Jersey: The Royal Court Says No To A 100% Reduction In Compensation For Unfair Dismissal

Last Updated: 30 December 2014
Article by Simon A. Hurry

The Jersey Employment and Discrimination Tribunal's jurisdiction to reduce a compensation award for unfair dismissal is now well established. Collas Crill acted for the successful party in one of the first applications for a reduction in 2011, where a discount of 65% was ordered, amounting to approximately £18,500.

The Tribunal's power to find that an employee has been unfairly dismissed, but then reduce the award the employee receives, is designed to ensure that justice is properly served. There are a number of specific circumstances where the Tribunal may reduce an award under the Employment (Jersey) Law 2003, but there is a deliberate 'sweep up' provision, which enables it to take into account any other circumstances which render it just an equitable to reduce the award. It is impossible to account for every eventuality in the Law, so the 'sweep up' provision is necessary.

When terminating an employee's employment, an employer must be wary of (1) following a fair and reasonable procedure and (2) reaching a fair and reasonable decision. If the employer does not satisfy both of these requirements, the termination will be unfair and the employer is liable to pay compensation in addition to any other amounts owed on a contractual and/or statutory basis.

A simple example of where the Tribunal may discount a compensation award for unfair dismissal is where a fair and reasonable decision has been reached by the employer to terminate the employee's employment, but the employer has slipped up with its procedure in arriving at that decision. Another example is where an ex gratia payment has been made to an individual on termination of his or her employment as a gesture of good will. As the employer has made the payment without being legally obliged to, this can be set off against any compensation the employee might be entitled to.

Last month the Royal Court, acting as the Employment and Discrimination Appeal Tribunal, overturned the Tribunal's decision to discount a compensation award by 100%. The Tribunal had decided that the employer had not followed a fair and reasonable process in making the employee redundant, but felt able to discount the compensation award by the maximum amount due to:

  1. the employee contributing to his dismissal; and
  2. on just and equitable grounds (the 'sweep up' provision).

In respect of (i), the Tribunal held that because the employee did not participate in the consultation process by coming up with any viable alternatives to his redundancy. However, the Royal Court held that there was no evidence that there was any such viable alternative and the employee couldn't have made something up.

In respect of (ii), the employer agreed to defer the termination of the employee's employment because of the difficulty he was having in finding alternative employment. As the employee was deemed to be redundant, the Royal Court noted that keeping him on for a further period would have cost the employer (as it was losing money on his position). However, the mere fact that an employer acts in a kind and considerate way does not necessarily justify a discounted compensation award.

In this case the Royal Court felt it would have been open to the Tribunal to make some reduction, arising from the cost of extending the employee's employment, but this was likely to be modest.

Ultimately, the Royal Court allowed the appeal and has remitted the matter back to the Tribunal to decide upon the award of compensation in light of its findings.

This case is another example of the judgement call the Tribunal has to make when deciding whether to reduce a compensation award and if so, by how much. In particular, making reductions under the 'sweep up' provision will always be accompanied by a degree of uncertainty given its wide ranging application.

The advice to employers is, of course, to avoid any debate over a reduction by not unfairly dismissing individuals in the first place. However, the Tribunal is clearly willing to assist employers where appropriate and the possibility of a reduction, potentially up to 100%, is a material consideration for individuals considering bringing an employment claim.

QUALIFYING PERIOD TO CLAIM UNFAIR DISMISSAL EXTENDED TO 52 WEEKS' CONTINUOUS SERVICE

From 1 January 2015 any employee starting work with an employer will have to accrue 52 weeks' continuous service in order to qualify for the right not to be unfairly dismissed instead of 26 weeks'. Any employee who started with their employer before 1 January 2015 will retain the right not to be unfairly dismissed after 26 weeks' continuous service.

For the avoidance of doubt, the new qualifying period does not affect an Employee's right to claim for any of the 'automatic unfair dismissals' under the Law which require no specific length of service.

Social Security Minister, Deputy Pinel, who made the decision, has come under significant pressure from political groups to reverse the amendment to the qualification period but, at the time of writing, appears to be standing firm.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions