To what extent do the contract of employment and statute regulate the employer’s power to dismiss an employee?
When looking at the power of the employer to dismiss an employee it is necessary to examine the changes that have occurred in employment law in recent times. The first employment Acts in use in the UK regarded the employee more as a servant to the employer than a contributing member of the workforce. A recent culture of challenging the employers’ right to terminate their employment and the introduction of anti-discrimination legislation has led to an abundance of case law in these areas.
Membership of the European Union has also had an impact on employment law in the UK in particular with respect to working hours and equal pay between the sexes. There have also been a number of unfair dismissal claims taken to the European Court for Human Rights. These have largely been centred on sex discrimination or disability discrimination.
With the increase in rights afforded anti-discrimination legislation employers have to be extra careful when terminating an employee’s contract that their reason for their dismissal cannot be deemed to be unfair. According to s94 of Employment Rights Act 1996 an employee has the right not to be unfairly dismissed. Section 98 of the same Act places a duty on the employer to prove that the dismissal was fair. Amongst the list of reasons that are unlikely to give rise to a claim for unfair dismissal would be things such as the person does not have the capability or qualification for the job, the employee behaves in an inappropriate manner, redundancy , the dismissal is the effect of a legal process such as a driver who loses his right to drive or some other substantial reason.
Before an employer can dismiss an employee who does not have the qualifications for the post or is not capable of carrying out his role the employer would have had to have consultations with the employee and any line manager or supervisor that he has to report to. It would also be necessary to adhere to any disciplinary procedures that are in force within the company so that the employee has been given every opportunity to meet the required standard. Where training should be given the employer must ensure that the employee has been given suitable training and before dismissing them should ensure that if the employee has previously asked for extra training in a particular area they were having difficulty in that this has been given to them. If an employee could establish that they had asked for extra assistance and this had not been given this could give grounds for a claim for unfair dismissal.
When dismissing an employee for inappropriate behaviour the employer should ensure that the company’s disciplinary procedures has been properly conducted and that all avenues have been explored to try to curb the behaviour of the employee. The contract of employment issued to the employee when they are appointed to the post should clearly lay down the company’s policy with regards to how they deal with inappropriate behaviour and should also outline what is deemed by the company to be seen as unreasonable behaviour. Before dismissing the employee they should be reminded of the company’s policy on inappropriate behaviour and have it explained to them the manner in which it is alleged that their behaviour has breached this policy. An opportunity should then be given to the employee to alter their behavioural patterns so that they can conform to what is acceptable behaviour in the workplace. If despite having been reminded of appropriate conduct and having been given the chance to amend their behaviour, the employee still continues to behave in such a manner than it is unlikely that grounds for unfair dismissal would be proved if the employee was subsequently dismissed.
In relation to dismissal through redundancy the employer has to be careful to ensure that all other options to redeploy the employee in an alternative role have been exhausted and that there are good sound business reasons for the removal of the post that the person has been employed in. They also have to be mindful when selecting persons for redundancy that the ones selected have not been selected unfairly. An example of when such an instance could arise is if the company dismissed a female employee in preference to a male employee because they would prefer for the role to be undertaken by a male. If the female were able to show that she had been selected because of her gender then she would be entitled to claim for unfair dismissal on the grounds of sex discrimination. Similarly if an able bodied employee was saved from dismissal in place of a disabled one then the disabled employee could lodge a claim for unfair dismissal using the disability discrimination act.
Where the dismissal has been brought about due to some form of legal process the company have to be mindful of the charges that the employee has had made against them. Obviously if a driver became banned from driving as a result of a criminal conviction for a driving offence the employer might be left with no alternative but to terminate their employment as the employee may well not be qualified to take on another role within the company. Where it is possible to offer the driver an office based role until he is entitled to drive again the company may find that if they dismiss the employee rather that offer them the office based role that the employee could have a case to argue for unfair dismissal. It is impossible to decide on such issues as to whether an employment tribunal would consider this unfair as they might be of the opinion that the employee’s demise is as a direct result of his own conduct. They could hold the opinion that the driver has deliberately made himself unemployable as a driver by getting himself banned from driving.
A further complication that might occur when dealing with an employee that is being dealt with by the courts for a criminal charge is on the issue of suspension from employment. In some instances when an employer becomes aware that an employee is facing criminal charges the employee has been suspended from work until the outcome of the trial is known. This could have the effect of influencing a jury into assuming that the person is guilty as they may well feel that those who have had close contact with the offender are uncertain as to whether the person charged is innocent or not. Dismissing an employer that has not yet gone to trial is even more likely to raise the issue of unfair dismissal as the employer has made the assumption that the employee is guilty before the courts have made their decision.
