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Unfair Dismissal 2 - Lecture notes 9

Employment Law 1 (University of East Anglia)

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TERMINATION OF EMPLOYMENT : UNFAIR DISMISSAL [Potentially fair reasons to dismiss and the
s.98 RORR test]

WHAT DOES THIS COVER IN THE EMPLOYMENT ‘LIFE CYCLE’?

- Who is an employee?
- How is an employment contract formed?
- What are the terms of that contract and how do these regulate the relationship between the parties?
- How does an employment contract come to an end?
- When and how can an employee be lawfully dismissed?

INTRODUCTION: TWO PART TEST FOR UNFAIR DISMISSAL

- Potentially fair reason for dismissal
- Employer has acted within the range of reasonable responses test
o Test differs depending on why the dismissal has occurred (varying standard of reasonableness)
 Really important to get the dismissal under the correct head of reasonableness
o BUT for all dismissals the procedure must be followed

DISMISSALS FOR “SOME OTHER SUBSTANTIAL REASON” (SOSR)

- No statutory definition of SOSR but it is designed to catch potentially fair dismissals which do not fall into any
of the other categories. The policy adopted is to give this a wide interpretation on the basis Parliament
cannot have intended to provide an exhaustive list of reasons which would constitute fair reasons for
dismissal and therefore only listed the most common ones. Note the requirement for it to be a “substantial
reason” i.e. a reason that is not trivial or insignificant.
o Intent of Parliament was that it would act as a ‘catch-all’ provision for situations that has not been
foreseen
- The employer only has to show that the reason COULD be SOSR and not that it actually DID justify the
dismissal
o Willow Oak Developments Ltd v Silverwood
 Employees were asked to sign new contracts of employment which contained restrictive
covenants prohibiting behaviour when employment had finished. The clauses will be
enforced when they are a protecting a legitimate business interest but the clauses were too
wide to be enforceable. Employees (refused I think??) were dismissed. They brought a claim
for unfair dismissal.
 FIRST INSTANCE: Tribunal said that because the clauses were unenforceable it was an unfair
reason
 APPEAL: held that it is only relevant that the dismissal based on the clauses could potentially
be fair (assessing whether it was or not is to be dealt with at the second stage

COMMON EXAMPLES OF SOSR DISMISSALS

- Expiry of fixed term contracts
o Constitutes a dismissal under law, but is not one of the other heads so amounts to SOSR
- Third party pressure
o Not as rare as it appears
 Someone managing a contract didn’t get on with the buyer under that contract. No issues
with job etc.
 Buyer said that they couldn’t deal with her and refused to.
 Had the contract been dismissed then it would’ve led to redundancies.
 Where a reason like this is the case it will be SOSR.
 Seems harsh but is potentially fair so fits.
- Refusal to accept changes to terms and conditions
o Willow Oak Developments: dismissed them on the basis they would not accept new terms (fits
under SOSR).
o Whether it is actually fair is decided under the range of reasonable responses
- Personality clashes
- Breakdown in trust and confidence

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o Not generally used as a reason to dismiss

o Frowned upon in the courts, its too simple to claim on the part of an employer: it can have a very
broad application
o The process for SOSR is not as precise as other heads of dismissal
o Lund v St Edmunds School
 Where conduct causes this breakdown a business should use the heading of conduct and
follow those procedural rules
- Conflicts of interest
o Private life of an employee does matter if it can have an impact upon trade etc.
o When assessing the fairness of this (at the second stage) you would have to be able to prove a real
risk to trade etc.

DISMISSALS FOR “CAPABILITY OR QUALFICIATIONS”

- Capability covers poor performance or ill health
- Qualifications can include internal qualifications awarded by the employer
- Blackman v Post Office:
o Internal aptitude test that was imposed after he’d been working there for some time.
o Dismissal was fair.
- Tayside Regional Council v McIntosh:
o Tribunal initially took a narrow view of the provision.
o Mechanic lost his driving license.
o Tribunal looked at the fact there was no contractual obligation for him to hold a driving license.
o Appeal: EAT held that was a construction that was too narrow. Job advert and offer letter said he
needed a driving license and this was accepted in the business. The EAT said this background was
enough to justify a dismissal based on qualifications.
- Evans v Bury Football Club Co Ltd:
o Suffered severe injury.
o Manager gave him a job as an assistant physio but was not qualified.
o Manager changed.
o New manager dismissed Evans as he was not qualified as a physiotherapist.
o Held: it did not matter that he was being replaced by someone doing the same job, all that mattered
was that he did not hold the desired level of qualification.
- Appleyard v Smith Ltd:
o Lost license but had previously been a mechanic.
o Argued he should be moved back to his mechanics job.
o Told he couldn’t do it as they had to test their work and he couldn’t without a license.
o Held:
 The employer was entitled to insist upon them holding a full driving license: no need to
disrupt their current working patterns.

