Dismissalby Kate Russell
Fairness of a dismissal
There are a number of fair reasons for dismissal, which fall into several categories:
- Some other substantial reason.
In considering the fairness of a dismissal a tribunal will ask two questions:
- Was the dismissal for a fair reason?
- If it was, was it procedurally fair?
H had worked in a tanning salon for five years. Standard procedure was that new customers had to fill in a self-analysis form to determine how many minutes they could spend on a sunbed, they would then be given information on the dangers of using sunbeds. This leaflet contained a disclaimer, which was a regulatory requirement for the salon’s licence and a requirement of its insurers.
H did not ask a new customer to fill out a form, something that she admitted she knew she was supposed to do. She said that it was a ‘one-off incident’, that it was a slow day during which she felt tired and lethargic, and that the customer seemed to know what she wanted.
Brenda Shirley, a director of the company, asked her daughter, Linda Shirley (a former director of the company), to carry out an investigation, after which H was suspended. At a further investigatory meeting, attended by both of the Ms Shirleys and Ms Pepper (H’s line manager) Ms Pepper complained that she had been harassed by H about the allegations made against her and that H’s boyfriend had been unpleasant when he came to collect her wages during her suspension.
H was invited to a disciplinary hearing and was charged with a failure to comply with the company’s procedures. Linda Shirley chaired the discipline meeting and dismissed H for gross misconduct. H complained that she had been unfairly dismissed. The employment tribunal agreed, finding that the company had breached the ACAS Code of Practice and its own disciplinary procedure by having Linda Shirley undertake both the investigation and disciplinary hearing.
The company had a potentially fair reason for dismissing H, but it had wrongly taken into account H’s alleged ‘bad attitude’, which she had never been formally warned about. In addition, the tribunal thought that the employer had inappropriately taken into account the poor behaviour of H’s boyfriend, rather than concentrating on the matter in hand (her alleged misconduct). However, H had contributed to her dismissal. She knew the importance of requiring customers to fill in the necessary paperwork. Her tiredness on the day in question was not an excuse. Her compensation was therefore reduced to zero.
Who can claim unfair dismissal?
To qualify for protection against unfair dismissal, an employee must meet the following conditions:
- He must be employed (the amount of hours worked per week is irrelevant). The self-employed are excluded
- He must have two years’ continuous employment (however, see below for a list of automatic unfair dismissals).
Only those employed under a contract of employment are able to claim the protection of unfair dismissal and constructive unfair dismissal. However, it’s not always easy to determine who is an employee and who has other working status (see Employment Contracts). In the early 2000s, there was a series of cases during which the senior courts were prepared to give credence to the view that in certain circumstances an agency worker may become an employee, with the consequent right to complain of unfair dismissal.
To the relief of employers, this line of thinking was reversed in 2008 when the Court of Appeal said that unless there were any grounds to consider that an agency worker was anything else, he would go on being treated as an agency worker. The mere passage of time didn’t confer any rights as an employee. It is a question of circumstances.
J had been working for Greenwich Council since 2001, providing her services through a series of temp agencies. During this time, she did not enter into any written contract with Greenwich Council, and was not entitled to sickness or holiday benefits. She did, however, sign a contract with the temp agency, which described her as a self-employed worker.
In 2004, this arrangement with the council came to an end, and J complained unsuccessfully that she had been unfairly dismissed, citing the decision in Dacas v Brook Street Bureau to argue that the extensive period of her engagement meant she should have the same status as other council employees. Eventually the case came before the Court of Appeal. The Court agreed with the earlier decisions that J had not acquired employment status. It made a number of observations:
- Where the agency relationship is genuine, which is likely to be the case where no pre-existing relationship exists between the worker and the client, the tribunal should rarely find sufficient evidence to imply a contract of employment
- If such a contract is to be inferred, there would need to be some words or conduct to indicate that the relationship was no longer consistent with an agency arrangement
- The mere passage of time would not typically justify the implication of a contract
- Where there is a pre-existing contractual arrangement and the agency is merely acting as an agent for the purposes of paying wages to the temp, it believed the tribunal would be entitled to conclude that these arrangements were a sham, and that the original contract was never brought to an end.
In the same year that James was decided there was another decision by a senior court giving an agency worker employment rights. The decisive factor in that case was that the agency worker had directly negotiated some terms of the contract and it hadn’t been done through the agency.
While the James decision helped to clarify the status of agency workers, The Agency Workers Regulations 2010 which came into force on 1 October 2011 give certain rights to agency workers after 12 weeks’ work and prohibit detrimental treatment or dismissal of agency workers on the ground of their status.
This means that agency workers are entitled to the same basic working and employment conditions as those employed directly by the end-user (‘hirer’) on completion of 12 consecutive weeks in the same role for the same hirer.
