Here is a brief summary of recent cases we think are of particular interest. If you would like advice on any particular area, please contact your usual Speechlys' contact or one of the employment partners.
Sarkar v West London Mental Health NHS Trust
The Court of Appeal has held that an employee's dismissal
for gross misconduct was unfair in circumstances where the employer
had initially been prepared to deal with the conduct through an
informal process. The Trust had received complaints from Dr
Sarkar's colleagues about allegations of bullying and
harassment. Following investigation into the alleged misconduct,
the Trust and Dr Sarkar agreed that the matter would be dealt with
under the Trust's "Fair Blame Policy"
("FBP"). The FBP was in place as an alternative to the
Trust's formal disciplinary policy and aimed to resolve less
serious misconduct or capability issues, with the most severe
sanction available under it being a first written warning.
Whilst the investigation was ongoing Dr Sarkar was involved in two
further instances of misconduct. The Trust then sought to commence
disciplinary proceedings against Dr Sarkar which included these
additional allegations that had not formed part of the original
investigation or the FBP procedure. Dr Sarkar was summarily
dismissed for gross misconduct and brought a claim for unfair
dismissal in the tribunal. The tribunal found that the dismissal
was not within the range of reasonable responses. The Trust
appealed to the Employment Appeal Tribunal ("EAT"), which
reversed the tribunal decision. Dr Sarkar appealed to the Court of
Appeal.
The Court of Appeal held that the employment tribunal had been correct to find in Dr Sarkar's favour and was entitled to conclude that the Trust's initial use of the FBP procedure indicated that the Trust considered the misconduct allegations to be relatively minor. As such, it was therefore inconsistent to base a finding of gross misconduct on the first set of allegations. In addition, it was held that the tribunal had been entitled to conclude that the second set of allegations against Dr Sarkar was not sufficiently serious to justify gross misconduct, either alone or in addition to the original allegations.
Key points for employers
Employers who do have the option of using different procedures for minor and more serious matters should be aware that their decision may be irreversible, unless they specifically reserve the right to impose higher sanctions within any policy for dealing with disciplinary matters in an informal manner. To avoid problems, employers should ensure that they have a proper basis for choosing to switch to a more serious formal procedure during a disciplinary process.
City of Edinburgh Council v Dickson
Alistair Dickson, was employed by Edinburgh Council as a community learning and development worker. Dickson had suffered from type 1 diabetes for more than 30 years, and was disabled within the meaning of the Disability Discrimination Act 1995. In June 2007, the council received a complaint that Dickson had been viewing pornographic material on the school's computer. He was suspended and asked him to attend a disciplinary hearing. At the hearing, Dickson alleged that he had no recollection of viewing the indecent images and that his conduct and lack of memory were caused by a hypoglycaemic episode relating to his type-1 diabetes. Dickson said his condition had not been properly controlled in recent years and that it had been exacerbated at the time of the incident by a mis-prescription of insulin.
The council did not accept Dickson's explanation and dismissed him for gross misconduct. Dickson issued claims for unfair dismissal and disability discrimination. The tribunal found in Dickson's favour on both unfair dismissal and disability discrimination. The employment tribunal was satisfied that the council had failed properly to investigate Dickson's defence of hypoglycaemia and that this defence would have been accepted if it had been properly considered. The tribunal found that his dismissal amounted to disability discrimination and ordered that Dickson should be reinstated and paid £25,000 compensation. The council appealed to the EAT.
EAT decision
The EAT upheld the Tribunal's decision, agreeing that Dickson's dismissal had been unfair and that reinstatement was appropriate. The EAT found that the council had failed to take proper steps to understand Dickson's explanation or the medical evidence that was available. The EAT said that if the council had undertaken a proper investigation, it probably would not have made the decision to dismiss Dickson and, as such, reinstatement was fair. Applying the House of Lord's decision in Lewisham v Malcolm, the EAT overturned the tribunal's decision that Dickson's dismissal amounted to disability discrimination. The EAT found that the council's rejection of Dickson's explanation was because they did not believe him, not because he was disabled.
Key points for employers
The decision is a useful reminder for employers that a full and thorough investigation should precede any decision to dismiss. The EAT was particularly critical of the council's reliance on the HR adviser's opinion (itself based on a conversation with his wife who was a pharmacist) that a hypoglycaemic episode was unlikely to be the cause of Dickson's behaviour. The case demonstrates that while ignoring a disability-related explanation may not necessarily mean that the dismissal itself is discriminatory, it is likely to make the dismissal unfair.
A v B
"A" was a senior civil servant, working for "B", a high profile public authority with responsibility for child protection, although A did not have contact with children himself. B knew that prior to A joining the authority, he had been arrested on suspicion of having sexually abused one or more children in an orphanage in Cambodia, but that A had subsequently been acquitted in May 2007.
In November 2007, B received further information from the Metropolitan Police Child Abuse Investigation Command (CAIC) alleging that A had engaged in other serious paedophile activity in Cambodia, which led the CAIC to believe that A posed a continuing threat to children. Officers from CAIC agreed to give limited disclosure to the local authority. They met with X, the public authority's HR adviser, and told her that the information they had provided was only "the tip of the iceberg". In January 2008, A was invited to a disciplinary meeting and then dismissed by B on the grounds of breach of trust and confidence. A brought claims of unfair and wrongful dismissal in the tribunal. The tribunal found that A had been fairly dismissed on the basis of a breakdown of the fundamental relationship of trust and confidence being "some other substantial reason" justifying dismissal, under s.98 (1) of the Employment Rights Act 1996.
EAT decision
The EAT upheld the tribunal's decision that the summary dismissal was fair. In particular, the EAT considered the risk of reputational damage to be sufficient grounds for reaching this conclusion and that it was reasonable for the authority to have taken the step to dismiss in those circumstances. The EAT also dismissed the wrongful dismissal claim. The EAT did however comment on the CAIC officers' approach to disclosure and recognised that the "tip of the iceberg" comment undermined the purpose of limited disclosure by adding a prejudicial gloss to the information which was passed to B, the authority.
Key points for employers
The EAT's comments illustrate that employers should investigate the basis of any tip offs which they receive about an employee if they wish to pursue a disciplinary route. The EAT also made it clear that an employer who receives information as part of an official disclosure process (in this case that the employee posed a risk to children) is entitled to treat the information as reliable.
Buckland v Bournemouth University
The Court of Appeal has ruled that a professor was entitled to resign and claim constructive dismissal after his exam papers were remarked without his knowledge. It was accepted that Professor Buckland's academic integrity had been seriously called into question after one of the University's programme leaders expressed concern that Professor Buckland failed 18 out of 60 students in an end of year exam. As a result, the Head of Department had the papers remarked and circulated the revised marks. Professor Buckland raised a grievance and the University set up an inquiry to consider the events. The inquiry's report vindicated Professor Buckland and criticised the Head of Department for approving the revised marks. Buckland decided to resign when the outcome of the inquiry was published, citing constructive dismissal on the grounds that his integrity as an examiner had been seriously undermined. The tribunal found that Professor Buckland had been dismissed because the remarking of the papers amounted to a fundamental breach of the contract of employment. The University appealed against the finding.
EAT decision
The EAT overturned the tribunal finding of constructive unfair dismissal and instead held that that the breach of contract had been cured by the internal inquiry which exonerated Professor Buckland. As such, Buckland was not constructively dismissed because the breach of the implied term of mutual trust and confidence had been repaired.
In addition, the EAT rejected the University's attempts to argue there could only be a fundamental breach of contract if the University's actions fell outside the range of reasonable responses.
Court of Appeal decision
The Court of Appeal upheld the decision of the EAT that the correct test for constructive dismissal is a contractual test rather than a "range of reasonable responses" test. The Court of Appeal, however, overturned the EAT's decision on liability and rejected the suggestion that a fundamental breach of contract could be cured by subsequent actions. As a result, the inquiry's report, whilst vindicating Buckland, could not cure the University's fundamental breach of his employment contract. Effectively, the Court decided that once a breach has taken place, it cannot be repaired.
Key points for employers
The case emphasises that proper procedures should be followed at all times and that serious lapses cannot be cured after the event. The facts of this case could equally apply to any other procedures (i.e.. appraisals, competency marking and redundancy scoring) where employers might seek to overrule a manager's input.
