Wrongful and Unfair Dismissal: What They are & Remedies

UNFAIR AND WRONGNFUL DISMISSAL, AND LEGAL REMEDIES

(Based on author’s site www.geocities.com/unfdis)

There are three types of unlawful employment termination under Employment Law. The first is Wrongful Dismissal which and is a matter of breach of contract and damages. This may be dealt with by the ordinary civil courts or normally with a limit on the maximum possible award by Employment Tribunals.

The other is Unfair Dismissal introduced into British Law by Acts of Parliament upon Britain’s becoming a European state. It covers any type of employment termination, including a disputed Redundancy situation. This may only be dealt with by Employment Tribunals, although may be appealed from, after the Employment Appeal Tribunal (EAT), in the superior courts within the United Kingdom and may be taken to the European Court of Justice (ECJ).

In both case there is an expectation that the employee should seek to mitigate his loss. Wrongful Dismissal law suits being based on the Law of Contract damages are normally only for measurable economic loss. Unfair Dismissal cases to some extent allow Tort Law considerations in terms of considering in discrimination cases also awarding for injury to feelings.

1. Wrongful Dismissal: This is employment termination without proper notice or good reason. Employment Tribunals may deal with this, generally without involvement of costs, but may not award more than a statutory maximum in damages for Wrongful Dismissal. One may sue in the High Court (in Scotland in a Sheriff Court), where costs are automatically involved, but where there is no limit to the amount of damages that can be claimed.

Wrongful dismissal, being contract based, is not so much by Acts of Parliament, but almost entirely, by Common Law principles governed –i.e., judge made law, relying on precedent.

Wrongful dismissal being a breach of contract claim, it is a good reason and not wrongful dismissal if it is by notice agreed (although that does not prevent a complaint, instead, under the Unfair Dismissal or Redundancy procedures of Employment Tribunals, if one qualifies).

An employee's own breach may amount to repudiation or frustration of the employment contract making the employment termination not wrongful dismissal (if as pursued as Unfair Dismissal, it is taken into account in determining fairness or in the form of a deduction from the Employment Tribunals compensation award).

It is Wrongful Dismissal, not only if there was a breach of the contract by the employer, but also if the contract of employment included unlawful terms and conditions causing the employee to leave -e.g., disregarded statutory restriction such preventing the employee from taking employment elsewhere.

In Wrongful Dismissal normally the agreed notice applies and, at the absence of an expressly agreed and specified notice period, reasonable notice is deemed in practice to be a minimum of 1 week's wage if one is weekly paid or a minimum of 1 month's salary if one is monthly paid.

Damages claimed for Wrongful Dismissal must be financially measurable.

2. Unfair Dismissal may only be complained of to Employment Tribunals, but may be appealed from to the Employment Appeal Tribunal (EAT) and then to superior national or European Courts.

An Employment Tribunal's constitution is a (normally professionally qualified) chairperson and two lay members, one recommended or approved by the Confederation of British Industry (CBI) and the other by the Trades Union Congress (TUC). (Employment Tribunals, are often referred to as ET, and sometimes with their earlier name as Industrial Tribunals or IT.) Unlike in the High Court, suing at the Employment Tribunals is free; but the employee may be asked to deposit monies in advance which are forfeited if the employee is advised in advance that his claim does not have a reasonable prospect of success or insists on a hearing with disregard to settlement through ACAS. Also the employee can be ordered by Employment Tribunals to pay costs up to a 5 figure maximum if considered to have been frivolous, vexatious, unreasonable, (normally) in relation to the hearing –in officially available statistics such costs orders were one third against employers and two thirds against employees.

Unfair Dismissal is employment termination, without a statutory reason or constructively, and can be complained of only if the employee has been employed for at least one full year. Employees may make an Unfair Dismissal claim also if they have been employed for less than a year if the Unfair Dismissal is for a reason that can be shown at a preliminary hearing to fall within the category of exceptions.

Exceptions are: e.g., trade union activity, pregnancy, whistle-blowing, seeking to assert a statutory right -e.g., seeking written pay statement; or, e.g., sex or racial or disability discrimination or harassment or victimization in relation to them –e.g., has complained of them.

Unfair Dismissal covers also constructive dismissal -i.e., treating the employee in a way that results in the employee’s leaving in circumstances that in law to sack would be Unfair Dismissal.

Dismissal is unfair if it is not held by an Employment Tribunal to be due either to a Statutory Reason justifying the dismissal, or a genuine Redundancy situation…

Statutory Reason: Under the sections 94 to 107 of the Employment Rights Act (ERA) 1976 these are (English Law being a Common Law system [notwithstanding that it is increasingly, sometimes controversially, becoming less so as expected by way of compliance with European Law which is a Codified Law system], considerably affected by precedent in interpretation and application –except where express in the Statutes)…

...a.. i. Inherent incapability -inaptitude ~in Blackman -v- Post Office 1974 the employee repeatedly failed a test, was neglectful (but, in Davidson -v- Kent Meters 1975 there was an expectation that the employer, normally, should train or give another job).

ii. Unqualified –Incompetence ~but.. in Lister -v- Thom & Son 1975 there was no reference to the necessity of that qualification in the employee’s employment contract.

...b.. i. Long Term Sickness ~but in Coulson -v- Felixtowe 1975, a sympathetic and sensible balance should be applied by the employer to the employee’s sickness.

ii. General Ill Health ~in Wiles -v- Fores 1976 the work pattern and the effect of the employees ill health on it was relevant; but, in Spalding -v- PLA 1977 the employer should give it time to ascertain that.

...c. Misconduct of the employee at the workplace ~if in reason justifies it; and, in Morrish -v- Henleys 1973 an employee was entitled to refuse to comply with any unlawful instructions.

