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Employment Law Solicitors - Unfair Dismissal Claims
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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:-
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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).
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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:-
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Capability or qualifications such as dismissal on the
grounds of incompetence, lack of ability/aptitude,
ill-health, etc
-
Misconduct such as disobedience, theft, etc
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Redundancy (see
section on redundancy)
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Statutory illegality: the employee could not continue to work without contravention of a statute (e.g. a delivery driver who loses their driving licence).
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‘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.
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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:-
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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.
-
Step 2: Disciplinary meeting. Employee should
be notified of decision post meeting and advised of
their right to appeal.
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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:-
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DDP not followed = automatic unfair dismissal
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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.
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Reason for dismissal unfair = unfair dismissal.
-
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:-
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Years of service below 22 years of age, the weekly pay is multiplied by 0.5
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Years of service between age 22 and 41, the weekly pay is multiplied by 1
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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:-
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Employee unreasonably refused offer of reinstatement.
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Employee partially responsible for own dismissal.
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Misconduct by employee prior to dismissal, whether
connected with the dismissal or not
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Redundancy payments paid in dismissals related to
redundancy.
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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:-
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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).
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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.
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Loss of fringe benefits: Health care, company car, free
meals, accommodation, etc.
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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.
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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).
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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.
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Expenses: The cost of finding new employment, for
example.
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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.
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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:-
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redundancy payments paid
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any payments made to the employee including ex-gratia payments
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welfare benefits paid
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employee partially responsible for own dismissal
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no attempt by employee to find new job or employee unreasonably refused
appropriate new job
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dismissal was for a ‘fair reason’, but the procedure followed was unfair
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employee would have lost their job anyway at some future point (e.g. redundancy)
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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.
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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
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