DISMISSALS FOR “CONDUCT”

- Can be either a single act of serious (gross) misconduct OR a series of acts that are less serious but which
culminate in dismissal (cumulative effect).
- Only dismissals for gross misconduct justify “summary” dismissal i.e dismissal without notice or payment in
lieu of notice so dismissal for a series of lesser acts of misconduct will be on notice.
o Gross misconduct dismissal – EDT will be date of dismissal (no s.86 extension)
o No requirement for payment in lieu of notice or notice period either
o Less serious conduct dismissal will still be protected by notice provisions
- Summary dismissal doesn’t mean dismissal without procedure!
- Note: can be dismissed for conduct outside the workplace if it has an effect on the employee doing his work
o Singh v London Country Bus Services Ltd
 Singh was the driver of a one man operated bus.
 Singh had been convicted of a building society fraud.
 Employer learned of this and dismissed him from conduct.
 Singh argued it had nothing to do with anyone or anything related to his work.
 Held:

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 The fact that Singh is in charge of receipts and takings and dishonesty has been
proven, it’s okay for the employer to dismiss him for that conduct outside of work
(there was a sufficient link between implications of the conduct and his role in the
workplace).
 Past conduct is relevant in some cases.
 Conduct outside of work can also extend to reputational damage where reputation is
important to the employer I.e. fire service.
- There is a distinction between can’t and won’t here
o Can’t = Capability reasons
o Won’t = Conducts as you’re exercising a choice.
 Alcoholism amounts to capability as you have lost your free will to decide to drink (links to
dependency)

COMMON REASONS FOR CONDUCT DISMISSALS:

- Theft
- Physical violence
- Persistent lateness
- Insubordination
o Provided for by implied terms – obligation to obey reasonable requests and order provided that they
are lawful
- Misuse of IT/social media
o Can mean either in the course of work or personal use that brings a company into disrepute
- Alcohol/drugs
o Dependency and loss of choice to take can result in a capability dismissal instead of conduct
- Bullying

DISMISSALS FOR “STATUTORY RESTRICTION”

- Very narrow in its construction: means where you continue to employ someone you will be in breach of
statutory provisions so have to dismiss them
o Most common example is employment of someone with an expired visa or a driver without a driver’s
license.
TWO ELEMENTS:
1. Must actually contravene a statutory restriction and mistaken belief will not suffice
2. BUT mistaken belief could still give rise to a fair dismissal under SOSR however.

Bouchaala v Trusthouse Forte Hotels Ltd

- Tunisian national came to UK on a student visa
- Trained to become a manager with the intention of returning to Tunisia to manage but decided halfway
through to not return to Tunisia and lost student visa
- Home Office advised the company and said they had to dismiss her
- HELD:
o They were legally wrong, technically the person could’ve been employed and stayed in the country
while applying for a full visa.
Klusova v LB of Hounslow
- Russian national and end of visa term
- Dismissed by LB of Hounslow after they got wrong advice saying she could not stay while her visa issues were
sorted.
- At law, she could’ve stayed while issues were sorted
- HELD:
o If an employer mistakenly believes they are governed by a statute requiring dismissal it will
constitute a SOSR dismissal
o NB: The belief must be entirely genuine.

SOSR – FAIRNESS TEST UNDER S.98(4)

- Whether an SOSR dismissal falls within the range of reasonable responses will be fact sensitive but could
involve:

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o Investigating the situation,

o Consulting with the employee,
o Warning the employee of the risk of dismissal,
o Giving the employee the opportunity to state their case,
o Exploring the possibility of redeployment, and
o Balancing the needs of the employer and employee.
- There is no fully laid down procedure: partially a matter of common sense. However, procedure should be
paramount in all situations.

