The ACAS Guidelines or the Liability: the Purpose of Improving the Employment Climate - Research Paper Example

 Introduction ACAS guidelines are issued in the interests of the employer as well as employees, for the purpose of improving the employment climate and promoting human relationship. Liability doesn’t arise simply on account of not following these guidelines. However, following these regulations would minimise the legal disputes. ACAS guidelines encourage both the employers and employees to resolve the problems informally through mediators or arbitrators in the conciliation process. Effective 6th April, 2009 the new code of practice should be adopted. We are considering the facts of the cases pertaining to the three employees of the Company, Dawsons as presented by David for analysis and advice, in the light of the ACAS Code of Practice on disciplinary and grievance procedures and relevant laws and case studies. Case 1: Dismissal of Joe Facts of the case Joe, an electrician, has been employed for many years, by Dawsons, a firm of electrical contractors, owned and run by David. Another employee informs David that Joe has been working for a relation, in the firm’s time, using their materials and not attempting to find customers for Dawsons. On checking with Joe’s relative, she confirmed that Joe had carried out the work, as a result of which, he was instantly dismissed. David also made further enquires of Dawsons clients and discovers that Joe had carried out work for them, without charging it to Dawsons, on a number of previous occasions. Analysis The facts of the case clearly states that ‘Joe was instantly dismissed’. In the first place if it is proved that the dismissal in this case is wrongful, then it amounts to breach of contract. ‘Wrongful dismissal is a breach of contract claim.  It may arise when an employer dismisses an employee without paying the correct period of notice.  It is not to be confused with Unfair Dismissal, which is a statutory claim.’ (Dale Langely & Co., 2008) Also, the pertinent point here is whether the dismissal is wrongful dismissal or unfair dismissal. Breach of Duty: The breach of duty as per 86(6) of the Employment Rights Act is serious and overrides the other provisions relating to issue of notice. The breach of duty has been corroborated by the fact that ‘Another employee informs David that Joe has been working for a relation, in the firm’s time, using their materials and not attempting to find customers for Dawsons. Code of Practice: It has been observed that Dawsons has not adopted the ACAS code of practice which outlines the grievance procedures to be followed in employment. In this case, it is also apparent that the employer has failed to ‘build up’ written evidence against the employee with reference to the reasonableness of the action taken, that is, dismissal. Since the breach of duty as per 86(6) of the Employment Rights Act is serious and overrides the other provisions relating to issue of notice, if the David’s post dismissal enquiries of Dawsons clients and discoveries could be substantiated with evidence, it could be safely concluded that the dismissal was not unfair, and it could also be argued that there is a reasonable ground for immediate dismissal, and the dismissal was not wrongful too. Joe by his misconduct has breached the fundamental terms of employment. It was held in British Labour Pump Ltd. V Byrne (1979) that a dismissal which was procedurally unfair will be a fair dismissal if going through a fair procedure would have made no difference to the decision to dismiss. What is reasonable depends upon the individual cases, and in this case, though he has conducted investigations to establish the facts of the case, confirmation of the fact by Joe’s relative should have been obtained in writing, because, reliability of the witness/evidence in the court of law is very important. The relative may not be willing to maintain the stand in the court of law. Tether, M. stated, ‘In the context of section 98(4) of the Employment Rights Act 1996 (“ERA”), the Court of Appeal has held that the range of reasonable responses test applies as much to the procedural steps taken by the employer as it does to the substantive elements of the decision to dismiss - see Sainsbury’s Supermarkets Ltd v Hitt [2003] IRLR 23 and Whitbread plc v Hall [2001] ICR 699.’ (2004) The decisions or actions not supported by legal procedures in the case of employment acts, irrespective of its need for such actions at a particular situation, viewed differently by the courts, keeping in view the larger interests of the society. Establishment of facts: The weakness to the case springs up from the handling of the issue by the employer, as the facts of the case suggest David has not given any opportunity to Joe to explain his views or organised a ‘grievance meeting’ or ‘investigatory meeting’ on the matter to discuss about the issues with the employee before taking action or provide him an opportunity to appeal and convince the employer about his position in the issue. Joe has been employed for many years in the company. In this case there was a chance for Joe to claim that his relative’s confirmation is motivated or accept the facts which could justify the action. This opportunity was missed by the employer also. In the case of the investigations conducted after dismissal also, the investigations have not been substantiated by any written evidence, or it is difficult to substantiate in the court of law. Breach of contract means failure to do something that is required in a contract. As long as the alleged ‘misconduct ‘is not proved, there is lack of legal excuse for the dismissal, and such action could be construed as ‘breach of contract’. Wrongful dismissal and Unfair Dismissal: The important point to remember here is whether the dismissal is wrongful dismissal or unfair dismissal or both. The fact ‘failure to follow the procedure’ naturally casts a shadow on the actions of the employer, and imports or implies extraneous concerns on the part of the employer in taking action, and the angle of the defendant or his defences to the allegations could not be taken into account at this stage in the absence of the details. Frequently "unfair dismissal" will also be "wrongful dismissal" (and vice versa) but not always - for an example of a dismissal which was "wrongful" but not "unfair dismissal" see Samuel v London Borough of Lewisham 2001 EAT on 29th November 2001. The only remedy for unfair dismissal is to present a complaint to an Employment Tribunal (ERA 1996 s.205) (Emplaw.co.uk, Dec. 2009). The tribunal can award higher amounts in the case of unfair dismissals without any breach of contract involved. . But, in the case of wrongful dismissals, it is restricted to £25,000. It is stated that “If the tribunal considers that an employee has a well-founded complaint and the tribunal is unable to make an order for reinstatement or re-engagement, it must make an award of compensation that has two elements: the basic award and the compensatory award.” (My Lawer). It should also be noted that, if the employer does not follow the guidelines, he may be liable for additional 25% in award. (It could be reduced by 25% on employee’s failure to follow the guidelines, which is obviously ruled out here.). An employee can bring a claim for both Unfair and Wrongful dismissal, but, amount received under one would get cancelled to that extent under the other claim. This is to avoid double compensation. Punitive Damages/Bad Faith Damages: ‘Punitive damages can be awarded where the employer's conduct is shocking and outrageous… bad faith conduct at the time of dismissal… making false allegations of cause at the time of dismissal…’ (Krupat, K.A., 2010). Looking from a different angle, Joe may also bring up new facts which are detrimental to the employer, and make the employer’s position difficult to contest with. These damages and the financial implications thereof involved are depending upon the circumstances of the cases and the discretion of the court. The jurisdiction frequently may overlap Common Law as well. Advice It should be kept in mind that these types of claims involve huge legal expenses and time consuming. Generally, employers do prefer out of court settlement to avoid prolonged litigations. Resolution of disputes through reconciliation process is always advisable, since the law would like to give the benefit of doubt usually to the employees, since the spirit of the law is to protect their rights basically, and to encourage them to seek legal remedy in the event of injustice, and aims at fairness in dealing with the grievances of the employees. Considering the length of the service of the employee, which may work against the Company in legal proceedings, David may try to resolve the issue through mediators. Though there is breach of duty on the part of the employee the dismissal process was not handled by adopting standard procedures, and was done in haste. Case 2: Renewal of the Contract with Georgia Facts of the case Dawsons employed Georgia some months ago on a twelve months contract, as an electrician. However, David has discovered that much of her work has been unsatisfactory and that the cost of rectifying it has been expensive. David accordingly informs Georgia that her contact will not be renewed on its expiry. Analysis Expiry of the Contract: There is no question of dismissal here. Expiry of the contract can’t be construed as removal. When it is reasonable on the part of the employer not to renew the contract, the statute can’t keep two parties wedded to each other on any legal grounds beyond the contract period unless it is renewed. The facts of the case are clear beyond any doubt, and the performance or work on the part of the employee ‘has been unsatisfactory and that the cost of rectifying it has been expensive. David accordingly informs Georgia that her contact will not be renewed on its expiry.’ Salient Points: The important points to be taken into account are: Georgia is not a permanent employee of the company There is no statutory obligation on the part of the company to compulsorily renew the contract. The work is unsatisfactory. The cost of rectification of the work done is expensive. Proper information to this effect has been provided to the employee. However, there are legal obligations attached to the contract employment, and the employer is bound to honour such regulations. Mainly, it relates to notice period. The employer’s obligation in respect of notice as per ACAS, in respect of Employment contracts states: ‘at least one week's notice after one month's employment two weeks after two years Further according to ACAS guidelines, ‘If you suffer a measurable financial loss because your employer has not followed the agreed terms of your contract you can seek damages by making a breach of contract claim.’ The employee has no grounds to have any grievance on this count. Legal compliance: Obviously, the employer has given sufficient notice about his intention of not going to renew the contract, and the employer has followed the agreed terms of the contract, and has intention to do so during the remaining period of contract. Also, it could be inferred from the facts of the case that the employer David has discovered that much of her work has been unsatisfactory and that the cost of rectifying it has been expensive, and informed and warned about these drawbacks to Georgia. The employer has a reasonable and valid excuse for not renewing the contract after expiry. Advice In the first instance, it should be understood that this is not a permanent employment with the benefits attached to it, and the performance was not satisfactory to warrant any renewal. The employer is reasonable in following the terms of agreement during the period of contract. In view of the above realities, Georgia has no case for claiming unfair dismissal. Case 3: Dismissal of Kevin Facts of the case Prima facie, the case is wrongful as well as unfair dismissal and the following points emerge on careful study of the facts of the case. Kevin is a senior administrator with some years of experience in the company. The injuries are not serious, and he is expected to fully recover shortly. The proper notice has been served by the company prior to dismissal. Kevin was not allowed to have a friend plead his case. The company has not acted on medical reports. The decision was already taken to appoint Ian in the place of Kevin. Analysis The analysis of the facts of the case with reference to the procedural and legal requirements is necessary to arrive at a conclusion. Disability: The Disability Discrimination Act 1995 seeks to provide protection to employees in respect of the less favorable treatment for a reason related to a disabled person's disability; and requires the employers to make a “reasonable adjustment”. Here the employee is expected to fully recover shortly. Here the point is whether the adjustment is affordable, considering the nature of the job. In the absence of details with regard to the duration, if can be implied from the facts of the case that ‘shortly’ means the adjustment would have been possible. However, the critical issue is that the employer has not taken any reasonable efforts to investigate into the matter thoroughly to ascertain whether the adjustment is possible, and such action on the part of the employer would have avoided the dismissal. The company has not called for medical reports or medical certificate from the employee before taking the decision, though the employee has kept the company informed about the domestic accident. Grievance procedures: According to the ACAS guidance procedure, the employer should have investigated into the matter for establishment of the facts before taking action, which he failed to do so. The employer failed to inform Kevin about the problem and give opportunity to explain his case. Dawsons has not allowed him to have a friend to plead his case. It should be noted that Kevin should have been allowed to be accompanied not by a friend but, by a colleague or a trade union official in accordance with the procedure. The only mitigating point is with regard to the notice, which according to the facts of the case has been issued properly with reference to length of notice as per law or as per contract whichever is giving more time. Written statement of the reason for dismissal is admissible in evidence in any proceeding u/s 29(5) of ERA The employer should have allowed Kevin to appeal against the decision made. The appeal should be dealt with impartially, if possible by a manager not