Basic working and employment conditions are those relating to pay, working time, rest breaks and annual leave. Pay for these purposes is any amount paid in connection with the employment or engagement and includes bonuses, fees or commissions that are directly attributable to the amount or quality of the work done by the worker and benefits in the form of fixed value vouchers or stamps. Pay does not include contractual payments relating to sick leave, pension, redundancy or maternity, adoption or paternity leave.
In most cases, an employee has to have two years’ service qualification to claim unfair dismissal. The date on which an employee starts work is included when computing the period of continuous employment for the purposes of unfair dismissal.
Note that the following cases were brought under the previous service qualification requirements, which were one year. However, they demonstrate the legal principles.
In this case, O’B started her employment with the employer, PJ, on 8 April 2002. She was given one week’s written notice by a letter posted by hand to her home on 27 March 2003 (while she was away on holiday) which she did not receive until Monday 31 March 2003.
O’B brought a claim for unfair dismissal. The tribunal decided that she did not have one year’s continuity of employment and so could not bring her claim. It considered that her period of notice had begun on Friday 28 March 2003 and had expired on Thursday 3 April 2003.
The EAT overturned the decision and stated that the start date of the notice period was 1 April 2003 and the end date was 7 April 2003, meaning the claim was admissible.
The employer appealed, arguing that one year’s continuous service would not be accrued until 8 April 2003. The Court of Session disagreed, holding that the first day of work and the effective date of termination must be included in the calculation and on that basis, O’B had a year’s continuous service on 7 April and was able to make a claim.
If an employee is dismissed in breach of contract because he has not been given sufficient notice, there is no right to claim damages on the basis that had he been given his contractual notice, he would have been employed for more than a year and thereby entitled to claim unfair dismissal.
H was summarily dismissed on 2 March 2001, 33 days short of the one-year qualifying period needed to bring a claim for unfair dismissal. Her employment contract specified three months’ notice. She brought a successful claim for wrongful dismissal, and the tribunal awarded three months’ salary as damages, being the notice period that H should have received.
The tribunal also awarded a further sum for ‘loss of opportunity to claim unfair dismissal’. VN appealed against the award. The EAT upheld its appeal, ruling that such an award was not available as a matter of law. H appealed unsuccessfully.
There was no right to claim compensation for loss of an opportunity to claim unfair dismissal, and therefore the tribunal had been wrong to award damages under this head. Parliament had stated that a worker does not have the right to claim unfair dismissal unless they have one year’s continuous service. The effective date of termination (EDT) can only be postponed by reference to statutory notice procedures.
Where there is a genuine dismissal the employee is not entitled to notice so the period of statutory notice does extend the period of service.
Ms Wileman, a recruitment consultant, was summarily dismissed for gross misconduct two days before her two-year anniversary with her employer. There was no process carried out before her dismissal or any right to appeal. She lodged a grievance, but no hearing took place. She lodged an unfair dismissal claim. Her employer argued that she didn’t have the necessary two years’ service. She argued that adding the statutory minimum notice of one week would take her over the line.
In the Court of Appeal, the Court found that the case boiled down to a question of statutory interpretation. Where an employer has the right to summarily dismiss an employee where, at common law, it is entitled to do so (e.g. gross misconduct), then the employee isn’t entitled to statutory notice and the employee cannot extend the effective date of termination by the period of statutory notice.
It is a common misconception that dismissing employees who do not have two years of service will mean that they will not face an employment tribunal claim. In consequence employers often dispense with the usual dismissal procedures.
Although in many situations, dismissing an employee who does not have two years’ service will be low risk, there are a range of exceptions to the rule, so it is not ‘no risk’.
The general rule is that employees require 103 weeks’ (rather than 104 weeks’) service to bring an ordinary unfair dismissal claim. This is because for the purposes of an unfair or constructive dismissal claim they would be allowed to include their statutory entitlement to one week’s notice which is deemed to give them two complete years of service.
Employers often assume that if the qualifying service requirement isn’t met then there is no risk of a claim arising from the dismissal. This is not true. There are significant exceptions to the general rule on qualifying service and there are other claims linked to dismissal which have no qualifying service requirement. This means that you must give thought to the reason for, and circumstances of dismissal. If there are any red flags please ensure you get in touch with us.
Automatic unfair dismissals
Some dismissals can be described as automatically unfair in the sense that, if one of those reasons is established, a tribunal must find the dismissal unfair. In other claims of unfair dismissal, the court has to consider the two-stage question – see above.
The following is a list of automatically unfair dismissals.
