Unfair Dismissal

Question 1

What statute currently regulates unfair dismissal?

Answer 1

Employment Rights Act 1996, Part X

Question 2

Who does unfair dismissal apply to?

Answer 2

Employees ONLY, agency workers and self-employed persons have not right of claiming unfair dismissal

Question 3

Under what specific section of the Employment Rights Act 1996 is an employee protected from unfair dismissal?

Answer 3

s.94(1) states that an employee has the right not to be dismissed unfairly by his or her employer

Question 4

When will an employee be treated as dismissed?

Answer 4

s.95(1) of ERA 1996

(a) The contract under which they have been employed is terminated by the employer (with or without notice)
(b) … limiting event of a fixed term contract
(c) the employee terminates the contact under which he is employed (with or without notice) in circumstances in which he is entitled to terminate his contract without notice by reason of the employers conduct

Question 5

How should s.95(1)(a) of the ERA 1996 be interpreted?

Answer 5

TERMINATION WITH OR WITHOUT NOTICE BY EMPLOYER
- Problems may arise under this section where language between employee and employer is ambiguous - that being the precise form of words used may or may not have meant an employee was terminated

Question 6

What does the test appear to be in relation to s.95(1)(a)

Answer 6

How were words intended by the employer, and what would the reasonable employee have understood from what was said

Question 7

What is meant by s95(1)(b)

Answer 7

• That the ending of a fixed term contract will be classed as dismissal so that employers may not evade unfair dismissal legislation
• The framework of s.95(1)(b) is to provide unfair dismissal claims under fixed term contracts except where an employer did only need an employee for a specific period of time

Question 8

How is s.95(1)(c) interpreted?

Answer 8

Constructive Dismissal

• An employee will be constructively dismissed where he/she terminates their contract on the basis of conduct of the employer
• Entitlement of the employee to terminate contract without notice

Question 9

Western Excavating (ECC) Ltd v Sharp 1978

Answer 9

• The only time and employee may terminate his contract without notice was where the employer was in a fundamental breach of contract - repudiatory breach

Question 10

Weathersfield Limited v Sargent 1999

Answer 10

FACTS
- Applicant had been ordered by employers to discriminate on racial grounds
- The applicant left her position of employment without telling of her reason for leaving
HELD
- The employment tribunal did not err in finding that the applicant had been constructively dismissed
- The ET was entitled to find that the employee’s conduct was consistent with her having left because of unlawful instructions
- The employer had fundamentally destroyed the mutual trust and confidence between the employer and employee

Question 11

Malik v BCCI 1997

Answer 11

• Two employees dismissed by liquidators on grounds of redundancy
• Both men submitted claims to liquidators of loss of reputation hampering employment prospects and pecuniary loss caused by bank’s breach of implied obligation of mutual trust and confidence as
• Both men argued their association with the bank at a time of a fraud investigation damaged their standing in employment market
• Liquidators rejected claims
  HOL DECISION
• COA had erred in holding appellants could not bring claim for damages for financial losses allegedly suffered due to stigma attached with previous employer
• employer had breached contractual obligation of mutual trust and confidence and there was no need to prove that the breach was aimed directly at them
• BCCI acting in a corrupt manner amounted to breach of mutual trust and confidence as it is arguable the employees association with them after that causes them loss

Question 12

What is the “final straw” in relation to constructive dismissal?

Answer 12

• This is where the implied term of trust and confidence has been breached, not by the actual “final straw”, but by a series of earlier acts which cumulatively amount to a breach of that term

Question 13

London Borough of Waltham Forest v Omilaju 2005

Answer 13

COURT CLARIFIED THE ‘FINAL STRAW’ POSITION

• The last or final act in a series of acts which lead to a breach of trust and confidence, may in itself not always be unreasonable
• It is however essential that it was an act in a series of cumulative acts which lead to a breach
• The final act must contribute something to the earlier breaches but is not required to be of the same character as long as it is not “utterly trivial”
• Therefore, if an employer commits a series of acts which amount to breach of implied term and employee stays in employment, that employee cannot subsequently rely on those acts to justify a constructive dismissal if the final straw is entirely innocuous

Question 14

Kerry Foods v Lynch 2005

Answer 14

• Lynch was sent letter giving notice that, if he did not agree to new terms of contract, which included less holidays and more work per week, his current contract would be terminated and he would be offered immediate re-engagement on the new terms
• Lynch proceeded to resign claiming constructive dismissal
  HELD BY EAT
• The ET had erred in finding a change to the contract of Lynch amounted to a breach of implied term of trust and confidence
• An employer’s service of a lawful notice of termination coupled with an offer of continuous employment on different terms cannot of itself amount to a repudiatory breach of contract.

