Employment Law Solicitors: Unfair Dismissal Claims   Bringing An Unfair Dismissal Claim Tribunal proceedings in relation to an unfair dismissal claim must be brought within 3 months of the ‘effective date of termination’ of employment The prerequisites for bringing an unfair dismissal tribunal claim are that the employee must actually be an employee (as opposed to an independent contractor), have had at least 1 year’s continuous employment with the employer, and must have followed the statutory grievance procedure where they are claiming constructive unfair dismissal. The fairness or otherwise of a dismissal is determined via a 3 stage process:-

1. Stage 1: The employee must prove that they were unfairly dismissed. If the employee resigned, then there is likely to be a dispute over whether there has been ‘constructive dismissal’ (See section on constructive dismissal).




2. Stage 2: The burden is upon the employer to show that the dismissal was for a ‘fair reason’. There are only 5 acceptable fair reasons for dismissal in law which are:-




1. Capability or qualifications such as dismissal on the grounds of incompetence, lack of ability/aptitude, ill-health, etc 




2. Misconduct such as disobedience, theft, etc




3. Redundancy (see section on redundancy)




4. Statutory illegality: the employee could not continue to work without contravention of a statute (e.g. a delivery driver who loses their driving licence).




5. ‘Some other substantive reason’: One reason classified as a fair reason for dismissal is where a customer exerts pressure on an employer to dismiss the employee, perhaps the stupidest reason ever classified as ‘fair’. By any moral standards of reasonableness, this is most definitely not a fair reason and it should be reclassified in statute as an automatically unfair reason for dismissal to prevent bad employers using it as an excuse, and as a deterrence against allowing customers/clients to exert undue influence over an employer. Another so called substantive reason which has been classified as fair is where an employee refuses to accept new contractual terms of employment. Again, this is another somewhat dubious reason and whether it is a valid fair reason would turn upon the facts of the given case.




3. Stage 3: Procedural fairness: fair implementation of the fair reason for dismissal. Employers must follow the statutory dismissal and disciplinary procedure (DDP) at the very minimum when dismissing an employee or taking relevant disciplinary action for the procedure to be fair. The DDP is a 3 step procedure which is as follows:-

    

   1. Step 1: Letter from the employer to the employee setting out the circumstances which have led them to consider dismissal or disciplinary action. The letter should also invite the employee to a disciplinary meeting and the employee should be provided with sufficient time to prepare for it.

       

   2. Step 2: Disciplinary meeting. Employee should be notified of decision post meeting and advised of their right to appeal.

       

   3. Step 3: Appeal. Employer should appoint a more senior manager to represent them at the appeal.

   Should the employer fail to follow the DDP (note: DDP does not apply to collective redundancies of 20 employees or more) and proceed to dismiss the employee, the dismissal would amount to automatic unfair dismissal and the employee would be entitled to claim an up to 50% uplift in compensation on what they would otherwise expect to receive at tribunal. When gauging procedural fairness, the following applies:-

    

   1. DDP not followed = automatic unfair dismissal

   2. DDP followed but employer failed to follow own disciplinary procedure or other pertinent procedure = dismissal not unfair should the employee have ultimate been dismissed had the other procedure been followed.

   3. Reason for dismissal unfair = unfair dismissal.

   4. DDP does not apply (e.g. collective redundancies involving more than 20 employees) and no fair procedure followed = dismissal not unfair should the employee have been dismissed had a fair procedure been followed.