When dismissing an employee the employer should be aware of the fact that any employee that has been employed for over a year has the right to claim unfair dismissal within 3 months of the dismissal. Employees can also bring a claim of unfair dismissal if they have been pressured to resign providing they can show sufficient proof to the tribunal that such pressure has been exerted. Some dismissals are inherently unfair such as a pregnant woman being dismissed because she is going to be able to carry out her usual tasks involved in her employment.
The Employment Act 2002 has amended the way in which employers should proceed before they can dismiss an employee. Under Schedule II of the Act there are 2 ways in which the employer can proceed. Chapter 1 of the Schedule deals with the standard procedure and lists the 3 stages that should be complied when the employer is considering dismissal. This has been defined as the Dismissal and disciplinary procedure. In the first stage
1(1) the employer must set out in writing the employee’s alleged conduct or characteristics, or other circumstances, which lead him to contemplate dismissing or taking disciplinary action against the employee and
(2) must send the statement or a copy of it to the employee and invite the employee to attend a meeting to discuss the matter.
The second stage of the process is the meeting. Unless the employee is to be suspended from work the meeting should take place before any disciplinary action is taken. The meeting should only take place if the employee has
2 (2) (a) been informed what the basis was for including in the statement under paragraph 1(1) the ground or grounds given in it, and
(b) the employee has had a reasonable opportunity to consider his response to that information.
Having been given the appropriate notice and grounds for the dismissal
(3) the employee must take all reasonable steps to attend the meeting.
Following the meeting the employee should be notified by the employer of the decision they have made. The employee should also be told of his right to appeal if he disagrees with the decision.
If the employee disagrees then an appeal should be lodged by the employee. The employee must notify his employer of his intention to appeal and another meeting must be arranged between the employee and the employer. The employer must endeavour to take all the necessary steps to attend the meeting. The employer is entitled to dismiss or suspend the employee before the meeting occurs and after the second meeting is concluded the employer must inform the employee of their decision in this respect.
The modified procedure laid down in Schedule II removes the requirement for a meeting to be held before the employee is dismissed and goes straight to outlining the reasons for the dismissal and the right of the employee to appeal that decision. If the employee chooses to appeal a meeting will be held at this stage and the decision of the employers will be given to the employee at the end of the meeting.
The requirement that employers follow the procedure as highlighted above are further bolstered by section 30 of the 2002 Act which deals with contracts of employment. Under this section every contract of employment will require the employer and the employee to comply with the requirements of the procedure for dismissal where such statutory requirement is required. This effectively means that the employer would be under a duty to issue in writing the reasons why they are considering terminating the employment and inviting the employee to either attend a meeting to discuss this before the dismissal is enacted or informing the employee of the right to appeal and then holding a meeting if the employee wishes to appeal.
If the agreed procedure with dealing with employees before dismissal is not covered by a statutory requirement then despite this being incorporated into the employment contract the employee would not be able to enforce the procedure. This might occur if the company operate a policy of the issuing a 2 verbal warnings followed by one written warning before the employee can be dismissed. If in the opinion of the employer the conduct of the employee is such that dismissal should be instant he can jump straight to dismissal procedures without having to adhere to the procedures as outlined above. Although in essence this would appear to be a breach of the employment contract as no verbal warnings were given as stipulated there is no statutory requirement for such warnings to be issued and the employee would not be able to assert his rights under the contract.
The Employment Act 2002 has made it a direct requirement that all employers must have a disciplinary procedure in places that satisfies the requirements of the Dispute Resolutions Regulations 2004. The size of the company makes no difference in respect of the necessity for a disciplinary procedure to be required. Even if the company only has one employee they would still need to meet the requirements of the Dispute Resolutions Regulations 2004. S3 of the Regulation lists when the disciplinary procedures should be followed before dismissal of an employee. Under s6 of the Regulation guidance is given to employees as to when they might be able to bring a grievance procedure against their employer. The basic rule is that a standard grievance procedure applies where the employer is proposing on taking an action which if carried out could allow the employer to bring a complaint in an employment tribunal. Where the employee has been dismissed the modified grievance procedure would be applicable.
