UK Employment Law - Essay Example

?In 1968, a Royal Commission Report d: “In the eye of the law employer and employee are free and equal parties to the contract of employment..............Thus, an employer is legally entitled to dismiss an employee whenever he wishes and for whatever reasons, provided only that he gives due notice.” Discuss how far this statement is still true with reference to wrongful and unfair dismissal claims. Introduction Under UK employment laws , an employee is one who is working under a contract of employment and the contract may be in writing, or it may be implicit subject to terms and conditions mentioned under the employment contract1. Before the enactment of the Industrial Relations Act 1971 and the Employment Protection (consolidation) Act 1978, an employer had unlimited rights to dismiss an employee for any reason or for no reason with few exceptions2. However , scenarios have changed a lot after introduction of the abovementioned legislations. Now, if an employer has terminated an employment contract of an employee either under unfair dismissal or under wrongful dismissal, an employee can seek relief under any of the following processes ; a claim can be made under common law for wrongful dismissal , or a claim can be made under ERA (Employment Rights Act) 1996 for unfair dismissal or a claim can be mader under Pt XI for redundancy or Pt II under ERA,19963. Though , under UK law , an employer is legally entitled to dismiss an employee whenever he wishes and for whatever reasons, provided that he gives due notice in this regard but this right has to be used judiciously and without ulterior intention . If an employer has not conducted an intenral enquiry or not followed correct disciplinary procedures , then , an affected employee may approach the employment tribunal or courts in UK against his unfair or wrongful dismissal4. This research essay will discuss about the legal remedies available to employees in UK against any unlawful or wrongful dismissal made by their employers in detail by critically examining various case laws available on the subject. Analysis An employer can dismiss an employee, if he can attribute a fair reason under Employment Rights Act, 1996 (ERA) . A fair reason includes the following : if the employer is able to demonstrate incapability of the employee ,i.e., not able to perform the duty as anticipated under section 98(2) (a) of the ERA ; or if there is a misconduct on the part of the employee i.e., like declining to accomplish lawful commands of the employer or availing unauthorised leave without prior permission from the employer under section 98(2) (b) of the ERA; or if the employer is able to demonstrate that dismissal is due to redundancy under section 98(2) (c) of the ERA; or if there is a statutory illegality under section 98(2) (a) of the ERA; or on some other substantial reason under section 98(1) (B) of the ERA5 If a person is dismissed unfairly due to his age on the allegation that he is very slow in his work, then, an affected employee may seek protection under s 4 of Equalities Act 2010. Any unfair dismissal due to direct discrimination by an employer will be held illegal under section 13 of the Equalities Act 2010. Instances of direct discrimination include unfair dismissal on the basis of the religion (being a Muslim, unfit to work in a bar), gender (being a woman not fit to work for certain types of jobs), and dismissal of an employee due to his old age. The following are the illustrations of unfair dismissal of an employee by an employer. Dismissing an employee as he asked for flexible working time; declining to acknowledge the working time rights by an employee and insisting to avail rest breaks ; dismissing an employee for his involvement in the trade union activity; making an employee to resign by offering the exact notice period ; dimissing an employee for his participation in legal industrial action for more than three months or less ; for providing jury service , requesting time off by an employee ; dismissing an employee for availing adoption leave , paternity or maternity leave ; Dismissing an employee while he is in the maternity ,adoption or paternity leave ; dismissing an employee as he claimed working tax credits ; dismissing an employ as he involved in whistleblowing activities ; offering compulsory retirement without any valid reason. Compulsory retiring an employee is generally not permitted under UK laws unless an employer can impartially rationalize it and an affected employee can confront the same in the employment tribunal. If an employee is compelled to resign the job against his will due to the demeanour of his employer, then, it will be known as constructive dismissal. Under the following circumstances, an employee may be construed to leave his job against his will. If the employer declines to pay his salary or demote an employee without any reason , then , it will be regarded as constructive dismissal ; or if the employer compel the employee to acknowledge irrational changes in one’s working hours – asking the employee to work in night shifts regularly whereas one’s employment contract speaks for working during the day; or allowing the other employees to engage in bullying or harassing the affected employee.If an employee is of the view that he has been constructively dismissed, he should immediately leave the job