The Corners of the Statute of Unfair Dismissal - Term Paper Example

Unfair Dismissal Introduction The reality of a dismissal is a critical jurisdictional aspect in the laws pertaining to redundancy and unfair dismissal. In majority cases dismissal is evident, but in cases of uncertainty the onus is on the claimant to establish that he/she is dismissed and in case of failure, the case can’t be further proceed. Unfair dismissal establishes the main component of current employment law, contributing more realistic solutions than provided by the common law for majority of employees1. An early victory in this field was its consequences in setting a reasonable procedure at the vanguard of an employer’s brain when reflecting dismissing or disciplining an employee. Just above 40% of the cases dealt by tribunals annually concern chiefly unfair dismissal claims. This paper attempts to explore the various corners of the statute of unfair dismissal, initiating from its statutory definition, its historical development, reasons for fair dismissal such as misconduct, redundancy, incapability and reorganization, its discriminatory applications, the advantages associated as well as the remedies offered by the employment tribunal in case if the dismissal is proved to be unfair2. Dismissal Defined Dismissal is certainly a fundamental concept in the employment law so to explore the subject first define the term ‘dismissal’. It is defined for the aims of redundancy and unfair dismissal in Employment Rights Act 1996, sections 95 as well as 136 respectively. Although the definitions are identical and conceive of dismissal developing in any of given three situations: In case the employment contract has been ceased by the employer after notifying or without notifying; In case a limited –term contract terminates or expires devoid of renewal; In case if the contract has been terminated by the employee, after notifying or without notification, in conditions providing him the entitlement to terminate without notifying the employer due to employer’s conduct. The last clause of the dismissal definition entails “constructive dismissal” where an employee is forced to resign due to certain actions of the employer3. Unfair dismissal The term unfair dismissal in context to law is used for termination of an employment contract for inadmissible or unfair reasons. In case, such an act is challenged within a court, by the affected employee, then the employer is needed to establish that the termination was based on a significant reason such as deficiency of qualification, gross misconduct, and incapableness to execute assigned responsibilities, or redundancy. While deciding such cases, the statutory rights of employee are taken into consideration by the court4. Unfair and Wrongful Dismissal The terms ‘unfair dismissal’ and ‘wrongful dismissal’ seems similar but within the United Kingdom, the terms are rather unalike as wrongful dismissal is referred to when the employment contract is terminated by the employer in order to dismiss the employee or forcibly causing an employee leave. It is established on the basis of contract law. While unfair dismissal involves without notification termination of employment by the employer. Thus resigning from an employment under constructive dismissal may be regarded as a wrongful dismissal case. Historical Development of Unfair Dismissal Statute in United Kingdom The history of the formulation of law of unfair dismissal dates back to year 1971, since it was made a part of Industrial Relations Act. It is a statutory creation. Therefore the right of avoiding from being unfairly dismissed only subsists if legal conditions are fulfilled. The unfair dismissal statute was re-enacted in the initial Schedule to the Trade Union and Labour Relations Act 1974, modified by the Employment Protection Act 1975. This statute was amalgamated in 1978 with the Contracts of Employment Act 1963 along with the Redundancy Payments Act 1965 into the all-inclusive "Employment Protection Act 1978". It was repealed and substituted by Consolidation Acts 1996. Under Employment Act 2002, since October of 2004 provided that any employee may generally be unable to claim an unfair dismissal in the tribunal unless the minimum attempts mentioned in the statutory exhausted to settle the issue "out-of-court”. This apparently humble development may bear to acclaim the largest single alter, from a pragmatic instead of a legal viewpoint, to the employment tribunal and unfair dismissal authorities since it started as it may eliminate simpler cases. Though majorly of this lawmaking was later annulled, the measurements concerning to employment tribunal and dismissal have continued on the written record and have formulated over time as novel regulations have been brought in and legal model set. For a period, the fundamental principles have been well instituted, and build the ground of the mode in which dismissals are executed by majority of employers5. The Right to Claim Subject to specific exceptions, the section 94 of the Employment Rights Act 1996 provides the right of avoiding from being unfairly dismissed to every employee within the United Kingdom. But there