Question 15

Land Securities Trillium v Thornley 2005

Answer 15

• Employee resigned from post and claimed constructive unfair dismissal after the appellant employer made a fundamental change to the nature of her job
• The employee was no longer assigned to any full time projects as she previously had been and complained the whole emphasis of her job had changed from architect to manager, with the effect of which was to deskill her
  EAT HELD
• ET was right that employers had fundamentally breached the claimant’s contract of employment in imposing a new job description which changed her duties from hands on to a mainly managerial role.
• The EAT held that the changes to her duties amounted to the employers indicating an intention not to be bound by her contract
• Entitled to find the claimant was entitled to resign by reason of constructive dismissal

Question 16

Amnesty International v Ahmed 2009

Answer 16

FACTS
- Sudanese staff member was not awarded promotion to researcher in Sudan on the grounds that Amnesty believed it may damage their reputation of impartiality and that the employee may not be safe
- Ahmed resigned claiming direct discrimination and constructive dismissal
HELD
- EAT stated that this was discrimination and it was irrelevant of the reasons the employer had for discriminating
- BUT that in this case constructive dismissal was not satisfied
- There was no repudiatory breach of the implied term of trust and confidence as despite the discrimination, the charity had conducted itself in a reasonable and proper manner
- The EAT held that unlawful discrimination did not in itself mean there had been a repudiator breach of the implied term

Question 17

What are the essential steps involved in a statutory unfair dismissal claim?

Answer 17

• Is the claimant defined as an employee
• Has a dismissal occurred within the context of s.95
• Is a claim prevented from being made e.g. national security
• Has the qualifying period of 2 years been met?
• Is the claim being made within three months of the effective date of termination

Question 18

What are potentially fair reasons for dismissal?

Answer 18

s.98 of the ERA 1996

s. 98(2)(a) - relates to capability or qualifications
(b) - relates to the conduct of the employee
(c) the employee was made redundant
(d) cannot continue to work without contravention of an enactment
s. 91(1)(b) - some other substantial reason

Question 19

What does s.98(3) of the ERA 1996 state in relation to “capability” and “qualifications” from s.98(2)

Answer 19

Capability - that an employee’s capability is assessed by reference to skill, aptitude, health or any other physical or mental quality
Qualification - means any degree, diploma or other academic, technical or professional qualification relevant to the position which he held

Question 20

What does s.98(4) of ERA 1996 state?

Answer 20

Whether a dismissal is fair or unfair (having regard to reason shown by employer)

(a) Depends on whether in the circumstances the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee, and
(b) Shall be determined in accordance with equity and substantial merits of the case

Question 21

Buckland v Bournemouth University 2010

Answer 21

• A university professor resigned claiming constructive dismissal arguing that the university had breached the implied term of trust and confidence by awarding different marks to students without telling him
• The university acknowledged wrongdoing on their part and attempted to reconcile with the employee by holding an inquiry
• During the case the university sought to rely on the reasonable response test
• they argued that as an employer under these circumstances it was a reasonable response for them re-mark papers
  HELD
• COA rejected university claims as the reasonable responses test does not apply to fundamental breaches of contract, the test is an objective one, where a breach occurs when proscribed conduct takes place

Question 22

Reilly v Sandwell Metropolitan Borough Council 2018

Answer 22

FACTS
- Reilly (appellant) was a teacher who had a close relationship with a man named Selwood, to the extent they purchased a property in joint names as a means of investment
- Selwood was arrested in 2009 whilst in the presence of the appellant at the property on charges relating to the possession of indecent images of children
- Selwood was convicted of these charges in 2010 and at no point had the appellant made her school, nor the council aware of her relationship with him despite the two remaining close
- During this time the appellant was promoted to the role of head teacher
- The council became aware of the relationship and regarded her failure to disclose the relationship as a serious breach of an implied term in her contract which amounted to gross misconduct
- The appellant was dismissed after repeated failures to admit her wrongdoing and that her actions may have caused a risk to pupils
SC DECISION
- It was a reasonable response of the disciplinary panel to conclude that non-disclosure and continuing failure to admit wrongdoing amounted not only to a breach of an implied term in her contract but also merited dismissal
- Lady Hale and word Wilson challenged the range of reasonableness test in this case, arguing for a better test which gave judges a greater say

