Dismissalby Kate Russell
Dismissal by reason of statutory ban is a potentially fair reason for dismissal. The dismissal comes about because the employee cannot continue to work in the position which he held without contravention, either on the employee’s part or on that of the employer, of a duty or restriction imposed by the law.
For example, if you hire a person to work behind the bar of your pub, he must be 18 years of age. If you hire him and discover that he is only 17, you would have to dismiss to ensure you don’t fall foul of the law.
It is for the employer to show that a statutory prohibition makes it impossible for the employee to continue in the same job. That alone is not conclusive of fairness. A tribunal will consider whether the employer acted reasonably in dismissing. If the employer could, for example, change the employee’s job so that he could do it legally, dismissal is likely to be unfair.
Even if there is a statutory ban, the employer must satisfy the usual requirement of reasonableness.
A’s duties were partly those of a magistrates’ court clerk and partly administrative. In 1976, new regulations were issued and A became aware that from 1980 he would be required by law to hold a valid training certificate. This involved passing some exams.
In 1976 he failed the exams. In 1977, he did not re-sit because of a muddle about dates. In 1978 he refused to re-sit; in 1979 he failed the exams, and in 1980 he refused to re-sit again. Since he was no longer qualified to sit as a court clerk, he was dismissed. The tribunal found that there were no alternative vacancies and A could not be kept on solely for administrative duties, so his dismissal was fair.
Driving bans are the main cause of statutory ban dismissal. When an employee has lost his driving licence, tribunals will normally expect the employer to consider the following matters before deciding on dismissal:
- Whether driving is an essential part of the job or whether the employee can satisfactorily carry on his duties without a driving licence
- Whether retaining the employee will mean dislocation and inconvenience
- Whether there is another job to which the employee could be redeployed
- Whether the employee has had the opportunity to express his views and whether any suggestions have been reasonably considered.
Some other substantial reason (SOSR)
A dismissal for SOSR is a general catch-all category. The statutory discipline and dismissal procedures apply to an SOSR dismissal.
The employer must show that the reason for the dismissal is a fair one and that he has acted reasonably in dismissing for that reason. It is then up to the tribunal to decide whether the employer acted fairly in the circumstances. Below are some examples.
- Dismissal of a replacement for a woman who has taken maternity leave. The dismissal will normally be fair as long as the employee
- Was informed at the beginning of employment that it would end when the employee taking maternity leave came back to work
- Was given due notice when employment came to an end
- Was not dismissed for any other reason.
- Business reorganisation; this may sometimes result in a dismissal, but the reason may not be redundancy because the same numbers of people were required to cover a similar range of jobs. Where the dismissal is made for a reason which management considers to be a sound business reason, perhaps because duties have to be changed to improve efficiency, then this may be accepted by a tribunal.
- Dismissal for economic, technical or organisational reason following a TUPE transfer
- Third party pressure to dismiss the employee
- A fixed-term contract has expired.
In 2005 the Court of Appeal considered whether a dismissal as a result of the manifestation of an employee’s difficult personality was a potentially fair dismissal for SOSR.
P was the Finance Director for the Trust. There were concerns about his management style and ability to represent the Trust. The disciplinary procedure was instigated and at the meeting he made unsubstantiated accusations against the person carrying out the interview (the Chief Executive), a fellow employee and the head of HR.
He was then dismissed with immediate effect and given six months’ pay in lieu of notice. The grounds were that his relationship with the executive team had broken down, and he had failed to establish the quality of relationships with third parties necessary to preserve and advance the Trust’s interests. Furthermore, the unsubstantiated serious allegations made against the Chief Executive during the disciplinary process meant they could not work together again.
The Court of Appeal held that personality, of itself, could not be a potentially fair ground for dismissal. Nevertheless, a potentially fair reason for dismissal may be established where the employee’s personality manifests itself in such a way as to result in conduct which could justify dismissal or in some other substantial reason justifying dismissal. Accordingly, it is possible for an employer fairly to dismiss an employee for SOSR as a result of the manifestation of their personality, provided a fair procedure has been followed.
It was found that any disciplinary panel would have been 100 per cent certain to have dismissed him on the grounds that P would not have been able to continue working with senior executives of the Trust.
The courts are fairly reluctant to allow ‘breakdown of trust’ as an SOSR reason for dismissal.
In Handshake Ltd v Summers, Mr Summers, a senior manager, was dismissed following a disagreement with his employer regarding a profit share. This resulted in an inability to agree terms of employment. The employer cited some other substantial reason (SOSR) as being the reason for the dismissal.
Under the Employment Rights Act 1996 there are five potentially fair reasons for dismissal. The reasons are conduct, capability, redundancy, breach of a statutory restriction and some other substantial reason. Employers often use some other substantial reason where there has been a breakdown in mutual trust and confidence, even though this approach has been met with criticism from both the Employment Tribunals and the Employment Appeal Tribunal.
The facts in this case were as follows. On joining Handshake Ltd, Mr Summers was offered 30 per cent of the Company’s issued share capital. The shares were to be issued at intervals. No shares materialised but Mr Summers did receive payments called ‘share of the profits’ in cash. Mr Summers queried the calculation of those net profits as he did not believe they satisfied his agreed entitlements.
The employer tried to formalise matters but no service agreement was concluded as an agreement could not be reached. The negotiations became protracted. Mr Summers’ legal representative wrote to his employer alleging that there had been a breakdown in mutual trust and confidence and threatening a constructive dismissal claim. Despite the content of the letter neither party behaved in a manner consistent with a breakdown. Mr Summers was eventually dismissed due to a breakdown in the working relationship. Handshake Ltd also argued that Mr Summers was not committed to the business.
Mr Summers brought claims for unfair dismissal and unlawful deduction of wages. The Employment Tribunal agreed that the dismissal was unfair. The employer had sought to exert power over the employee regarding the terms of his employment. The Tribunal found that it had jurisdiction to hear the unlawful deduction of wages claim as the bonus was quantifiable. Handshake Ltd tried to argue that it wasn’t and argued that the employee would have been dismissed anyway and his compensation should be reduced. The Tribunal disagreed but applied a finding of contributory fault, reducing Mr Summers’s compensation by 40 per cent.
Handshake Ltd appealed. The EAT held on appeal that trust and confidence had not broken down. It was impossible for the Tribunal to determine whether a dismissal may have resulted in the future had a fair procedure been followed. It did not permit further reductions to be made to the employee’s compensation.
The Court of Appeal has advised caution in previous case law saying that a breakdown in trust and confidence must not be used as a ‘convenient label’ where one of the other fair reasons for dismissal is not present.
Employers should be careful when seeking to rely on a breakdown of mutual trust and confidence as some other substantial reason. There should be other factors involved. Had this decision gone the other way it is likely to have resulted in employers having undue power in negotiations and fewer queries from employees about their terms, which cannot be right.