are two fundamental qualifications that are required to be fulfilled prior to lodging such a claim. The first one necessitates that the employee should have been dismissed while the second qualification necessitated that the since the effective termination date, the employee must have been employed and continued working with the employer for a period of two years, w.e.f. 6th April 2012, unless fired for a reason submitted particularly not to necessitate such qualifying service, such as one pertaining to non-membership or membership of a trade union, health and safety matters, maternity, declaration of statutory rights. Qualifying Period Initially, this period was six months, but it was raised by the previous government, initially to a year in 1979 and then to two years in 198.Generally, a case can simply be brought against an employer under unfair dismissal statute if the employee has been working for minimum 51 weeks and a day but if the employment period initiated after 6th April 2012, the qualifying period for the claim has to be minimum 103 weeks and a day, unless the employee has been dismissed on grounds such as exercising a legal employment right like maternity leave, being pregnant, joining or resisting from joining a trade union, whistle-blowing, discrimination form and safety and health issues6. Exclusions Unfair dismissal statute is proposed to protect employees from being fired from their employment without a justifiable and valid reason. The cases regarded as unfair dismissal are comprehensively defined. Various cases which may be regarded to be obvious instances of unfair dismissal can also be carried on thru a distinct employment law area such as whistle-blowing and discrimination legislation. Rights of Unfair dismissal are handled differently. Part-time employees had been excluded for several years (indirectly, the employees working less than sixteen hours in a week were disqualified from the qualifying criteria for lodging an unfair dismissal claim) but in 1995 it was repealed. But the exception that led to extensive litigations and most difficulty involved claims from employees over the normal retirement age or 65 years. The exception was however annulled with the development of the Employment Equality (Age) Regulations 2006. Thus the upper age limit for lodging a complaint in the employment tribunal was eliminated. The instituted rule from the Supreme Court (House of Lords) decision in 2006 case Lawson v Serco Limited was that those employees residing out of UK can merely rely on English law of unfair dismissal law in very limited circumstances as mentioned below: Peripatetic or mobile employees like air host/ hostess, can rely on UK unfair dismissal statute if they are based within UK. Expatriates that are based completely out of United Kingdom but were recruited within United Kingdom under special circumstances such as foreign correspondent of English news agency. Before Lawson v. Serco decision, confusion was prevailing regarding case law on the territorial ambit of rights of unfair dismissal. Unluckily, in 2010, the case of Ravat v. Halliburton Manufacturing and Services Limited seems to have developed further confusions by slightly enhancing the principles of Serco7. In the Halliburton case, the Jury decided that an employee working outside the territory of United Kingdom to depend on English unfair dismissal legislation on the grounds that his contractual matters were handled within UK as well as he paid UK taxes. But since the Halliburton case was decided by the Court of Scotland which lies below in the UK courts hierarchy to House of Lords. Therefore it lacks binding impact on Employment tribunals or courts in Wales and England and only provides a persuasive impact. So it may be considered as an aide but the decision will be based on Serco principles. Employers in Scotland may experience difficulties as Scottish Courts may abide by the Halliburton case. However, it is binding on them to follow Serco and hence is obliged to utilize it for interpretation of categories decided in Serco. Overall, the chances of employees working and residing out of UK to claim unfair dismissal within UK are less and they should only be allowed in special circumstances as those laid out in Serco 8(Smith, 2012) (Davies, 2011). Besides the above mentioned categories of exclusions, there are three other exclusions which are comparatively certain and longstanding. First one includes two particular categories of employment one is fishermen and the other is police, second include employees regularized by a dismissal procedures arrangement between trade unions and employers within the industry, assigned by the Secretary of State as functioning in replacement for the legal strategy, and the third one involves employees dismissed for the purpose of protecting national interest and security. Fair Grounds for Dismissal The instance an employee has been established to be dismissed the responsibility then progresses to the employer, in accordance with the section 98 of the 1996 Employment Act, to demonstrate two things, first one to be the reason behind the dismissal or the main intent behind the dismissal while second