#14967 - Employment Claims - Employment Law

Claims

Wrongful dismissal

Contractual claim for breach of contract = damages
REMEMBER - for ET Claims:

• Must arise/be outstanding on the termination. (Capek v Lincolnshire County Council) the COA held tribunals have no jurisdiction to hear claims for breach of contract lodged prior to dismissal

• No damages over 25,000

• No claims for breach of confidentiality/restrictive covenants

• Employer can counterclaim

• Must be within 3 months of termination

Time limit

ET = 3 months of dismissal (Civil = 6yrs of dismissal)

1. Has there been a dismissal?

Actual = sacked

Constructive = Employer commits a repudiatory breach of express/implied term and employee entitled to resign in response (with/without notice) and treat the contract as discharged (must be within reasonable time of breach)

2. Is the dismissal wrongful?
   Actual - No notice/insufficient notice (unless employee conduct caused dismissal) - stat min notice = 1 week per year of employment up to 12wks

Is there a PILON clause?

Yes = no claim

No but money accepted = no breach

No but money received but not accepted as waiving breach = technically still wrongful dismissal but not financially worth pursuing

Boston Deep Sea Fishing v Ansell - pre-dismissal misconduct discovered after dismissal may justify dismissal without notice

Fixed term contracts: pre-expiry is wrongful unless (1) in accordance with terms of a break clause (2) justified by the employee’s gross misconduct

Constructive dismissal - Employer’s repudiatory breach itself renders the dismissal wrongful e.g. breach of implied term of trust and confidence

3. Compensation

• Damages for breach of contract - for proper notice period or until end of fixed term (unless break clause)

  • must not be too remote

  • must either arise naturally from the breach or be such as may reasonably be supposed to have been in the contemplation of both parties at the time of contract, as the probable result of the breach (Hadley v Baxendale)

  • Purpose is to put C in position had they not have been wrongfully dismissed

• PLUS additional contractual losses (e.g. commission, health insurance, car, bonuses that were contractual)

  • Pension - 2 types: loss of the pension position earned to the date of dismissal, and loss of future pension opportunity.

  • Holiday pay – Payment in lieu of any holiday entitled to but had not yet taken - max 2yrs back pay

• Reducing factors

  • Payments made (e.g. Payment in lieu - deducted from damages)

  • Certain benefits (e.g. jobseekers/income support)

  • Duty to mitigate (must look for another job and not unreasonably reject for notice period)

  • Accelerated receipt (any payment made before it was due i.e. for long term fixed terms where payment of damages paid before the salary would have - used to minimise benefits from early payment such as interest accrued)

• Employment tribunal – maximum award 25,000

• Civil court – no maximum

• PLUS ACAS - increase/decrease by 25% for unreasonable compliance with ACAS code

Unfair dismissal

1. Eligibility (burden of proof on employee)

• Time limits - 3 months (less 1 day) from EDT

• Effective date of termination = date the notice expires, or the date termination takes effect (s97/145 ERA 1998)

• Employee - not worker/self-employed

• 2 years’ service (for employees employed by current employer on or after 6 April 2012; 1 year for all others)

• Not be part of an excluded class

2. Dismissal (burden of proof on employee)

• Expiry/non-renewal of fixed term contract

• Actual – sacking with or without notice

• Constructive dismissal – employee resigns as result of employer’s repudiatory breach of contract and treats contract as discharged (Western Excavating v Sharp)

3. Reason for dismissal (ERA 1996, s 98(2)) (burden of proof on employer)

• What is the main reason for the dismissal? - will be potentially fair if one of the 5 reasons. If not = unfair

• Does that reason fall within one of the five potentially fair reasons?

  • Redundancy – will be unfair if redundancy is not dealt with fairly however

    • NB If reason is redundancy, consider claim for both unfair dismissal and a redundancy payment

  • Conduct – any misconduct, usually in the course of employment but may also be outside of employment if it has an effect on the employment relationship

  • Capability/qualifications – incompetence or inability due to skill aptitude, health or other physical/mental quality to do the work for which they were employed

  • Illegality – where it has become illegal either under statute for the employee to work or for the employer to employ

  • Some Other Substantial Reason – covers anything outside the above 4 but onus on the employer to show dismissal for SOSR is fair (e.g. readjustment of hours, replacement by better qualified person, clash of staff personalities, risk of damage to reputation)

4. Consider fairness of dismissal (ERA 1996, s 98(4))

• Question of fact for tribunal

• S98(4) – should consider first – fairness depends on size and administrative resources of employer (smaller firms may have more reason to dismiss and replace for example), equity (long service = more consideration), sufficiency of the reason given by the employer (Range of Reasonable Responses), substantial merits (fair, consistent, main cause of dismissal)

• Test – Range of reasonable responses (Iceland Frozen Foods) – will be reasonable if the reasonable employer, in the circumstances would consider the dismissal a reasonable response (sufficient to know that a reasonable employer would – doesn’t need to be all employers)

• Should be based on information available to the employer at the time of dismissal.