Question 23

Gogay v Hertfordshire County County Council

Answer 23

• Gogay (appellant) worked as a care worker in a home run by the council
• Gogay was absent from work due to stress after a child in her care became sexually provocative towards her due to abuse in the past
• Gogay was sent reassurances but was subsequently suspended pending an investigation of allegations made by the child of sexual abuse
• The suspension was communicated via a letter
• After the investigation concluded no wrongdoing the appellant was unable to return to work as she suffered from clinical depression from the incident
• She claimed for breach of her contract of employment
  COA HELD
• The High Court was correct in finding the employer was in breach of implied contractual jury of trust and confidence in suspending the employee pending an investigation
• By suspending an employee, and the means of doing so clearly calculated serious damage to relationship between the parties
• Whether it amounts to a breach depends upon whether there was a reasonable and proper cause for the employer’s action
• Court held other measures could have been put in place and described the council’s response as a ‘knee jerk’ reaction

Question 24

Johnson v Unisys 2001

Answer 24

FACTS
- Plaintiff was an employee employed by the defendant on two separate occasions before being summarily dismissed in 1994 by reasons of allegations as to the employee’s conduct
- Plaintiff suffered a mental breakdown after dismissal and he had been struggling with work related stress throughout his employment to which the employer was aware
- The employee was unable to obtain employment after dismissal and sought damages alleging the employer had breached the implied term of mutual trust and confidence
HELD
- The HOL agreed that the plaintiff had been unfairly dismissed
- The House accepted that the plaintiff had a reasonable cause for action based on the breach of the implied obligation, however he would not be successful in his claim for full compensation which is limited by the ERA 1996

Question 25

Virgin Net Ltd. v Harper 2003

Answer 25

FACTS
- Harper received formal warning after incident with junior manager
- Employer’s had second thoughts and in turn summarily dismissed Harper
- At an ET Harper was awarded compensation for unfair dismissal, including notice pay as she was three months out with the notice period and had she been given the requisite notice she would have been eligible for unfair dismissal claim
- Reflect of a loss of chance claim
EAT HELD
- ET erred in awarding damages for loss of opportunity to claim for unfair dismissal and damages were wrong to have been awarded
- Had the employer provided contractual notice she may have had right to claim requirements of one years continual service (at the time)

Question 26

Horkulak v Cantor 2004

Answer 26

FACTS
- Horkulak resigned as a result of bullying from the CEO Amatis
- The appellant argued the conduct of the CEO amounted to a breach of the implied term of mutual trust and confidence
- The employer argued that the language used was common in the work environment and was induced by Horkulak’s repeated shortcomings
- Employer asserted he terminated is own contracted because he could not cope with pressure of the job
HELD
- Horkulak was awarded damages in respect of his contract as well as a discretionary bonus
- The High Court was correct to rule an amount of the discretionary bonus as it was stipulated in the contract of employment
- The assessment of damages including the bonus was correct as it is what the court deemed Horkulak would have made had he remained at the company

Question 27

Mezey v SW London and St. George’s Mental Health NHS Trust 2007

Answer 27

FACTS
- Mezey was a consultant psychiatrist who was suspended from all non-clinical duties, pending disciplinary proceedings after independent report into a murder by one of her patients
- Mezey sought injunction preventing a hearing
HELD
- Sanctions were not appropriate considering the report general endorsed Mezey’s competence
HELD BY COA
- High Court did not err in granting injunction preventing disciplinary hearing
- Court has the power to grant injection restraining suspension just as it may a dismissal
- Suspension and dismissal both capable of being breach of contract.

Question 28

In brief what is the Johnson exclusion zone?

Answer 28

Complex rule established in Johnson v Unisys Ltd (2001) and Eastwood v Magnox Electric plc (2004)

• an employee cannot seek damages for breach of the implied term of trust and confidence based on the manner in which they were expressly or constructively dismissed
• thinking behind this rule is that government had specifically provided a remedy for unfair dismissal in legislation – with its accompanying cap on compensation – and it would, therefore, be wrong to allow employees to pursue an uncapped breach of contract claim instead.