is if the dismissal was based on the grounds of six fair reasons. These are mentioned below. (a) If the decision of dismissal was based on the qualification or capability of the employee in context to his/ her work, (b) If the reason was pertained to the conduct and behavior of the employee, (c) If it was to retire the employee, (d) The decision of dismissal was based upon the redundancy of employee, (e) The employees were unable to continue working in their existing position without infringement of a legislative provision, (f) Or any other justifiable reason for the dismissal9. Remedies and Compensation Among various remedies offered by the employment tribunal, reengagement or reinstatement is one. However the tribunal cannot impose this reengagement on the employer so if the employer refuses, more compensation to employee as an extra award may be ordered. Besides the extra award, the basic award calculated as redundancy pay using formula based on number of service years, age and gross weekly pay matter to at the most £330/week since 1st February 2008. The employer is also obliged to provide compensatory award comprising of loss of pension and net earnings for a period decided by the tribunal maximum up to £63,000 since 1st February 2008. In case if the employee is unable to find a new job, then the tribunal will not award him/ her full earning loss10. The compensation may be reduced if the unfairness of claim is merely procedural but based upon a fair reason as well as the on the basis of employee’s conduct towards his/her dismissal11. According to Employment Bill, the compensation may be either increased or reduced by 25% if any of the party fails to follow the guidelines in a Code that will be issued. The Work and Pensions Department will reimburse benefits claimed by employee such as allowance for job seeker from the award provided for loss of earnings.12 Recent Developments The annual rate of claims in the United Kingdom regarding unfair employment fell to 46300 from 47,900 to 46,300 since April 2011 to March 2012. The median award during this period was found to be £4,560. The maximal compensatory award as of 1st Feb 2012, for unfair dismissal was £72,300. The qualifying period for unfair dismissal was increased from one year to two year for employees who have been employed since 6 April 2012. Since 6th APRIL 2012, the employment tribunal judges may hear claims of unfair dismissal while sitting alone previously a panel of three judges was mandated to hear such claims. Government has been proposing various amendments in the statute like imposition of fees on claimant of £250 for lodging a claim and £950 for hearing. ACAS conciliation has been proposed to be mandated prior to the claim, the maximal Compensatory Award will be provided a range depending upon the employer’s size from £26,000 to £78,000 or 12 months’ salary or whichever is the lower1314. Advantages and Disadvantages The Unfair dismissal statute provides a comprehensive way to safeguard the rights and social and economic conditions of employees. The detailed guidelines provided restrict the employers from taking such actions. Once a dismissal claim has been placed, proceedings involve employer to provide the reason for dismissal and proof it to be fair. Thus the advantageous effects are associated to employees but it also protects employers from unnecessary claims by providing the exclusion criteria. Conclusion The unfair dismissal statute is of utmost importance among various employment laws as it protects the employees from being unfairly fired from their job. The procedural guidelines provide an ease of access for the employee to lodge a claim as well as the tribunal proceedings require the active participation of employer. This statute has provided a basis for dismissal cases resolution apart from common law. It provides the guidelines where a dismissal may be unfair. The exclusion criteria control the unnecessary claims. The government has been proposing necessary changes in the given statute and it can be referred as an evolutionary legal framework that has been modified for providing benefits to both parties. References ASHBY COHEN SOLICITORS LTD. ‘Unfair Dismissal Law’. Ashby Cohen [web page] (2012), , accessed 26th November 2012. BBC NEWS. ‘Cable to cap unfair dismissal payouts’. BBC [web page] (14 September 2012) , accessed 26th November 2012. 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MORTON FRASER. ‘Unfair Dismissal Developments In A Nutshell’, Morton Fraser [web page] (5th November 2012) < http://www.morton-fraser.com/blog/employment/3200_unfair_dismissal_developments_in_a_nutshell >, accessed 26th November 2012. SMITH, H. ‘International secondments: legal and practical issues for companies managing overseas workers’ [web document] (2012) , accessed 26th November 2012. TAYLOR, S. People Resourcing 3/E (CIPD Publishing, 2005). THOMSON REUTERS. ‘Does your employer have a fair reason to dismiss you?’ Findlaw [web page] (2012) , accessed 26th November 2012. WINTOUR, P. ‘Unfair dismissal compensation cap to be cut to encourage hiring of new staff’, Guardian [web page] (14 September 2012), , accessed 26th November 2012. Read More