A Claim of Unfair Dismissal - Case Study Example

 Unfair dismissal The case of Sarah: Employees have been provided enhanced rights – especially to contest information about them which may affect them adversely1 and the right not to be dismissed unfairly1a. If a claim of unfair dismissal is brought by Sarah, it will be regulated by Section 98 of the Employment Rights Act of 1996. In assessing whether there is potential for filing a claim, the Courts will determine the substantive and procedural fairness of the decision taken by the school. Procedurally, it may be noted that the school has adhered to the three step dispute resolution procedure, which employers are obliged to follow.1b Sarah has been allowed an initial hearing and an appeal, therefore there are no grounds for procedural violations and her claim must be assessed on the basis of whether it is objectively a fair decision. Sarah has been accused of theft, therefore grounds of dismissal would be dishonesty in conduct, which is one of the fair reasons for a dismissal2. In the case of British Home Stores v Burchell3 Arnold J clarified that the belief an employer has about the guilt of an employee must be based upon reasonable grounds with the matter being investigated as far as possible. Viscount Dilhorne in Devis & Sons Ltd v Atkins4 had stated that an assessment of the reasonableness of an employer’s actions must be considered “in accordance with equity and the substantial merits of the case.”5 The band of reasonableness test of an employer’s actions in dismissal of an employee as established in Iceland Frozen Foods v Jones6 is in accordance with the law,7 which states that the evaluation of whether or not a dismissal was unfair will depend upon whether, under the circumstances, the employer acted reasonably in dismissing the employee. Although this test was challenged in the case of Haddon v Van den Bergh Foods8 as a prejudicial assessment that tilts the balance in favor of employers, it has been upheld by the Court of Appeal in HSBC v Madden.9 Therefore, the question that must be considered in Sarah’s case is whether or not the school’s decision to dismiss her was a reasonable one which other employers would have made? In the case of West Midlands Co Op Society v Tipton10 Lord Bridge held that the appeals procedure played an important role in determining the fairness of the dismissal. Unless it is an instance of gross misconduct, in the event that guilt is discovered during an appeal hearing, oral and written warnings should be administered and alternatives to dismissal must be considered, such as demotion. In the case of Sarah, a less stringent sentence than dismissal could have been used. She has been employed with the School for three years, whereas the qualification threshold providing grounds for an unfair dismissal suit is only one year11. Secondly, was a proper investigation carried and Sarah’s culpability proved beyond a reasonable doubt? Was she allowed to speak up and offer explanations in her defence, using witnesses for support if necessary? There are no earlier instances of misconduct where due warning had been issued to her. The question of whether the manner of dismissal was fair in view of her long tenure with the school is a valid one that will arise in this case. In view of Sarah’s prior clean record, the nature and scope of the investigation that has been carried out by the school will be a relevant factor in determining whether and to what extent, she can seek compensation. Thirdly, there is also the issue of hurt feelings and potentially negative consequences that could arise out of this manner of dismissal of a long term employee, such as the psychiatric illness in the case of Johnson v Unisys.12 Barmes has argued that the decision in Johnson which went against the employee, has created a conceptual instability in common law in reference to a breach in a contract for employment and the existence of the breach has been made contingent on the employee reaction12a. However, Lord Hoffman’s observations in Johnson on non economic losses in unfair dismissal claims being non recoverable by law13 were held to be incorrect in the recent case of Dunnachie v Kingston upon Hull City Council14. In this case, recoveries by way of damages were allowed to an employee for injury of feelings, since the meaning of the word “loss” under Section 123(1) of the ERA did not necessarily exclude non economic losses caused as a result of the manner of unfair dismissal. The valid issue of non-economic losses caused to Sarah through injury of her feelings highlights the need for some kind of disciplinary procedure rather than outright dismissal. There are sufficient grounds to question whether the decision of the school to dismiss her would pass the rest of reasonableness that has been laid out in the case of Iceland Frozen