as staying in the job will make the employer to substantiate that the employee has acknowledged the treatment or demeanour of his employer6. In case , if an employee feels that he has been unfairly dismissed or constructively dismissed , he can have a remedy for his issue by following any of the under mentioned actions.He can approach the help of a third party to solve the issue with his employer through conciliation, mediation or through arbitration; or he can approach his trade union if he is a member in that union or he can approach the employment tribunal if he has put a minimum service of not less than one year if he has been employed before 6 April 2012 whereas he should have put minimum two years experience if he joined the duty on or after 6 April 2012. Further, with effect from 25 June 2013, if an employee is dismissed due to his political affiliation or opinion, then, there is no need for any qualification period of employment, and an employee has the right to take the issue to the employment tribunal. In R v Secretary of State for Employment, ex parte Seymour –Smith and Perez, it was held by the Court of Appeal that the qualifying period of 2 years in some scenario appeared to be prejudiced7 . It is to be noted that an employee has to make a claim with the employment tribunal within 90 days of his unfair dismissal8. In Western Excavating v Sharp,9 where an employee resigned due to the refusal by the employer to pay holiday wages in advance and claimed it to be constructive dismissal, which was repudiated by the Court of Appeal that it must be a basic infringement which touches upon the foundation of the employment contract thereby making the termination of such employment contract as unfair10. Though , an employer has the right to cancel the employment contract due to incompetence of an employee , but this right should not be misued. The employer must have a fair reason if the dismissal pertains to the capability of the employee for the execution of the work of the type which he is employed for. In Shook v London Borough of Ealing11, it was held that to establish that the dismissal to be fair, it is essential to demonstrate that the employee is not able to carry out all of his contractual duties12. In A J Dunning & Sons (Shopfitters) Ltd v S Jacomb13 , it was held that Jacomb was dismissed fairly for incapability as he falls short of required mental qualities and aptitude to be helpful and cooperative with some important business clients14. Though an employer has the right to dismiss an employee for his undesirable behaviour but this should be used prudently.In Creed v KMP Co-Op Society Ltd15, an employee was alleged to have thrown a piece of fat, which was considered by the employer as dangerous as it could end in accidents and horseplay and hence, he was dismissed after a proper investigation on the matter. As the employer’s action resulted in the prevention of risk of injury to other, EAT held that his dismissal was fair16. If an employee is on unauthorised leave, an employer has the right to suspend the contract of employment but it should be used for genuine reasons.As regards to unauthorised leave or regular absenteeism by an employee, it was held in Qua v JohnFordMorrison Solicitors17, that an employee should inform his employer about the reason for his absence from the duty as early as possible and if the employee fails to notify his absence to the employer properly, he loses his privilege to avail leave and any unauthorised absence will warrant a disciplinary proceeding18. In McArdle v Superquinn19, where an employer had in place stern prerequisites on checkout recording policies and instructed the employees about the significance of the procedures and warned them that any infringement will be regarded as serious offense resulting in summary dismissal..It was held by the EAT that the dismissal was fair as the employer had a meticulous investigation before the dismissal20. In O’Keefe Weber v Terence Casey& Co21, the claimant’s dismissal was found to be fair on the ground of breach of trust as she carried on unofficial work during her duty hours22. In cass of gross misconduct of an employee, an employer has the right to annul the contract of employment .In Neary and Neary v Dean of Westminster23, it was held that an employee who involved in financial wrongdoing will be regarded as gross misconduct and did not necessarily need any deceit or deliberate dishonesty to demonstrate the same24. In British Home Stores v Burchell25 , and in Post Office v Foley HSBC Bank v Madden26 , three limb test was established so as to make the employment tribunal to be convinced that the employer , at the juncture of dismissal that dismissal was not unfair27 where the employer had an authentic conviction in the employee’s guilt of that misconduct ; or if he had an adequate basis to hold that conviction; or if he made such an investigation as was rational in all the scenarios. It is to be observed that the first limp pertains to fair reason whereas the second and third are related to rationality of the decision to dismiss. In case , if there is a breach of disciplinary procedure , an employee can approach either the employmnet tribunal or the court for the redressal of his grievances.In McKenna v Butterfly28, the claimant had an understanding with his employer that he could avail leave on a short term notice for taking her sister for a medical check up. One of the director of the company followed him one day and found that he took leave to play golf and not for his sister’s medical treatment. The EAT held that there was an infringement by the employer of his own disciplinary procedure as they had not given the employee an opportunity to make an appeal against his dismissal by awarding the affected employee with a damage of ?1000. Despite of an employee’s total unwanted demeanor, in Casey v Daughters of Charity29, the claimant was awarded with damages of ? 20,000. Despite of the fact of acknowledgement by the three employees who were dismissed by their employer that they indulged in defrauding the company by their continuous mistreatment of the clocking-in-system, in Patrick Hayes & others v Waterford Carpets Limited30, they were awarded with a compensation ranging from ? 13,500 to ? 24,500 for unfair dismissal31. A derogatory remark made by an employee about her manager in a social networking website and for this, the employee was dismissed after a disciplinary proceeding as happened in Kiernan v A Wear Limited 32 In this case, though EAT accepted that the employer had a fair disciplinary proceeding, but held that sanction of dismissal was not proportionate to the offence and awarded ? 4000 as damages to the claimant33. In this section , wrongful dismissal under Common Law will be discussed in detail.Under common law, an affected employee can claim damages for wrongful dismissal for fiscal losses suffered due to wrongful cessation of his employment contract by an employer. The quantum of compensation that may be awarded may be substantial, but it depends upon both the express or implicit terms of the contract. Under common law , the infringement of an employment contract may fall under any of the following ; serving no notice of cancellation of an employment contract by the employer to employee or service of inadequate notice assuming where a summary dismissal was not warranted; or where the dismissal of the employee is in violation of a contractual disciplinary procedure ; or where the dismissal is in violation of a contractual redundancy process ; and or the cancellation of a fixed-term employment contract before its expiry date34. However, in reality, the damages for wrongful termination of an employment contract may not be substantial and this is always due to the fact that an employer is empowered to cancel an employment contract by simply forwarding notice of termination of employment contract even without necessary to have a good reason for acting so.The quantum of damages will be restricted by the principle of mitigation as the victim can make a claim for compensation or damages for the losses he suffered due to infringement of contractual obligation in contrast to a vulnerable or bare expectation35. Thus, compensation for wrongful dismissal under common law is restricted to a sum symbolising the net salary for the notice period and will exclude any claim for damages for harm suffered or injury to one’s reputation or loss of earning of the victim. Thus, compensation will be considered for the period between the date of termination and the date of the court’s process commencing the hearing about the wrongful dismissal. Alternatively, the employee can seek for an injunction against dismissal. In the majority of the cases, damages have been awarded except in very few cases, injunction has been awarded36. Critics are of the view that majority of the victim is of the opinion that remedy available under common law for wrongful dismissal is not adequate and hence , it is necessary to introduce the norm of statutory unfair dismissal to wrongful dismissal also. However, in certain instances, the English courts have awarded higher quantum of damages where employers have not followed the required contractual disciplinary procedures. Although the injection was very rare to be granted, in Irani v Southampton and SW Hampshire Health Authority37, injection was granted to Irani who was a part-time employee employed in a clinic. In this case, as no proper procedure was followed, an injunction was granted38. In Lavarack v Woods of Colchester,39 the claimant was successful for claiming wrongful dismissal. At the juncture of the dismissal of Lavarack, there was a discretionary bonus scheme. Lavarack also claimed the bonus, but the Court of Appeal held that he was not eligible for the same as it was discretionary payment paid by the employer. In Gunton v London Borough of Richmond upon Thames40 , the appellant was dismissed and one-month notice was given and as no proper disciplinary procedure was followed, wrongful dismissal damage was claimed by the appellant41. Thus, in this case, the dismissal was held as a violation of natural justice or non-observance of proper disciplinary procedure42. In Powell v London Borough of Brent43, it was held that in case if there is no loss of confidence or trust, in the employee, then, dismissal will be regarded as wrongful dismissal. In the above case, it was held that an injection may be sought where it could be demonstrated that the award of damages could not be a proper relief. In R v BBC, ex p Lavelle44, it was held that a claimant praying for an injunction should have tried all remedies available and only, as a last resort, he should claim for an injunction. In some cases, an employee