CAPABILITY – FAIRNESS TEST UNDER S.98(4)

- No single test or case but for poor performance dismissals the tribunal will consider factors such as:
o Whether the employee knew what was expected of them
o Did the employer take steps to minimise the risk of poor performance?
 For example, reducing workload if employee is overloaded
o Did the employer provide training and supervision?
 E.g. HMRC case where they moved to using a computer system
o Whether it warned the employee of the consequences of failing to improve
 Giving the employee information is key – how to improve and by when
o Whether it gave the employee a chance to improve, and, in some cases,
o Whether it considered alternative employment before dismissing.
 Are they still good at their old role following promotion for example?
- NB: Note: In rare cases, a single act of poor performance may justify dismissal
o Alidair Ltd v Taylor
 Taylor was a pilot who landed a plane so badly that it came down on its nose and wing –
investigation showed it had to be pilot error so was dismissed incapability.
 HELD: was fair to dismiss for one act of extreme negligence
o The CA identified a number of roles where a single mistake could lead to drastic consequences e.g.
pilot, train driver, nuclear scientist, but in MOST cases an employer must address
capability/performance issues with the employee as described above to meet the test of
reasonableness.

CONDUCT – FAIRNESS TEST UNDER S.98(4)

- Employer must show:
o At the time of dismissal, it believed the employee to be guilty of misconduct, and
o At the time of dismissal, it had reasonable grounds for believing that the employee was guilty of that
misconduct, and
o At the time that it formed that belief on those grounds, it had carried out as much investigation as
was necessary in the circumstances.

- British Home Stores v Burchell (governs the fairness test for conduct)
o Burchell was a shop floor worker in BHS.
o Investigation started because of allegations that some members of staff were fraudulently using the
staff purchase system.
o One of the other employees implicated Mrs Burchell as being a part of this.
o Full investigation then undertaken by an ex-met police officer.
o Concluded that you would not be able to achieve a criminal conviction against her (I.e. it had not
been proven beyond a reasonable doubt).
o She was dismissed.
o She argued that because she could not be proven guilty she could not be dismissed.
o HELD:
 Established the tripartite Burchell test.
 1)Genuine belief of guilt of misconduct
 2)This belief must have reasonable grounds.
 3)The reasonable grounds must have been formed by a reasonable investigation as
to the circumstances. (Reasonable belief after reasonable investigation.)
CONDUCT – DISCIPLINARY INVESTIGATIONS

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-The requirement for an investigation to take place prior to any disciplinary action is crucial. Without this it is
almost inevitable that an employer will fall foul of both the Burchell principles and the ACAS Code of Practice.
- This is so even in cases of apparently “obvious guilt”.
o The merit of a dismissal is dealt with via the amount of compensation a tribunal will award.
- What is a reasonable investigation?
o Will vary enormously depending on the individual circumstances of the case
o The employer must ensure that the relevant facts have been established so that is clear to the
employee what is being alleged in sufficient detail to enable a meaningful response
o The more complex and serious the allegation, the more detailed, extensive and even-handed the
investigation required.
CONDUCT – DISCIPLINARY INVESTIGATIONS – Who should investigate?
- The general rule is that those involved in any kind of disciplinary process can only take one role so
o Not a witness
o Not a disciplinary officer
o Not an appeal officer
- Carmelli Bakeries v Benali
o Benali worked at Carmelli
o This is in a very strict orthodox Jewish bakery.
o A Rabi inspects the business everyday to make sure they are using Kosher ingredients.
o Benali is responsible for putting the jam in the doughnuts.
o Mrs Carmelli finds a receipt from Tesco’s for jam whilst doing the account and knows you cannot get
Kosher jam there.
o She is not pleased and her son is appointed to investigate.
o Talks to Mr Benali who responds to this by saying ‘I sent Elma to get jam and you know he’s done
that before.’
o At this point the son should’ve become a witness as to Elma’s behaviour.
o Held:
 By continuing as investigator he prevented the evidence coming to light regarding Elma’s
prior behaviour.
 Also it should ideally be someone without any personal involvement and someone with
training and experience of carrying out investigations
 For an example of how the EAT approaches investigations general see
 Yeung v Capstone Care Ltd

STATUTORY RESTRICTION – FAIRNESS TEST UNDER S.98(4)

- The tribunal will consider:
o The extent of the statutory restriction and the extent to which it affects the employee’s ability to do
their job, and;
o the duration of the statutory restriction, and;
o any alternatives to dismissal by way of adjustments to the job or alternative employment.