Foods.15 This will affect the determination about whether or not the decision to dismiss Sarah was one that was objectively fair or whether other alternatives should have been considered and fully exhausted, in view of her long tenure as an employee of the school. The case of Mike and Vera: The case of Mike and Vera appears to offer scope for the filing of a wrongful dismissal suit, which would arise when the employee is dismissed without notice or at short notice; this will involve a breach of contract. Applying the same standards of objective and procedural fairness discussed above to the question of the manner in which these two employees have been dismissed, there are issues that rise in violation by the employer on both counts. As of October 1, 2004, a new three step dispute resolution procedure has been introduced for employers, which they are obliged to follow16. In the event an employer fails to follow this three step procedure, the employee’s claim of unfair or wrongful dismissal may automatically be admitted by the Employment Tribunal and penalties may accrue to the employer on grounds of unfairness in procedure. The three steps are (a) the reason for the dismissal must be out into writing (b) a face to face meeting with the employee must be arranged to discuss the dismissal (c ) the employee must be provided the opportunity to appeal the decision. Moreover, instant dismissal of an employee, even in cases of gross misconduct, is automatically unfair unless at the very least, a two stage procedure is followed, wherein the employee is provided written notice of dismissal and provided the right to appeal. From the stated facts, it appears that neither Mike nor Vera have been instantly dismissed, which could make the school liable for violation of the provisions of the new Dispute Regulations. The issue of procedural fairness was also established in the test of reasonableness that was laid out in the case of Iceland Frozen Foods17, confirmed and supported in Haddon18 and Madden19. A second test that the judiciary has adopted in and as a result of these cases is whether there is a mandatory requirement that the procedural steps should be strictly adhered to in each case. The three step procedure for dismissal outlined above is also a part of the ACAS Code, which may not be binding, but failure to follow procedural requirements can be admitted into evidence in an unfair dismissal suit.20 The case of Lock v Cardiff Railway Station21 also held that a failure to regard the Code could be construed as an error of law and liable for action. But in the case of British Labour Pump Co v Byrne22 the “no difference rule” was applied, whereby a dismissal was deemed to be justified even without proper procedure if the employer could prove that the final outcome would have been the same. Moreover, Section 98(4)23 also specifies that in determining whether the dismissal was fair or not, a test of reasonableness would be applied, taking into account the circumstances of the case and in accordance with equity. In making a determination about the test of reasonableness, Sainsbury’s v Hitt24 stated that this would involve an assessment of the procedures that the employer had followed before carrying out the dismissal of the employee. In Mike and Vera’s case, the procedures could be deemed irregular and unfair to the two teachers, and they could also be deemed inequitable in the interests of objective fairness. While the question of procedural fairness has generally tended to favor the employer as per the cases above, the new dispute regulation provisions23 have placed a greater onus on employers to prove the fairness of their decisions and the failure to allow Vera and Mike to go through the three step process could make the school liable on the grounds of failure in procedural fairness in the dismissal process. From the issue of substantive fairness, the decision of the head teacher appears to be harsh. In the case of Mike and Vera, two aspects may be noted. Their sexual conduct strictly classifies as their private affair, although from an ethical perspective it may be improper to maintain such relationships in the workplace. Mike and Vera’s affair does not necessarily constitute a flagrant. public violation which would fall outside the scope of the European Convention of Human Rights. Therefore, since their dismissal involves the issue of interference with their rights to privacy, the Employment Tribunal will be required to show a respect for human rights and incorporate the provisions of the European Convention of Human rights24 and the Human Rights Act of 199825 through its “interpretative obligation” – spelt out as follows by Lord Woolf : “the interpretative obligation decreed by Section 3….involves seeking the intention reasonably to be attributed to parliament in using the language in question….”26 Article 8 of the European Convention states that everyone has the right to “respect for his private and family life, his home and his correspondence.”27 In this connection the case of X v Y28 raised the issue of the extent to which unfair dismissal legislation was subject to the interpretative obligation under Section 3(1) of the HRA in order to allow for the provisions of Article 8 of the Convention to be incorporated. In this case, the summary dismissal of an employee for sexual misconduct was held to be justified, since it fell within the range of reasonable responses open to the employer. However, guidance was also provided in this case on how tribunals should consider the provisions of the HRA in respect of private employees.29 It may be noted that in the case of Mike and Vera, the offense of the employees was not a flagrant public offense and there is reasonable ground to support the argument that their Convention rights have been infringed. It may also be noted that in this case, Vera and Mike are being dismissed without following any of the disciplinary procedures that may be outlined in the contracts the teachers have with the school. Under such a contract, employees have the right to receive notice before they are dismissed and may receive all contract entitlements. A summary dismissal would be justified only if the employees have committed a serious breach of contract, which is debatable in this case – rather the employer has breached the contract with them by not following normal dismissal procedures outlined in the contract and may therefore be liable for wrongful dismissal. Brodie has discussed damages for wrongful dismissal and concludes that the common law must be further improved to allow an employee full compensation for all losses arising out of a wrongful dismissal, including recoveries for injuries to feelings30. He has pointed out that in the case of Wallace v United Grain growers31 McLachin J had emphasized the long term, personal nature of an employment contract, where a greater degree of confidence and trust is at stake. Therefore, the good faith that underpins the employment contract must be upheld. Since this dismissal may also affect Mike and Vera’s future employment prospects it is likely that their case would also qualify for recovery of damages caused to their future employment prospects as Brodie has explained in his discussion of the case of Malik32. There has been damage done to Mike and Vera’s reputation through the breach of the good faith inherent in the employment contract and therefore, they have a strong case in their favor for filing a suit for wrongful dismissal. In conclusion, it may be stated that Sarah, Mike and Vera all appear to have strong grounds to uphold action with the Employment Tribunal. For Sarah, the issue is unfair dismissal. Mike and Vera have a stronger case favoring wrongful dismissal which is an action for a contractual breach. All employees are likely to receive damages for injury to feelings caused by the decision to dismiss. (2118 words) Bibliography Books and Articles: * Barmes, Lizzie, 2004. The continuing conceptual crisis in the common law of the contract of employment. The Modern Law review, 67 (3) pp 435 * Brodie, Douglas, 1999. A fair deal at work . Oxford Journal of Legal Studies, 19(1), p 83 * Collins, Ewing and McColgan, 2001. Labor law: text and materials Hart Publishing, at p 683 * Stone, Judy, No date. Human rights and employment law [online] available at: www.11kbw.com/index.php?category_id=6&art_id=422 Legislation: * European Convention of Human Rights and Fundamental Freedoms. [Online] Available at: http://www.pfc.org.uk/legal/echrtext.htm * Human Rights Act of 1998 [Online] Available at: http://www.opsi.gov.uk/acts/acts1998/80042--a.htm * Employment Relations Act of 1996 * The Employment Act 2002 (Dispute Resolution) Regulations 2004, S.I. No. 752. Available online at: http://www.legislation.hmso.gov.uk/si/si2004/20040752.htm * ACAS Code of Practice on Disciplinary and Grievance Procedures in Employment (2004) Cases: * British labour Pump Co v Byrne (1979) ICR 347. EAT * British Home Stores v Burchell [1978] IRLR 379 * Devis & Sons Ltd v Atkins (1976) AC 931 * Dunnachie v Kingston upon Hull City Council (no: 2) (2004) UKHL 36 (2004) 3 WLR 310 (2004) IRLR 727 (HL) * Haddon v Van den Bergh Foods [1999] IRLR 672 * HSBC v Madden [2000] ICR 1283 * Iceland Frozen Foods v Jones [1982] IRLR 439 * Johnson v Unisys [2001] 2 All ER 801 HL * Lock v Cardiff Railway Co Ltd (1998) IRLR 358 * Malik v BCCI (1998) AC 20 * Poplar Housing and Regeneration Community Association Ltd v Donoghue [2002] QB 48   * Sainsbury’s v Hitt (2003) IRLR 23 * X v Y (2004) IRLR 625 * West Midlands Co Op Society v Tipton (1986) 1 AC 536; (1986) 2 WLR 306 * Wallace v United Grain growers 152 DLR (4th edn) 1,at 46 Read More