The Employment Rights Act 1996 deals specifically with employment contracts and requires employers to give new employees a written statement concerning the particulars of their employment. The written statement has to include the names of both the employee and the employer, the date when the employment began and the date when the employee’s continuous employment began taking into account any past employment with a previous employer that might count towards continuous service. Within the statement shall be the rate of pay, the contractual hours the frequency of pay, entitlement to holidays, sick pay, maternity leave and pension schemes and the period of notice the employee is required to give when leaving that employment.
There should also be a brief description of the specifications of the role so that the employee knows the tasks they are expected to perform. This particular element could prove useful for an employer if they are seeking to dismiss an employee for not being capable of doing the job. If the employer is seeking to dismiss an employee for their work not being up to the standard expected or for refusing to do certain tasks the contract of employment would assist the employer as they could point to the fact that the employee was made aware of their role from the date they commenced employment.
The written statement should also include the disciplinary procedures that are in place within the company or alternatively the statement should refer the employee to specific documents that specify such rules. This document has to be easily accessible to the employee so that if a need arises to take disciplinary action against that employee they will know of the procedure and also their rights in responding to the actions being taken against them.
Any proposed changes to the terms and conditions of the employee’s contract must be in writing so that the employee is fully aware of the proposed changes. The employee is unlikely to be given the opportunity to discuss the proposed changes or claim against the employer for the changes unless these changes relate directly to deductions from pay or reduction in pay.
Within the Employment Rights Act 1996 s86 deals with the notice required to be given by the employer before dismissing the employee. Failure to adhere to the required limits could allow the employee to claim against the employer for unfair dismissal. The Act also reinforces the 2002 Act in respect of requiring the employer to give written notice to the employee stating the reasons for their dismissal and must outline their rights of appeal.
It is obvious from the above that a contract of employment puts a duty on both employee and employer to act in certain ways and to perform certain functions. Failure by the employee to perform according to their contract could lead to disciplinary action or ultimately dismissal. By the same token if the employer fails to meet his end of the contract by following the statutory procedure for disciplinary action they could be faced with an action being brought against them in an employment tribunal on the grounds of unfair or constructive dismissal.
The employer is able to avoid the requirements of the Dismissal and disciplinary procedure under certain circumstances these being that they reasonably believe that doing so would result in a significant threat to themselves, any other person, or their or any other person’s property, they have been subjected to harassment and reasonably believe that doing so would result in further harassment, because it is not practicable within a reasonable period, they dismiss a group of employees but offer to re-engage them on or before termination of their employment, there are collective redundancies and they consult with employee representatives, the business closes down suddenly because of an unforeseen event or the employee is no longer able to work because they are in breach of legal requirements. These are all covered under s11 of the Dispute Resolutions Regulations 2004.
It is obvious that the areas highlighted above where the dismissal and disciplinary procedure can be circumvented should be treated in this manner. It would be unconscionable to expect an employer to have to allow an employee to continue in their employment when there could be a significant threat to themselves or others or where they have been subjected to harassment by the employee. It is also obvious that where the company is closing down that redundancy will be inevitable and it would be impossible to avoid making employees redundant.
Some employers have had difficulty in understanding the new requirements with regard to dismissal and have not complied with the statutory requirements as a resolute of their misinterpretation of the requirements. It is essential that all employers are fully instructed in the statutory requirements if they are to avoid allegations of unfair dismissal.
It would appear that the regulations and Acts now in force are designed more to protect the rights of employer than for the protection of employers rights. The contract of employment would appear to offer protection from dismissal to employees but is counterbalanced by requiring the employees to work to specific standards and to perform certain tasks that their role dictates. The general trend of more and more cases of unfair dismissal being brought in industrial tribunals would seem to suggest that employers are failing to heed the requirements that statute and employment contracts place on them. A substantial amount of claims for unfair dismissal still revolve around sex discrimination or disability discrimination which would seem to be an indicator that employers have not take on board fully the impact of the legislation in these areas. In order to reduce the amount of unfair dismissal hearings employers are going to need to exercise even greater care to ensure full compliance with disciplinary procedures. If they adhered more closely to these procedures then the issue of gender or disability often raised would be diluted and there would be fewer matters raised before a tribunal.
