the employee has less than two years’ service: he or she will acquire the burden of proving that the reason for dismissal was an automatically unfair reason.
Kuzel v Roche
Potentially fair reasons Burden of proof
the employer must show there is a fair reason for dismissal
At this stage of the inquiry into fairness the employer must show there is a fair reason for dismissal – it should not be confused with whether he/she acted reasonably when dismissing the employee for that reason which is considered at the next stage.
Shook v Ealing
Potentially fair reasons: Capability
capability does not have to apply to every aspect of an employee’s contractual duties.
need to show dismissed on bases of capability that they were not capable of doing the job to which they were primarily employed. This is a factual enquiry for the tribunal.
Redbridge v Fishman
Potentially fair reasons: conduct
They were a school manager who was asked to undertake teaching – they refused and was dismissed. Could employer rely on misconduct as a potentially fair reason? Held: yes but found applying reasonableness test (Stage 4) that it was unfair because they were not obliged to obey.
Irwin
House of Lords
Potentially fair reason: “some other substantial reason” SOSR
- residual category but does not have to relate to the other listed reasons in s98(2)
- reason can be based on general business considerations but not to be blurred with redundancy.
This is an old case.
Critisisms: it goes against the whole purpose of the legislation to provide employment security (SOSR sections).
O’Brien v Prudential Assurance
Potentially fair reason: SOSR
Failure to reveal history of mental illness when asked at job interview. Found: SOSR
Ssekisonge
Potentially fair reason: SOSR
Uncertainty over the claimant’s identity was an SOSR for dismissal was found to be an SOSR.
Immigration status for employment and uncertainty over claimant’s identify and they were dismissed for this reason (did not know correct identify). Held: SOSR reason.
Leach v OFCOM
COURT OF APPEAL
Potentially fair reason: SOSR
CA gives a general warning: SOSR was not to be used as a “convenient label” to stick on any situation where an employer feels let down, or a conduct reason is not available or appropriate
There must be a particular reason the Tribunal believe is a potentially fair reason
Iceland v Jones
EAT laid down a test of whether an employer acted reasonably. The EAT has laid down a general test based on the response of the ‘reasonable employer’
- ET must not substitute its own approach to such a decision but instead will ask: did the employer’s response fall within a ‘band of reasonable responses’ to the employee’s conduct which a reasonable employer might have adopted?
– respect for autonomy of managerial discretion - no fixed standard of reasonableness:
London Ambulance Service v Small
From time to time ETs fall into the trap of substituting their own views instead of applying the ‘band of reasonable responses’ of the ‘reasonable employer’ test.
Sarkar v West London
Unclear whether a tribunal is asserting its own opinion or not
assessing whether the ET has substituted its own view is difficult. Here the EAT and CA reached different conclusions on whether tribunal had substituted its own opinion
Kent CC v Gilham
Differing outcomes from ETs “reasonable employer test” upheld:
involved an industrial dispute by dinner staff in schools who refused to accept a pay cut and this led to dismissals (redundancies). There were tribunal cases brought throughout the country.
Ground for appeal: different decision made in Kent then another place based on the same facts and circumstances.
The EAT took the view that this did not matter that different ET came to different decisions if all of them had considered all the issues and applied the reasonableness test appropriately. This is a huge issue and problem.
Ssekisonge
Standard of fairness is the same if it is an SOSR dismissal:
Haddon
In late 1990s, the EAT sought to replace Iceland with a basic test of fairness saying Iceland test was perverse. But the CA rejected this in Madden and Foley
Madden and Foley
CA – rejected approach in Haddon.
The HL in Madden re asserted the Iceland test.
HL said in Madden, that Hadden was an unwarranted departure from authority – parliament hadn’t amended the legislation.
Madden
A bank dismissed an employee who was suspected of dishonesty after they carried out an investigation.