FAIR DISMISSAL PROCEDURE

- In addition to having a fair reason for dismissal and acting reasonably in treating that reason as sufficient to
justify dismissal, courts and tribunals have interpreted the statutory requirements as including the concept
that, to act reasonably, an employer must follow a fair procedure.
o In exceptional circumstances, a dismissal will be unfair if the employer fails to follow a fair procedure.
This principle holds good even if the procedural failing makes no difference to the outcome i.e. the
employee would still have been dismissed if a fair procedure had been followed.
Polkey v A E Dayton Services Ltd***
NB: Polkey is probably the most important employment law case in the last 30 years. Essentially, whether the
procedural failing affected the outcome of the decision is not relevant and will not prevent a finding of unfair
dismissal.
FACTS:
- A number of drivers of a garage (4).
- Employer wanted 2 salesman and 1 driver so 1 driver had to be dismissed.
- Called the first one in and told him he was redundant.

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- Mr Polkey drives him home, gets back to the garage and is also dismissed.
AT TRIAL
- Employer says they didn’t follow any procedure but that it made no difference – because of this the decision
wasn’t inherently unfair. Pre-Polkey this would’ve been accepted bc of British Labour Pump v Byrne
- British Labour Pump
o If an employer could show that it would have been dismissed anyway following a fair procedure then
the unfairness was ‘cured’.
HELD:
- You cannot cure lack of procedure on the basis it would make no difference as it would involve hindsight.
When dismissing you can only use information that was known or discoverable at the time of dismissal: to
allow British Labour Pump’s precedent to stand would circumvent this requirement with no apparent benefit.
- Knowing it would make no difference at the time of a dismissal is an impossibility without fair procedure.
o Is it not unjust that a wholly unmeritorious employee who has been dismissed for serious
misconduct can succeed in an unfair dismissal claim purely because an employer has failed to follow
a fair procedure?
- The tribunal deals with this issue by means of an adjustment to the level of compensation awarded. Such a
claimant will have their compensation reduced (by as much as 100%) to reflect the potential injustice to the
employer. This is known as a Polkey reduction and we will consider this further when we look at remedies.
o BASICALLY – if you can show that a dismissal would’ve occurred even if fair procedure was followed
then the claimant (employee ) for unfair dismissal can have their compensation/damages reduced up
to 100%.

ACAS CODE OF PRACTICE ON DISCIPLINE AND GRIEVANCES

- Applies to conduct and poor performance dismissals but not capability dismissals due to ill health and
requires an employer to:
o Investigate the issues;
o Inform the employee of the issues in writing;
o Conduct a hearing with the employee;
o Inform the employee of the decision in writing, and;
o Give the employee the right of appeal against that decision.
 NOTE: Lund v St Edmunds School – where the ACAS COP uplift for failure to comply was
applied to a SOSR dismissal
o An unreasonable failure to comply with the provisions of the ACAS code can lead to a 25% increase/
decrease in the level of compensation awarded depending on who is responsible for the failure.
- Paragraphs 18-3 of the Code deal with sanctions for misconduct
o An employee should not normally be dismissed for a first act of misconduct unless it is sufficiently
serious i.e gross misconduct. A system of warnings should be put in place for lesser acts of
misconduct.
- CoP also deals with grievances
o “Grievances are concerns, problems or complaints that employees raise with their employers
 If an employee raises a grievance then it must be dealt with in accordance with the Code.
Failure to do so could amount to a repudiatory breach of contract (due to the implied term in
all employee contracts)
- An unreasonable failure to comply with the provisions of the ACAS code can lead to a 25% increase/
decrease, depending on who is responsible for the failure.

RIGHT TO BE ACCOMPANIED
- Section 10 Employment Relations Act 1999
o Where a worker ‘reasonably requests’ to be accompanied at a ‘disciplinary hearing’ the employer
must permit the worker to be accompanied by a companion. The companion may be a trade union
representative or a fellow worker – s10(2)(a)
- A disciplinary hearing is deifned as a hearing that could result in
o the administration of a formal warning - S.13(4)(a)
o the taking of some other action - S.13(4)(b)
o the confirmation of a warning issued or some other action taken - S.13(4)(c) (i.e appeals)
SUMMARY

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- Look at slides 27 -29 if confused.

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