Raja v Secretary of State for Justice
An interim relief application under s.128 of the Employment Rights Act 1996 is a powerful tactical tool which Claimants can use against a Respondent. S.128 ERA provides that an employee bringing a claim for unfair dismissal who alleges that the dismissal occurred because of his activities as a union member, health and safety representative, employee representative for the purposes of TUPE, trustee of an occupational pension fund, or because he has made a protected disclosure, may apply for interim relief. If the tribunal find it is likely that the reason for his dismissal is one of those specified then it can require the employer to reinstate or re-engage the employee on the same terms as if he had not been dismissed, or, if an employer is unwilling to reinstate or re-engage the tribunal will make a continuation of employment order. The effect of such an order is that the contract of employment continues in force from the date of its termination until the determination or settlement of the complaint.
This gives the Claimant a useful opportunity to put the Respondent under high pressure at the outset of a claim, because it forces the Respondent to incur the cost of fighting the interim relief application and so increases the prospects of settlement dialogue being opened. Any payments made under an order cannot be recovered by the Respondent even if it succeeds at the full merits hearing. The Claimant can benefit from being fully funded throughout the claim. Naturally, it carries the risk of backfiring for the Claimant if the application is rejected.
EAT decision
The Raja case involved an appeal brought in the EAT after his interim relief application was rejected by the tribunal. The EAT was concerned with two points of appeal. The first was what the meaning of the word "likely" ought to be in relation to the test for an interim relief application. The EAT considered previous case law and decided that the right approach was whether the applicant had established a "pretty good" chance of succeeding in the final application to the tribunal. The second point of appeal in Raja was whether the tribunal judge was correct to refuse to hear Raja's application because of the volume of material produced to the hearing - which the employment judge at tribunal had deemed inappropriate in an application for an "emergency order". The EAT disagreed and decided that the mere volume of material was not in itself a reason to refuse the application.
Key points for employers
The Claimant only has a small window of opportunity within seven days of the termination date to submit an interim relief application. Employers should be on their guard because the tribunal will aim to list the interim relief application quickly so the employer needs to be prepared to respond quickly and prepare thoroughly once it is on notice of an interim relief application. Oral evidence is not usually required.
Shanahan Engineering Ltd v Unite the Union
Where an employer proposes to make 20 or more employees redundant within a period of 90 days, it must inform and consult with appropriate representatives of affected employees for a prescribed period based on the numbers involved. Failure to do so can result in an employment tribunal ordering a "protective award" of up to 90 days of pay per employee.
In Shanahan Engineering Limited, the company argued that "special circumstances" excused it from the requirement to inform and consult. In 2007 Shanahan won a contract for work on a power station being constructed by Alstom. The work involved the construction of two generators, being built simultaneously on a site. Under the contract Shanahan was paid the costs of the labour it used together with a fee. Alstom had the power to instruct Shanahan whether to start, stop or not to start any work. In April 2008, a problem on site was caused by congestion and ground conditions. On 30 April, Shanahan submitted proposals to eliminate the problem including a proposal to build the generators consecutively.
Alstom accepted the proposal and instructed Shanahan on 1 May 2008 to reschedule its remaining works with immediate effect and review its resources on site in line with the new schedule. Alstom expected this to result in the immediate reduction of labour, subject to consultation in line with statutory requirements. Alstom asked for confirmation that Shanahan had implemented these action by close of business on 1 May. Shanahan proceeded to make 50 employees redundant with effect from 2 May 2008 but did not inform or consult with representatives of the affected employees.
In response, Unite brought a claim to the tribunal seeking protective awards on behalf of the affected employees. Shanahan argued that it was excused from the requirement to inform and consult as special circumstances existed.
The tribunal found that special circumstances did exist, in that Shanahan had been faced with a situation whereby, suddenly, it no longer required as many employees as it had previously. These circumstances relieved Shanahan of the obligation to start consultation. The special circumstances did not, however, entirely remove the requirement to inform and consult. The tribunal felt that Shanahan should still have complied with its obligations, even within the short timescale that was available to it of a few days. As a result of this failure to consult, the tribunal ordered Shanahan to pay each of the dismissed employees of 90 days pay (gross). The level of these awards is currently being reviewed and it is likely they will be reduced; however, each employee will still receive some award.
EAT decision
Shanahan appealed but the EAT upheld the tribunal's decision that the company was in breach of the consultation obligations. The EAT held that the Tribunal had failed to justify its reasons for granting a protective award of 90 days. The case was remitted to the tribunal to reconsider the award.
Key points for employers
A sub-contractor instructed to suspend works, resulting in a sudden reduction in staff numbers, may not need to comply fully with the duty to inform and consult. It should, however, aim to comply as far as possible within the available timeframe to minimise the risk of a protective award being made.
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.