involved in the case. The words ‘Kevin bitterly complained in the meeting’ indicates there was a meeting held prior to the dismissal. But, it was not clearly stated whether the meeting was arranged to follow the procedural guidelines or not. However, the outcome of the meeting suggests that the meeting was accidental or at the instance of the employee to vent his feelings with no procedural values. He was also denied the right to be accompanied by a colleague or trade union official. Wrongful and unfair dismissal: The above analysis clearly shows that the dismissal is not only a wrongful dismissal but also unfair dismissal. If the employer does not follow the guidelines, he may be liable for additional 25% in award in addition to the basic award and compensatory award. “‘The compensatory award is calculated according to the headings laid down by Sir John Donaldson in Norton tool Co. Ltd. V Tewson [1973]. It includes loss to the date of the hearing (including perks and expenses), future loss, loss of employability, (see Vaughan v Weighpack Ltd. [1974] loss of pension rights, and loss of accrued rights” Remedies available could include reinstatement or reengagement, provided the respective parties are satisfied with the resolution of the issue. After all, the aim of the statutes is to promote employment relations, and it is in this background the reinstatement should be viewed. “An Employment Tribunal can recommend reinstatement of an employee who has been unfairly dismissed; that is, the employee will return to the job that she or he held prior to the dismissal. If an employer refuses to accept reinstatement, the tribunal can award additional financial compensation to the employee.’ (Jrank, 2010) Advice Of all the three cases, Kevin’s case is the most unfavourable one from the employer’s point of view. He is liable on many counts with reference to the employment and common law, unlike in the case of Joe, where some the basic factors are favourable to the employer, and there is some scope for the employer’s position to be strengthened. Therefore, under the available circumstances, we advise Dawsons to strike a conciliatory note to the employee, as a primary solution to the issue. Whatever justification in dismissal, considering the importance of his position in the company, has been clearly negated by the procedure adopted, in view of the treatment Kevin deserves relative to his position held in the company. It should be remembered that in such cases, the interpretations of the facts of the case, and consequently the factor of ‘discretion’ in the court of law plays an important role in any verdict. For example, reinstatement could also be considered by the court of law and enforced on the company. Conclusion It should be understood that liability doesn’t arise simply on account of not following the ACAS guidelines or the liability could be avoided by scrupulously following the procedures. One should go by the merits of the case to decide whether the dismissal is wrongful dismissal or unfair dismissal or both. ACAS observes “Employers and employees should always seek to resolve disciplinary and grievance issues in the workplace. Where this is not possible employers and employees should consider using an independent third party to help resolve the problem.”  Finally, it is very important to collect evidences in writing, follow all the procedural requirements in writing and to keep written records of the cases related to employee grievances such as minutes of the meetings, conciliation proceedings, etc. References ACAS, Code of Practice 1 - Disciplinary and Grievance Procedures, 20 May 2010 ACAS, Employment contracts, 20 May 2010 Benny, R., Sargeant, M. and Jefferson, M. (2008) Q & A Employment Law 2008 and 2009, Oxford University Press, 21 May 2010 British Labour Pump Ltd. V Byrne (1979), ICR347, Q & A Employment Law 2008 and 2009, p.66 Unfair dismissal, Oxford University Press. Dale Langely & Co., (2008), Wrongful Dismissal / Breach of Contract, 21 May 2010 Directgove (2010), Unfair dismissal, 21 May 2010 Emplaw.co.uk, (Dec. 2009), Wrongful dismissal /unfair dismissal and wrongful dismissal compared, 21 May 210 Jrank, (2010), Reinstatement - Employment Tribunal, dismissal, unfair dismissal, 21 May 2010 Krupat, K.A., (2010), Wrongful Dismissal – Employment Law, JOBLAW.CA, 21 May 2010 My Lawer, Awards for unfair dismissal, 21 May 2010 Norton Tool Co. Ltd. v Towson (1973), 1 WLR 45, NIRC, Q & A Employment Law 2008 and 2009, p.80 Unfair dismissal, Oxford University Press. Steptoe & Johnson (2010), Unfair dismissal compensation, Lexology 21 May 2010 Tether, M. (2004), Reasonableness Issues in the New Era, Old Square Chambers, 21 May 2010 Vaughan v Weighpack Ltd. (1974), ICR261, Q & A Employment Law 2008 and 2009, p.80 Unfair dismissal, Oxford University Press.. Your Rights (2008), Wrongful Dismissal, 21 May 2010 Read More