'It'll leave you g[R]aspin at straws'
In this month's bulletin we highlight the case of Raspin v United News Shops Ltd. This case establishes an employee's right to claim damages for loss of the opportunity to bring an unfair dismissal claim where an employer breaches the contract of employment and as a result, the employee falls short of the necessary two year qualifying period.
Mrs. Raspin began working from May 1994 for United News Shops Ltd at the post office counter in one of their chain of shops. Concerned that money was going missing the employer installed close circuit television. The security manager of the store became suspicious of Mrs. Raspin and as a result she was asked to attend a disciplinary hearing. Mrs. Raspin was given no details of the allegations against her and she had no opportunity of offering an explanation.
Mrs. Raspin was subsequently suspended and then dismissed summarily. Although she appealed against her dismissal she was still given no details of the allegations against her and her appeal was dismissed. Mrs. Raspin then brought a claim at the Employment Tribunal (ET) that her dismissal was in breach of contract as her employer had failed to follow the contractual disciplinary procedure.
The ET held that Mrs. Raspin's dismissal was in breach of the contractual disciplinary procedure and that had the proper procedure been followed, it would have extended her employment by an additional three weeks until 16 May 1996. On this basis the ET awarded three week's pay. Mrs. Raspin also argued that had the disciplinary procedure been followed and her employment had continued for a further three weeks she would have achieved the two years service needed to complain of unfair dismissal and should therefore be awarded further damages to reflect her loss of opportunity to bring a claim. The ET rejected her argument and she appealed to the Employment Appeal Tribunal (EAT).
In a clear judgement the EAT held that where the employer is in breach of contract by failing to follow the contractual disciplinary procedure, damages for loss of the opportunity to bring an unfair dismissal claim can be awarded. An employee who suffers loss as a result of the employer's breach can be placed financially in the same position as if the contract had been performed. In other words had the company followed the disciplinary procedure in this case, which would have taken three weeks, Mrs. Raspin would have had the two years service needed to bring a claim of unfair dismissal and she is therefore entitled to financial compensation for that loss of opportunity wholly as a result of the employer's breach. Mrs. Raspin's case was remitted back to the ET for an assessment of damages.
This case is a timely reminder to employers to ensure that if they don't wish the disciplinary procedure to be contractually binding that they make specific provision for it to be excluded from the operation of the contract. Certainly with employees who are approaching the current two year period of qualification, employers should ensure that any disciplinary issues are addressed expediently and in accordance with any contractual procedure to avoid falling into the same trap as United News Shops.
The decision in this case could also have a substantial impact in relation to pay in lieu of notice clauses in that if an employee is dismissed without notice in circumstances where his contract does not contain such a clause (i.e.he is dismissed in breach of contract) the employee may well be able to claim, as part of his breach of contract action, damages for loss of the right to claim unfair dismissal on the basis that had the employer not breached the contract and had the employee been given the required period of notice, it would have given the employee the requisite period of service to make a claim of unfair dismissal. Certainly employers would be well advised to revisit the question of whether it is appropriate to include a pay in lieu of notice clause in the contract to avoid such a potential claim arising.
STOP PRESS
The Government has published the draft Employment Relations Bill which seeks to implement the proposals put forward last May in the Fairness at Work White Paper. Amongst other measures the Bill pledges to implement the terms of the Parental Leave Directive which gives up to three months unpaid leave and raises the current unfair dismissal compensation limit to £50,000. The Bill also contains controversial measures in relation to union recognition and extends the entitlement to extended maternity leave to all women who have one years service.
There has been disappointment in the European Court of Justices' decision to refer the long running challenge by Nicole Seymour-Smith and Laura Perez against the two year rule for complaining of unfair dismissal, back to the House of Lords. John Monks the TUC general secretary has said that there are 5,000 union members who have backdated claims for compensation which will continue to be in limbo for the months to come until the House of Lords consider the case again.
For further information please contact Susan Nickson, e-mail: Click Contact Link , Trinity Court, 16 John Dalton Street, Manchester M60 8HS, UK, Tel: +44 161 830 5000
This article was first published as the February 1999 Hammond Suddards Employment Bulletin
The information and opinions contained in this article are provided by Hammond Suddards. They should not be applied to any particular set of facts without appropriate legal or other professional advice.
UK: Employment Bulletin - February 1999
Last Updated: 1 February 1999
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