Automatically Unfair Dismissals

The following dismissals are automatically classified as being unfair (i.e. the normal criteria for determining whether a dismissal is unfair do not apply) with certain qualifications (for details pertaining to the qualifications, please refer to the relevant page of this website. In those cases where no details have been provided on the website, please contact us for details either by telephoning us on the above number or by completing the questionnaire opposite as they are outside the scope of this website): seeking adoption leave, asserting a statutory right, a reason connected with the transfer of a business, performing or proposing to perform any function in a role as an employee representative, exercising a right under the Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations 2002, making an application for flexible working arrangements, asserting rights in connection with a health and safety issue, taking part in protected industrial action, in connection with pregnancy, childbirth, or maternity leave, exercising a right under the National Minimum Wage Act 1998, exercising a right to parental leave or additional maternity leave, exercising a right under the part-time work regulations, exercising a right to paternity leave, performing or proposing to perform a function in connection with a role as trustee of a pension scheme, improper selection for redundancy, failing to disclose a spent conviction, shop or betting workers refusing to work on a Sunday where they have not previously agreed to do so (where they have agreed, they can revoke that agreement by giving 3 months notice), claiming for a tax credit, exercising a right to have time off to care for dependants, exercising a right to have time off in relation to trade union or union learning activities, whistle-blowing, exercising a right under the Working Time Regulations 1998, exercising a right to have time off in relation to Works Councils activities, being called for and carrying out jury service, exercising the right to accompaniment re a disciplinary or grievance hearing (whether they are the person being accompanied or the companion), and exercising a right under the Information and Consultation of Employees Regulations 2004.

With respect to many of the above, the dismissal will be automatically unfair even if the employee does not yet have 1 year’s continuous employment with the employer. However, it is outside the scope of this website to outline the precise rules on this point with respect to each individual case. For clarification on the point, therefore, please contact us either by telephoning us on the above number or by completing the questionnaire opposite.

Where the employee is dismissed and the DDP has not been followed, the dismissal would be automatically unfair. Nevertheless, the employee is only be entitled to bring an unfair dismissal claim in these circumstances should they have at least 1 years continuous service with the employer.

Remedies
A tribunal has 3 possible remedies at its disposal: reinstatement, re-engagement (reinstatement but in a different role), and compensation. Compensation is the most common.

Compensation
There are two elements to any compensation award: the basic award and the compensatory award.

The Basic Award
Compensates employees for the loss of job security following dismissal and is calculated according to a formula based upon age, length of service and average gross weekly pay. The figure for average weekly pay is capped at £330 per week maximum and only the most recent 20 years will be taken into account in terms of length of service. The basic award is calculated in detail as follows:-

• Years of service below 22 years of age, the weekly pay is multiplied by 0.5




• Years of service between age 22 and 41, the weekly pay is multiplied by 1




• Years of service from age 41 onwards, the weekly pay is multiplied by 1.5

Accordingly, the maximum basic award is 20 years at £330 x 1.5 = £9,900.  

Where the DDP has not been followed, the tribunal can award 4 times a week's pay.

The Basic Award may be reduced by the Tribunal in the following circumstances:-

1. Employee unreasonably refused offer of reinstatement.

2. Employee partially responsible for own dismissal.

3. Misconduct by employee prior to dismissal, whether connected with the dismissal or not

4. Redundancy payments paid in dismissals related to redundancy.

5. Ex-gratia payments paid.

Where an employee is dismissed for a reason connected with their role and they were an employee representative, an occupational pension trustee, a trade union member or representative, or a safety representative (or were in the process of becoming a safety representative), then the absolutely minimum basic award is £4,400.00, although this may be reduced for one of the permitted reasons outlined above.

Where the reductions in the basic award exceed its value, then the remaining deductions can be taken from the compensatory award.

The Compensatory Award
The compensatory award compensates the employee for financial loss sustained as a result of the dismissal at a level which the tribunal determines is ‘just and equitable’. The award is subject to a cap which is revised on the 1st February each year. From the 1st February 2007, the maximum award is £63,000. It is calculated on a net basis and is payable even if the Claimant has reached or passed 65 so long as they are below the employers normal retirement age.

The following elements can be claimed as part of the compensatory award:-

• Loss of earnings (net): This runs from the effective date of termination (i.e. the end of the notice period) until the date of the tribunal hearing. Welfare benefits received during this period will be deducted from the final amount. If the employee was dismissed without notice or pay-in-lieu, then these losses will be added to the award for loss of earnings. Furthermore, earnings received from any new job will not be deducted from that element as they are only taken into account from the point at which the notice period expires (i.e. deducted from the final amount less loss of earnings incurred during the notice period).

   

• Future loss of earnings: This is related to an assessment of how long the employee will be unemployed given their age, experience, and demand in the labour market for their skills. Should the employee have already acquired a new position, then there will be no award for future loss of earnings unless the new position pays less, in which case the award will based upon an assessment of how long the employee is likely to be earning less.

   

• Loss of fringe benefits: Health care, company car, free meals, accommodation, etc.

   

• The manner of the dismissal: Should the employee have been dismissed in a way that makes it more difficult to obtain alternative employment, then this would also be taken into account (e.g. in front of colleagues where news of the dismissal was disseminated throughout the industry within which the employee works). Nevertheless, the tribunal will make no award for ‘injury to feelings’ or any other type of non-economic loss.

   

• Loss of statutory employment protection rights: The tribunal will take into account the fact that the employee will have to work for 1 year before they reacquire unfair dismissal protection. The award for this element is usually in the region of £250.00. The tribunal will also award compensation for the loss of their statutory notice rights. This is normally assessed at half of the employee’s statutory entitlement (e.g. 4 weeks for 8 years service).

   

• Loss of pension rights: The guidelines in the booklet, Employment Tribunals – Compensation for Loss of Pension Rights published by The Stationary Office will usually be followed, although there is no obligation on Tribunals to do so.

   

• Expenses: The cost of finding new employment, for example.

   

• Adjustment For Failure To Comply With DDP: Where the DDP has not been followed, the compensatory award can be increased by a presumed 10%. Nevertheless, the tribunal has the discretion to increase it by up to 50% or even to make no increase at all should it feel that an increase would be unjust and inequitable. In contrast, where the employee has breached the DDP, the award can be reduced by a presumed 10%. Nonetheless, the tribunal has the discretion to reduce the award by up to 50% or even to make no reduction at all should it feel that a reduction would be unjust and inequitable.

   

• Grossing Up Award Where It Exceeds £30,000.00: The employee is liable to pay tax on any tribunal award in excess of £30,000.00. Accordingly, any award in excess of £30,000.00 should be grossed up (e.g. higher rate taxpayer with net losses of £36,000.00 = gross up to £40,000.00 as £4,000.00 will go to the Inland Revenue).
  

The tribunal can make the following reductions to the compensatory award in the following circumstances:-

1. redundancy payments paid

2. any payments made to the employee including ex-gratia payments

3. welfare benefits paid

4. employee partially responsible for own dismissal

5. no attempt by employee to find new job or employee unreasonably refused appropriate new job

6. dismissal was for a ‘fair reason’, but the procedure followed was unfair

7. employee would have lost their job anyway at some future point (e.g. redundancy)

8. employee received notice in writing that they could have appealed but did not do so. The award can be reduced by up to 2 weeks pay should this be the case. In contrast, should the employer prevent the employee from appealing, the award can be increased by up to 2 weeks pay.

The basic and compensatory awards when combined produce an overall maximum award of £72,900.00.

The Additional Award
Should the employer fail to comply with a tribunal order to reinstate or re-engage the employee, the tribunal can award 26-52 weeks pay in addition to the basic and compensatory awards.

Protective Award
Up to 90 days pay can be awarded to employees where the employer has failed to consult properly during redundancy consultations.

Award For Failure To Consult During A TUPE Transfer
Failure by an employer to consult during a TUPE transfer entitles each affected employee to an award of up to 13 weeks pay.

 

The Employment Law Solicitors, the brand, is part of Antrobus Solicitors, a firm regulated by the Solicitors Regulation Authority. Details of the professional rules which regulate solicitors can be found at the following website address: http://www.rules.sra.org.uk