- Dismissal for reasons relating to jury service
- Dismissal in connection with the right to time off for dependants
- Dismissal linked with pregnancy, childbirth or family leave
- Dismissal for health and safety reasons
- Shop or betting industry employees who object to working on Sundays
- Dismissal relating to paid annual leave and other rights under the Working Time Regulations
- Dismissal related to an employee acting as an occupational pension scheme trustee
- Dismissal for asserting a statutory right: for example, taking emergency leave for dependents
- Dismissal in connection with the right to request flexible working
- Dismissal because of a spent conviction under the Rehabilitation of Offenders Act 1974 as updated by the Legal Aid and Sentencing and Punishment of Offenders Act 2012
- Dismissal in connection with trade union membership, activities or use of union services. Dismissal in connection with an application or campaign for trade union recognition or the securing of bargaining arrangements. Dismissal for taking official industrial action
- Where an employee is dismissed for acting as an employee representative or the person was a candidate to become an employee representative
- Dismissal relating to an employee asserting their rights under the Employment Relations Act 1999 – the right to be accompanied to a disciplinary or grievance hearing
- Dismissal relating to an employee asserting their rights under the National Minimum Wage Act 1998
- Dismissal relating to an employee asserting their rights under the Tax Credits Act 1999
- Dismissal relating to an employee asserting their rights under the Part Time Employees (Prevention of Less Favourable Treatment) Regulations 2000
- The selection of an employee for redundancy based upon a reason which would have been automatically unfair if the same reason was used to dismiss the employee
- Dismissal where there is a transfer of an undertaking and the transfer or a reason connected with it is the reason or principal reason for the dismissal
- Dismissal relating to the performance or functions of or activities as a member or representative of a European Works Council
- Dismissal in connection with the rights of fixed-term employees
- Dismissal in connection with the information and consultation rights under the Information and Consultation Regulations 2004
- Dismissal for making a protected disclosure under the Public Interest Disclosure Act 1998 (whistle-blowing)
Different rules for automatic unfair dismissals
Where an employee is dismissed or selected for redundancy for an automatically unfair reason, the two-year service qualification does not apply.
There are two exceptions to this:
- Dismissals because of a spent conviction
- Dismissals where there is a transfer of an undertaking.
There is no upper limit on the compensatory award in cases where the employee was dismissed for
- Making a protected disclosure
- Carrying out or proposing to carry out activities in connection with or reducing risks to health and safety at work, having been designated by the employer to do so
- Performing or proposing to perform the functions of a health and safety representative or member of a committee, either in accordance with arrangements established by statute or after being recognised as such by the employer.
The ‘no upper limit’ rule also applies if the employee was selected for redundancy and the reason for the selection was one of the above reasons.
Claims for unfair dismissal and constructive unfair dismissal must normally be lodged with an employment tribunal within three months of the effective date of termination (EDT). Before making a claim the employee must put in a request to ACAS for early conciliation. This usually lasts up to a month. During the conciliation process, the time limit is paused and has the effect of extending the limitation period.
The limitation period starts start to run in the following circumstances:
- Where the employer serves notice to the employee, the EDT is the same day that the notice period ends. It does not matter if the notice period is worked through or not or even whether the employer actually gives the correct amount of notice
- If an employee is dismissed summarily – in other words, without notice – the three months run from the date of the dismissal. Dismissal without notice usually only happens when the employee commits gross misconduct, such as theft or assault
- Where the employer does not serve notice on the employee but dismisses him without requiring him to work his notice, paying him for the notice period instead (pay in lieu of notice), the three months period runs from the date of dismissal.
Note that difficulties can sometimes arise for employers where they wish to communicate a dismissal to an employee who is absent from the workplace (for example, because of sickness or absence without leave). The problems associated with dismissal by post were considered in the case of Gisda Cyf v Barrett.
Miss Barrett was informed that she had been dismissed by her employer by way of a recorded delivery letter. The letter informed her that she had been summarily dismissed for gross misconduct.
Miss Barrett lodged a claim for unfair dismissal with the Employment Tribunal, but the employer claimed that she was outside the three month time limit for bringing a claim. The employer claimed that the date of termination was the date when the dismissal letter was written and posted. Miss Barrett claimed that it was the date that she actually opened the letter and became aware that she had been dismissed.
The Supreme Court has decided that where a dismissal is communicated by way of a letter sent to the employee at home, provided that the employee had neither gone away deliberately to avoid receiving the letter nor avoided opening it and reading it, the effective date of termination of employment – and thus the date from when the three month time limit starts running – is when the letter is actually read by the employee, not when it is posted or even when it arrives in the post.
The EDT can sometimes be extended. For example, when an employee is too unwell to make a claim in the usual limitation period. This extension can also be used in constructive dismissal cases.