#3645 - Unfair Dismissal Essay - Labour Law

ESSAY 1 – Unfair dismissal: light touch

For an employee, after the qualifying period of one year, to claim unfair dismissal under the Employment Rights Act 1996, he must be able to show dismissal by the employer, via an expiry of a long term contract, constructive dismissal, or other potentially fair reason, and in the latter case, that the employer did not act reasonably. It is correct to say that unfair dismissal law is ‘light touch’ as it imposes few constraints on employers’ powers of discipline and dismissal. In this way managerial prerogative in this part of the employment relationship reins large. Thus “‘economic prosperity’ [of employers] dominates ‘social justice’ [of employees]” (Saunders, 2009). This is unfortunate, especially as the power of dismissal is the “fiercest sanction which backs up managerial authority to direct the workforce” and dismissal law has become the “tail [wagging] the whole dog of employment relation”(Collins). Unfair dismissal is ‘light touch’ by imposing few constraints on employers’ powers of discipline and dismissal in that employers have a wide range of potentially fair reasons to dismiss an employee, the courts are too deferential to the reasonableness of that decision to dismiss, the employee is not able to claim damages for the manner of their dismissal nor can a trust duty be implied into dismissal proceedings or express disciplinary procedures give rise to damages, and finally there are many procedural hurdles for the employee claimant to overcome making it difficult for them to challenge any employer decision.

First, Section 98(1)(b) of the Employment Rights Act includes “some other substantial reason” in addition to those spelled out in subsection (2) for potentially fair reasons for dismissal. The courts’ interpretation of this has been very generous and wide. This ‘light touch regulation’ has allowed employers much greater lee-way in dismissing employees for a whole host of reasons. This means there are fewer constraints on employers’ powers of discipline and dismissal. Examples of the courts’ extension of ‘some other substantial reason’ (SOSR) are bountiful. In Mohamed the court said: “it is always open to an employer to reorganise in the interest of efficiency or economy or for some other reason in the interest of the business” Mrs M was an office supervisor and she had difficulties with two of supervisees who were found to be at fault. The employers separated Mrs M from those two employees with the result that she was deprived of her supervisory role; she refused to accept changes and was dismissed. This was an SOSR dismissal which demonstrates the court’s broad approach and managerial prerogative. InCatamaran Cruises a business in financial difficulties was taken over by new owner who negotiated changes in positions with trade union. Most employees accepted changes but a few did not and so were dismissed. Again this was held to be a SOSR dismissal.

The courts have extended SOSR far too far e.g. Saunders – Mr S was a maintenance man at children’s camp; he was dismissed on grounds of homosexual activities even though he had no contact with children, but his employers thought it not suitable to employ any person with such tendencies. This was held to be a potentially fair reason. In Perkin the Court of Appeal held that dismissal as a result of an employee’s difficult personality was a potentially fair dismissal for SOSR, and in Klusova that a genuine belief that continuing to employ a foreign national would contravene a statutory restriction could be sufficient to show that a subsequent dismissal for some other substantial reason and therefore fair. In Ezsias a surgeon dismissed on grounds of the “fundamental and irretrievable breakdown of trust and confidence” between employee and employer and therefore complex disciplinary procedures which applied only in cases of misconduct not engaged. Lastly, in Dobie council reserved for itself the right to approve the employment or continued employment of any employee of the company, and so D was dismissed by the council following a complaint by a passenger. Again this was held to be a potentially fear reason.

Second, in the case of potentially fair reasons, the final question for the tribunal is whether the employer acted reasonably in the circumstances in treating the reasons as sufficient for the dismissal (Section 98(4) Employment Rights Act 1996). The first ‘light touch’ issue example here is demonstrated by Orr – an employer cannot be deemed to have knowledge of all the facts known to its employees when deciding whether it was reasonable for it to dismiss. As long as a fair and thorough investigation has been carried out, it is only the facts known to the decision maker that are relevant in determining whether the dismissal was fair. The tribunal must assess the reasonableness of the employer’s conduct, not the level of injustice to the employee, in determining the fairness of the dismissal.

More substantially demonstrating a ‘light touch’ approach conferring few constraints on employers discipline and dismissing employees is the band of reasonableness test developed in Iceland Frozen Foods. Browne-Wilkinson J said that “tribunal must not substitute its decision as to what the right course to adopt for that of the employer”, and thus the employer is protected as long as he acts in a band of reasonableness. This affords the employer a high degree of discretion and demonstrates a high degree of managerial prerogative. As Morrison J in EAT in Haddan said: “the mantra ‘the band of reasonable responses’ is not helpful because it has ld tribunals into applying what amounts to a perversity test...one is conjuring up the possibility of extreme views at either end of the band or range.” This is close to a Wednesbury unreasonableness test in public law. Haddon was employed for 15 years, but when he went to get a good service award, he got drunk at the ceremony so wasn’t allowed to work the shop floor as one manager told him to go home. He was dismissed the next day for failing to carry out a lawful and reasonable order of the other manager who said he was to go back to work after ceremony. The tribunal held that whilst many employers wouldn’t have dismissed in these circumstances, it could not be said that no reasonable employer would not have done. The band of reasonableness test is particularly pertinent in the case of substantive fairness for it allows employers in the middle ground to express their prejudices as in Saunders.

Collins (2000) states four lucid reasons with why this ‘light touch’ approach is unprincipled and problematic. First, the test tends to endorse the employer’s disciplinary riles, so that provided the employer applies...