Business and Employment Law

Business and Employment Law Lecture 7 WB 19th February 2018 Unfair Dismissal - Reasons and Remedies

UNFAIR DISMISSAL The right: S.94(1) ERA 1996 An employee has the right not to be unfairly dismissed by his employer Eligibility: i)Must be an employee Two (from 6 April 2012) ii)Must have one or more year’s continuous employment (subject to exceptions) iii) Must prove dismissal

ERA 1996 defines three categories of dismissal under statute • Automatically fair reasons • Automatically unfair reasons • Potentially fair reasons

Automatically Fair Reasons • National security reasons • Unofficial strike action • The way an employer dealt with the situation will not be considered if the reason for dismissal is in relation to either of these – very rare

Automatically Unfair reasons for Dismissal • Unless the dismissal is related to a ‘spent conviction’ or to a transfer of undertakings, there is no qualifying period (see slide 2) • Note the difference in protection for a worker/employee – a pregnant female worker would gain protection under the Equality Act not the ERA as she is not an employee

Potentially Fair Reasons for Dismissal If the employee has shown that they qualify (i.e. have the status of employee, have worked for the employer > 2 yrs and have been dismissed (s.95 ERA))… and presented their claim to the tribunal in time… It is then for the employer to: the reason for the dismissal and that the reason falls within one of the prima facie fair grounds for dismissal (s.98 ERA) It is then for the tribunal to consider whether the employer acted reasonably in treating that reason as a sufficient reason to dismiss (s.98(4)). The tribunal will do this by employing the Range of Reasonable Responses test.

The grounds in s.98(2) ERA a) capability or qualifications b) conduct c) redundancy d) contravention of an enactment or SOSR (s.98(1)(b))

Capability or Qualification • S98(3) ERA 1996 • (a)“capability”, in relation to an employee, means his capability assessed by reference to skill, aptitude, health or any other physical or mental quality, and • (b)“qualifications”, in relation to an employee, means any degree, diploma or other academic, technical or professional qualification relevant to the position which he held.

Capability or Qualification • The employer must communicate clearly with the employee as to what is expected of him • Clear objective should be set • The employee must be given an opportunity to respond • Training must be put in place to support the employee • The employee is given time to improve • Taylor v Alidair 1978/Davis v Kent Meters 1975

Competence and Capability • Long term sickness - is the employee capable of performing the job role • If the employee is disabled the employer must consider all avenues before dismissal - reasonable adjustments s20 Equality Act 2010 • Archibald v Fife Council [2004] UKHL 32

Managing Performance • Recognising good performance – via PDR • Support for poor performance • Probation is a useful tool • Allows employers to set specific goals/targets to be achieved • Allow employers to more closely monitor progress • Allows for intervention at an early stage if problems are highlighted • Period can be extended if there are continuing concerns

Capability or Qualification • Employee not able to undertake the job for which he was employed:- • HGV driver fails is HGV driving test • The employee does not have the possess the necessary qualifications for undertaking the job – despite the fact that he stated he did. • Qualification must be linked to the job role

Other reasons for poor performance • Illness – sickness provision • Stress – employer entitled to believe that the employee is capable of doing the job – but see employer’s responsibility in previous notes • Bullying – employer is vicariously liable for anything that happens in the workplace – see s109 Equality Act and Harassment s26/Victimisation s27 • Discrimination (which includes harassment and victimisation) – employer will be held liable unless he has a reasonable steps defence (s109)

Dealing with Capability or Qualification as a fair reason for dismissal • S98 ERA – if the employer has undertaken all the necessary steps as explained above and the performance does not improve – he can dismiss – but only as a last resort. • Remember – was dismissal the action of a reasonable employer?

Conduct as a fair reason for dismissal • Conduct (Gross Misconduct) is the second reason for which a dismissal may be fair (s98) • What is Gross misconduct • Swearing? • Assaulting? • Drinking/taking drugs on the premises? • Stealing?

Dealing with Conduct as a fair reason for dismissal • Suspend employee on full pay • Must be an investigation • Employee entitled to bring colleague to the meeting • Employee entitled to an appeal • Dismissal must be based on ‘honest belief’ • British Home Stores v Burchell • Again employee/employer/tribunal – were the actions of the employer a reasonable response to the actions of the employee or would a different course of action have been more reasonable?

Conduct Dismissal • (1) What was the Respondent's reason for dismissal? • (2) Was that a potentially fair reason relating to the Claimant's conduct? • (3) If so, did the Respondent have reasonable grounds for that belief following a reasonable investigation? • (4) If so, was the disciplinary procedure conducted by the Respondent fair? • (5) If so, did the sanction of dismissal for the employer's reason fall within the range of reasonable responses open to the Respondent?

Illegality as a fair reason for dismissal • Employer responsible for checking documents – can be fined for employing someone who does not have the right to work in the country • Employer responsible for work based accidents • Employer responsible for ensuing all activities are within the law

What is Redundancy? • Redundancy is connected to the job – not the person • S139 ERA • 1(a) An employee is dismissed for redundancy if the dismissal is wholly or mainly attributable to: • The fact that his employer has ceased, or intends to cease – • (i) to carry on the business for the purposes of which the employee was employed by him; or • (ii) to carry on that business in the place where the employee was so employed

What is Redundancy? • S139 ERA • 1(b) the fact that the requirements of that business— • (i) for employees to carry out work of a particular kind, or • (ii) for employees to carry out work of a particular kind in the place where the employee was employed by the employer, have ceased or diminished or are expected to cease or diminish.

Redundancy Cont … • S139(1)(a) • Pfaffinger v City of Liverpool College 1996 – succession of fixed term contracts • Moon v Homeworthy Furniture 1977 – court will not investigate economic situation unless it is an obvious sham

SOSR • Usually in relation to business efficiency/reputation:- • Baker v Securicor Omega Express 2000 • Leach v Office of Communications 2012 • Pay v Lancashire Probation Service 2004 • The employer must demonstrate that he has considered all options before dismissing • Again employee/employer/tribunal

The role of the tribunal • Is to establish that they employer has acted reasonably in connection with both the issue itself and the way in which the employer dealt with the situation – the tribunal must satisfy itself as to:- • Substantive reasonableness • Procedural reasonableness • It does this by applying of the Range of Reasonable Responses Test • Discussed in more detail next week

Remedies • Completing ET1 form – employee outlines outcome he wants to achieve – but it is for the tribunal to decide and usually the remedy is compensation – current figures are detailed in the handbook • Reinstatement • Reengagement • Compensation • Basic Award • Compensatory award • Injunction - Irani v Southampton Area Health Authority

Remedies – Compensation • Compensation is composed of a basic award and a compensatory award. • The basic aware is calculated by multiplying a weekly pay amount up to a maximum limit of £489 by the number of years of service (up to 20 years). • The employee receives 1 week of pay for each year he worked between the ages of 22 and 41. He receives 1.5 week’s pay for each year he worked over the age of 41, and 0.5 week’s pay for each year between the ages of 18 and 22.

Remedies – Compensation • The Polkey Rule - Polkey v AE Dayton Services Ltd [1988] AC 344 • The compensatory award compensates losses, both up to the date of the hearing (such as the loss of income and benefits) and the likely loss the Claimant will suffer in the future. It can also compensate the Claimant for harm to reputation and dignity. • The maximum compensatory award is £80,451

Summary • 5 reasons for which a dismissal may be fair • Capability/qualification • Conduct • Illegality • Redundancy • SOSR • Employer must act reasonably in relation to both the substantive reason for dismissal and the procedure he adopts • The tribunal applies the RRR Test

Business and Employment Law