Berry, A, Dealing with your Dismissal in One Week, 2000, Hodder & Stoughton
Inns of Court Law School, Employment Law in Practice, 7th Ed, 2006, Oxford University Press
Painter, R & Holmes, A, Cases and Materials on Employment Law, 2006, Oxford University Press
Rich, M, Edwards, I, Mead, H, Mead’s Unfair Dismissal, 1994, Sweet and Maxwell
Table of cases
Ask Security Ltd v Foote & Anor  UKEAT 0433
Avid Technology Europe Ltd v Breedon  UKEAT 0254_
Bankhead v Directorate of Naval Reserves & Ors (Unfair Dismissal/Disability Discrimination)  NIIT 1142 03; Edem v Egg Plc & Anor  UKEAT 0573
British Airways Plc v Employment Appeal Tribunal Decision  ScotCS 309
Cooper v West Yorkshire Police & Anor  UKEAT 0035
Department for Constitutional Affairs v. Jones  UKEAT 0333
Devlin v Royal Mail  NIIT 2550
Draper v. Mears Ltd  UKEAT 0174
Fraser v Hlmad Ltd.  EWCA Civ 738 (15 June 2006)
Glasgow City Council v. Deans & Ors  UKEAT 0061
Glasgow School of Art v. Taylor  UKEAT 0011
GMB Trade Union & Ors v Hughes & Anor  UKEAT 0288
Greenhoff v Barnsley Metropolitan Borough Council  UKEAT 0093
Hamling v Coxlease School Ltd  UKEAT 0181
Hospitality Training Foundation v Philip  UKEAT 288
Johnson Matthey Plc v Watters  UKEAT 0236
Kelly-Madden v. Manor Surgery  UKEAT 0105
Kennaugh v David Lloyd-Jones (t/a Cheshire Tree Surgeons)  UKEAT 0032
Lake v British Transport Police  UKEAT 0154
Landeshaupstadt Kiel v Norbert Jaeger Case C-151/02
Lewald-Jezierska v Solicitors in Law Ltd & Ors  UKEAT 0165
Lewisham Social Services & Anor v Jackson  UKEAT 0331
Lipscombe v Forestry Commission  UKEAT 0191
London Borough of Barnet v Ferguson  UKEAT 0220
London Borough of Lambeth & Ors v Corlett  UKEAT 0396
Marlborough Hotel v Meiris  UKEAT 0256
Masterfoods (A Division of Mars UK Ltd) v Wilson  UKEAT 0202
McClements v Royal Mail  NIIT 1555
Nenji v Birmingham Childrens Hospital NHS Trust  EWCA Civ 1108 (29 June 2001)
O’Donoghue v Redcar & Cleveland Borough Council  EWCA Civ 701 (15 May 2001)
Pugh v National Assembly for Wales  UKEAT 0251
Scott-Davies v Redgate Medical Services  UKEAT 0273
Scottish Shellfish Marketing Group Ltd v. Connelly  UKEAT 0008
Sidhu v. Superdrug Stores Plc  UKEAT 0244
Sindicato de Médicos de Asistencia Pública v. Conselleria de Sanidad y Consumo de la Generalidad Valenciana, Case C-303/98
Singh (t/a Rainbow International) v. Taylor  UKEAT 0183
The National Union of Teachers v. L Watson  UKEAT 0204
Turesdale v Gillan & Ors (Unfair Dismissal/Sex Discrimination/Racial Discrimination)  NIIT 413
Weir & Anor (The Firm of Brae Cottage Residential Home) v. Stewart  UKEAT 0005
X v Y  EWCA Civ 662 (28 May 2004)
Table of statutes
Disability Discrimination Act 1995
Employment Act 2002
Employment Rights Act 1996
Equal Pay Act 1970
European Working Time Directive No 93/104/EC of 23 November 1993
Factory Acts 1833
Master and Servant Act 1932
Race Relations Act 1976
Sex Discrimination Act 1975
The Employment Act 2002 (Dispute Resolution) Regulations 2004
 O’Donoghue v Redcar & Cleveland Borough Council  EWCA Civ 701 (15 May 2001); British Airways Plc v Employment Appeal Tribunal Decision  ScotCS 309; Bankhead v Directorate of Naval Reserves & Ors (Unfair Dismissal/Disability Discrimination)  NIIT 1142 03; Edem v Egg Plc & Anor  UKEAT 0573
 European Working Time Directive No 93/104/EC of 23 November 1993; Sindicato de Médicos de Asistencia Pública v. Conselleria de Sanidad y Consumo de la Generalidad Valenciana,, Case C-303/98; Landeshaupstadt Kiel v Norbert Jaeger Case C-151/02
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