Tribunal said: big organisation not a sufficient enquiry – outside reasonable responses
CA took the view that this was the ET substituting itself as the employer, it should have applied standard of reasonable employer, not reasonable tribunal could have found it was not within reasonable responses because bank had conducted an enquiry. The bank had not found any other employee might have committed the crime and this is what a reasonable employer might have dismissed.
Critcisism: This was inhouse, not reported to the police. This would have been on their record if being dismissed. Perhaps a better investigation should have taken place
Sainsbury’s v Hitt
‘band of reasonable responses’ test applied in a case of suspected misconduct
Wincanton v Stone
reasonable to dismiss after accumulated warnings.
lead to a reasonable employer after a number of warnings to dismiss.
B.S. v Dundee CC
ill-health (capability) dismissal – Q: how long before it is reasonable to dismiss? A: whether any reasonable employer would have waited longer before dismissing the employee.
If enough employers would have dismissed after a period of time (Evidence perhaps) then a fair dismissal.
GM Packagingv Haslem
it can be fair to dismiss on the recommendations of an external consultant. The bringing in the external consultant might be to show who should be dismissed.
Hadjioannou
Tried to introduce a proprotionality test
involved a decision of a casino by an employee for socialising with gamblers – this was a breach of the rules. However, employee argued that other employees socialised with gamblers and had not been dismissed so was disproportionate to dismiss him for this reason. Held: this was not relevant – what mattered was the response of the employer in the gravity of the employees conduct.
Redfearn v UK
proportionality should be applied if human rights infringed
Guidance of European court of human rights. Bus driver who was dismissed because of concerns about him and was this a dismissal because of religion or belief (political belief), this case was brought in as a PC. He sought unfair dismissal and if he was able to show he was dismissed contrary to freedom of association of political party, this would be a breach of the convention and any dismissal should have been proportionate.
MBNA v Jones
inconsistency of treatment does not necessary mean unfair dismissal.
A colleague who had been involved in incident along with employee, one was dismissed, one was given a written warning. Held: within bound of reasonable responses because there were some differences between the case.
Pay v Lancashire
activities outside work – proportionality test under HRA may be applied.
probation officer who worked with sex offenders and their victims. He was dismissed because employer was concerned yhat in his own time, he was interested in sadomasicatistic things.
Employee’s argument: freedom of expression,
Proportionality was considered because there was a link to the human rights act. But ultimately found to be a fair dismissal, because court put together the proportionality and reasonable responses test.
Polkey v Dayton
House of lords
“polkey guidance”
The procedure all turns on the reasonableness test: if other employers would have dismimssed the individual without conducting any kind of procedure, then it may be within the band of reasonable responses to do so. However, the ACAS Code discourages this,
The reasonableness of the dismissal is based on a test of substantive fairness. However, the test in ERA s98(4) also encompasses procedural fairness i.e. the employer should follow reasonable procedural steps prior to making a dismissal. The requirement of a fair procedure accords with ‘equity’ and natural justice:
- adherence to proper procedures is an essential requirement of fairness – is within the band of reasonable responses
If there is a serious violation of procedures (employer not following their own procedures ) the ACAS Code of Practise can give ET power to raise awards by no more than 25%
Simmonds v Milford
previous warnings taken into account, might be sufficient to show fair procedure.
Express Medicals v O’Donnell
breach of procedure must be specified
for a finding of unfair dismissal to stand on grounds of absence of procedure, there must be clarity on what the procedure should have been and how the employer failed to follow that procedure.
NHS v Pillar
can take account of prior incidents that have been recorded where no disciplinary action was taken. If evidence that these incidences took place.
Ms Pillar, a nurse, was dismissed for gross misconduct after a third patient safety incident (PSI). Ms Pillar had previously been responsible for two similar PSIs; However, the manager who investigated the third PSI included in his report details about the two previous PSIs. This investigation report was used at the disciplinary hearing which resulted in Ms Pillar’s dismissal.
The EAT said this not a case of “totting up” warnings (as no prior formal warnings had been given), but of an overall lack of clinical competence by Ms Pillar.