• Procedural fairness (depends on reason) – dismissal may still be unfair for a fair reason if fair procedure isn’t followed

  • ACAS Code – not legally binding, but persuasive

    • should be applied for conduct/capability dismissals

    • doesn’t apply to redundancy or end of fixed-term

    • doesn’t make automatically unfair just discretion for a 25% adjustment

    • doesn’t require grievance to be raised first, but failure to do so reasonably will likely result in deduction of up to 25%

  • Procedure for disciplinary matters:

    • Establish facts

    • Inform employee of problem

    • Hold a meeting with employee

    • Allow employee to be accompanied

    • Decide on appropriate action

    • Provide an opportunity for appeal

  • Capability/Qualification – ACAS distinguishes between incompetence (factors: can employee be moved to job within capability) and sickness (factors: nature, duration, length of service, need of employer)

  • Conduct – should follow ACAS procedure (above) – careful to determine misconduct and gross misconduct (GM allows for automatic dismissal without notice, misconduct does not), warnings should be given (should be advised when dismissal is likely), suspension, investigation – should follow internal procedures is key

    • BHS v Burchell – can be fair if: (1) genuine belief in guilt (2) reasonable grounds for belief and (3) carried out reasonable investigation

  • Redundancy – Polkey v Dayton – fair dismissal for redundancy is (1) warning / consultation (2) fair selection (i.e. pool of selection) (3) alternative employment

  • Illegality – employer should take steps to redeploy employee where possible

  • SOSR – too broad for specific guidance –just follow general principles of fairness

5. Remedies

• Reinstatement (old job back)

• Re-engagement (job elsewhere in business)

• Compensation

  • Basic award:

Age factor (12/1/112) x Gross weekly pay (max 479 from 6 April 2016) x no of complete years’ service at that age factor (max 20 years) (EA 2002, s 38)

May be reduced by amount proportionate for C unreasonably accepting offer of reinstatement and their pre-dismissal conduct

• Compensatory award (consider heads of loss/deductions)

  • Max 78,335 or 52 weeks’ gross pay from 6 April 2015 (applies only to comp award)

  • Immediate loss of net earnings – from dismissal date to date of hearing or the date employer finds new job if earlier

  • Future loss of earnings – from date of hearing to date of employment (court estimates likely date) – no payment if already employed by hearing

  • Pension – contributions would have earned from date of dismissal until date of new employment (as estimated by court)

  • Loss of statutory rights – usually 350 for loss of accrued redundancy rights (exceptionally awarded half a week’s net pay for statutory notice period he would’ve been entitled) – double contingency

  • Expenses for looking for work

  • Compensation for delayed payment

  • Mitigation – duty to mitigate losses by seeking alternative employment for notice period – failure = deduction from award (cant unreasonably refuse work)

  • Polkey deduction – would employee have been dismissed even if proper procedure had been followed? If yes – deduction up to 100% of award will be made

NB - ACAS - increase/decrease by up to 25% for unreasonable failure to follow ACAS Code

Redundancy

1. Eligibility

• Time limit – 6 months from payment, written notice, employment tribunal or unfair dismissal claim (s184 ERA 1998)

• Employee – not worker/self-employed – employment contract or referred to as employee is sufficient

• 2yrs continuous employment –must be continuous (s155)

• Excluded class?

2. Dismissal?

• Contract terminated by employer with or without notice

• Fixed term contract expires without renewal

• Constructive dismissal

3. Redundancy situation?

• Redundancy – job redundancy, place of work redundancy, employee redundancy – will be a rebuttable presumption of redundancy if disputed.

  • Job redundancy = an employee dismissed by reason of the closure of the employer’s business

  • Place of work redundancy = the place where the employee is employed is being relocated (question of fact –...