...d. Statutory Restriction (if the employer would otherwise be in breach of the law): in Appleyard -v- Smith 1972 the employee was disqualified, and there was a requirement by an Act of Parliament that the employer should only employ qualified persons; and, in Gills -v- Wells 1977 the statutory restriction related to Food Regulations.

...e. Other Substantial Reason justifying the dismissal of the employee: in Wilson -v- Underhill 1977 and as in Foot -v- EGT 1972 the employer had satisfactorily shown a sound business reason necessitating the employee’s dismissal.

Under the Employment Act (EA) 2002, section 13.2, dismissal is deemed automatically unfair if there has been failure on the part of the employer (unless the employer can show that the matter was such that it would not have made a difference) to have regard, as a minimum, to the ACAS Code of Practice on Disciplinary and Grievance Procedures.

If the employer follows procedures different than ACAS's, they must be shown by the employer and judicially held to be better than ACAS's.

The employee's award may be reduced if prior to dismissal the employer offered a hearing under such procedures but the employee unreasonably refused to attend.

After Dismissal, the employee is expected to write to the employer and complain, allowing 28 days for a reply, and also to consider settlement through ACAS, before complaining to Employment Tribunals.

3. Redundancy as Unfair Dismissal, unless the employer can show it to be lawful –i.e., that the employer…

...a. Totally Ceased Trading ~in Gammel -v- Dorngavil 1967 the employee still had to be paid for the 13 weeks full time repairs work.

...b. Changed Place of Business ~in Atomic Energy -v- Claydon 1974 unless the employee unreasonably refused to continue to be employed at the new workplace.

...c. Surplus of Labour: e.g., if clearly so has dropped business that reasonably necessitated reducing the number of the employees, or if, e.g., necessary modernization genuinely made the skill of the employee no longer needed ~but, in Fuller -v- S Bowman Ltd 1977 not if the employee refused to accept an alternative suitable job offered by the employer.

If the employee has not been with the employer long enough to qualify to claim Unfair Dismissal at Employment Tribunals, the employee may claim damages for Wrongful Dismissal under Contract Law if it can be successfully shown that the Redundancy stated as a reason for the Dismissal was in fact a breach of the employment contract for a reason that did not constitute a good reason.

Remedies for Dismissal are almost exclusively sought through the Employment Tribunals, and also where a Redundancy situation is disputed it is treated as an Unfair Dismissal complaint.

If complaining of Unfair Dismissal over a public interest or health and safety issue –e.g., whsitleblowing, the employee may apply within 7 days to Employment Tribunals for Interim Relief –for his wage or salary to be ordered to continue to be paid, until the matter is determined.

Complaints to Employment Tribunals must be made within 3 months of the dismissal. If in relation to complaining to the employer after dismissal, on application this may be extended to 6 months.

The remedies available through the Employment Tribunals are of three types, as follows.

1. Reinstatement or Re-engagement: the employer is ordered to give the dismissed employee back the same job with back pay; or re-engagement -if that job is unavailable with comparable pay and back pay another job –on average these happen in only 1.5% of cases... unless…

a. the employee has not specifically asked for it, or..

b. the employee is held to have contributed to his own dismissal, or…

c. the job no longer exists -if it is a case of genuine redundancy, or..

d. the working relationship irreparably broke –usually if the employer is a small business.

2. Compensation: If this is what is what the employee claimed, or if the employer refuses to comply with an order to reinstate or to re-engage. This is the most common case, and comprises primarily of two awards…

...a. Basic Award -based on… age group.. times.. length of service.. times.. one week’s basic pay.

Age at dismissal: 18-21 @ 0.5… 22-40 @ 1… 41-65 @ 1.5 times a week’s pay.

There are statutory limits; if the wage is higher the remainder is disregarded in calculations. This maximum is based on the national average wage and annually increases linked to inflation.

...b. Compensatory Award -additional, actual economic loss, e.g.…

i. immediate loss of wages -from the date of dismissal to the date of the judgment.

ii. manner of dismissal –if, e.g., emotional upset caused longer unemployment.

iii. future loss of wages and benefits –e.g., likely unemployment or retirement, pension, redundancy, company car.

iv. loss of protection against unfair dismissal and redundancy -except if employee is held to have contributed to his dismissal, or to have failed to mitigate his loss.

3. Additional award – 26 to 52 weeks pay if the employer is ordered to re-instate or to re-engage, but refuses to do so –unless shows satisfactorily that it would be impracticable to comply.

The Employment Tribunals may not award for non-economic loss for ordinary Unfair Dismissal (Dunnachie –v- Kingston upon Hull City Council 2004). If Unfair dismissal is under the Equal Opportunities, e.g., Racial or Sex Discrimination legislation they may award also for, e.g., injury to feelings (calculating on the basis of Vento –v- West Yorkshire Police 2002) –but not in Equal Pay cases (Newcastle upon Tyne Council –v- Allan & Others 2005). But dismissal is held to be unfair, or is because of whistle-blowing in the public interest or a health and safety related issue, there is no limit on the amount that the Employment Tribunal may award.

In the case of dismissal due to absence, if there is a medical certificate that may go against the employer…

In the case of dismissal on grounds of alleged theft by the employee, if the employer claims to have investigated but can not present evidence of it, or has not allowed an internal appeal, that may be considered by the Employment Tribunals unreasonable and the dismissal unfair.

The employment laws in the European Convention countries vary in detail, and of some states of the European Union are considered more favourable to the employees than in the UK.

These are guidelines. Laws change -always ascertain the current law.

The author has a website at: http://www.geocities.com/eoa_uk