may seek for a declaration as to his contractual privileges. In Stevenson v United Road Transport Union45, without assigning any reason, the claimant was dismissed, which is in contravention of contractual procedure and hence, a declaration was issued as it relates to infringement of natural justice, which is regarded as void by the court46. In Dietman v Brent London Borough Council47, It was held by the court of appeal that the claimant was not given an opportunity of pre-disciplinary enquiry where she would have had the chance to demonstrate her demeanour or pleaded for any mitigating scenarios and hence, the dismissal was wrongful48. In wrongful dismissal, earlier, the English courts were reluctant to award any reparation for injury to one’s feelings as held in Addis v Gramophone Co Ltd49 . However, in Johnson v Unisys Ltd, the House of Lords awarded compensation for injury to one’s feelings due to unfair or wrongful dismissal50. In Gogay v Hertfordshire Country Council51, it was held that if a claimant suffered a psychiatric illness and then, a court can award general damages to the claimant instead of compensating just financial loss52. In 53Boyo v Lambeth LBC54 case, it was pointed out by the court of Appeal that dismissal which is in infringement of contract-footed procedures, put an end to contract of employment automatically. Conclusion An affected employee may approach the employment tribunal or courts in UK against his unfair or wrongful dismissal. This research essay has discussed about the legal remedies available to employees in UK against any unlawful or wrongful dismissal made by their employers. Direct discrimination includes unfair dismissal on the basis of the religion and dismissal of an employee due to his old age. If an employee is compelled to resign the job against his will due to the demeanour of his employer, then, it will be known as constructive dismissal. Further, he should have a minimum of one or two year experience to approach the employment tribunal if he has been unfairly or wrongfully dismissed. From the various case laws discussed above , we can conclude that though an employer has the full authority to dismiss an employee under the provisions of the employment contract , but he has to observe due care in observing legal formalities like conducting fair disciplinary proceedings before the dismissal , serving proper notice of dismissal , valid reasons for the dismissal else English courts and employment tribunal can be approached by an employee to redress his grievances against wrongful or unfair dismissal. Bibliography Books Barnett D& Scrope H, Employment Law Handbook (6th edn, Henry Scrope 2012) Benny R, Sargeant M & Jefferson M, Q & A Revision Guide: Employment Law 2012 and 2013 (5th edn ,Oxford University Press 2012) Brown A The Practice of Manager’s Law Handbook. 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(Oxford University Press 2012) The City Law School, Employment Law in Practice (6th edn, Oxford University Press 2007) Turner, C, Unlocking Employment Law (1st edition, Routledge 2013) Journal Articles Burrows, A, What is the Effect of a Repudiatory Breach of a Contract of Employment?’ [2013] Industrial Law Journal 42.3 281-288 Cabrelli, D and Rebecca Z , ‘The Elective and Automatic Theories of Termination at Common Law: Resolving the Conundrum?’ [2012] Industrial Law Journal 41.3 346-357 Collins H, ‘Compensation for Dismissal: In Search of Principle’ [2012] Industrial law journal 41.2 208-227. Riley, J. ‘Siblings but not Twins: Making Sense of ‘Mutual Trust’and ‘Good Faith’in Employment Contracts.’ [2012] Melbourne University Law Review, 36.1 Rodgers L, ‘The UK Employment Law Review and Changes to Unfair Dismissal.’ [2012] E-Journal of International and Comparative Labour Studies 1 (1-2) Web pages Gov.UK. ‘Unfair Dismissal and Constructive Dismissal’ accessed 22 December 2013 List of Statutes Common Law Employment Rights Act, 1996 Equalities Act 2010 The Industrial Relations Act 1971 The Employment Protection (consolidation) Act 1978 List of Case Laws A J Dunning & Sons (Shopfitters) Ltd v S Jacomb [1973] IRLR 206 Addis v Gramophone Co Ltd [1909] AC 488 Boyo v Lambeth LBC [1995] IRLR 50 British Home Stores v Burchell [1978] IRLR 379, EAT Casey v Daughters of Charity UD 62 /2007 Creed v KMP Co-Op Society Ltd [1991] ELR 140 Dietman v Brent London Borough Council [1988] ICR 176 (CA) Gogay v Hertfordshire Country Council [2000] IRLR 703 CA Gunton v London Borough of Richmond upon Thames [1980] lRLR 321 145 Irani v Southampton and SW Hampshire Health Authority [1984] IRLR 203 Kiernan v A Wear Limited [UD 647/2007] Lavarack v Woods of Colchester [1967] QB 278 McArdle v Superuinn [1991] ELR 171 McKenna v Butterfly UD 339/2006 Neary and Neary v Dean of Westminster [1999] IRLR 288 O’Keefe Weber v Terence Casey& Co [1997] ELR 71 Patrick Hayes & Others v Waterford Carpets Limited [UD 257, 258 & 259 /2007] Post Office v Foley HSBC Bank v Madden [2000] IRLR 827 Powell v London Borough of Brent [1987] IRLR 466 (CA) Qua v JohnFordMorrison Solicitors [2003] IRLR 184, EAT R v BBC, ex p Lavelle [1983] 1 All ER 241 R v Secretary of State for Employment, ex parte Seymour –Smith and Perez Court of Appeal, 31 July 1995 Shook v London Borough of Ealing [1986] IRLR 46,EAT Stevenson v United Road Transport Union [1977] 2 All ER 941 Western Excavating v Sharp [1977] QB 761 Read More