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Unfair Dismissal Including Empirical Data Notes

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UNFAIR DISMISSAL
QUICK SUMMARY:
Unfair Dismissal:

1. Are they an employee (work under contract of employment)

2. Qualifying period (2 years)

3. Dismissal- ER terminates w/o notice or ER is dismissed.

4. Reasons- potentially fair and was it reasonable for ER to treat the reason as sufficient reason for dismissing the employee? (burden on ER).

5. Was it procedurally fair? (inc Breach of ACAS code)- breach of ACAS code isn't inherently unfair,
just get statutory uplift.

6. Remedies- reinstatement, re-engagement, compensation (basic award- based on job security+
length of service, compensatory- s123). Also Polkey- even if dismissal was procedurally fair,
would've dismissed anyway so damages reduced.
Wrongful Dismissal:

1. Dismissal w/o notice period.

2. Gunton Extension
Then if relevant:

3. Stigma- Malik

4. Express Procedure Breached- Edwards

5. Psych- Johnson, Eastwood.

Legal intervention warranted: dismissals generate social costs for employees, governments and taxpayers e.g govs regulate employment relationships by restricting range of feasible contracts+ raise costs of laying off workers+ increasing hours of work. However:
o Botero et al: 'heavier regulation = lower labour force participation and higher unemployment'.

Epstein- takes neoclassical approach- unfair dismissal laws impact on efficiency+ dynamism of markets
Argues in favour of US 'employment at will' approach: EE or ER can terminate at any time even w/o cause and w/o reasonable notice.
 Freedom of contract advances individual autonomypromotes efficiency of market.
 Critics don't look at the nonlegal means of preserving long-term employment relationships.
 Says flexibility from contract at will good for technological+ business change.
 …'The strength of the contract at will should not be judged by the occasional cases in which it is said to produce unfortunate results, but rather by the vast run of cases where it provides a sensible private response to the many and varied problems in labour contracting'.

Contrast the neo-classical economists with new institutional economists.
o NIE's are unconvinced with economic arguments that markets always produce efficient outcomes.
- Freyen and Oslington - Australian research that noted a relaxation in protective legislation did not have any real effect on economic costs to businesses.
Data often skewed coz OECD publishes stats on rigidity of unjust dismissal laws consulted by MNCsMNCs prefer to invest in countries with lower unfair dismissal costsincentivises jurisdictions not to implement inflexible laws that deter inward investment.

Structure, nature, content and shape of unfair dismissal laws:
 When policy decision made to offer protection, need to determine the form/content of the protection.
o Job security - regulation functions to entrench the position of an employee in a job as effectively as possible or to offer sufficient monetary compensation in return for the recognition of the employer's power to dismiss (ie UK's wrongful dismissal laws)- nb this is weak form.
 Strong form of job security:Human right not to deprive EE of job, state treats dismissal as void. 

o Employment security - concession that, during their working lives, employees will be expected to adapt to changing methods of work, to reskill and even to lose their jobs.
o Collins - innovation/technological change = employment security should be prioritised over job security to ensure economies remain competitive. Invest in training etc to reduce period between works.
UK policy in favour of employment security/enhanced employability over job property/security. Why?
(i)
EU policy has focused on desire to achieve 'flexicurity' - sees employment engagement in a transitional sense, representing opportunity to acquire skills before moving to engagements with other employers.
(ii)
'Range of reasonable responses test' - standard of review is at a lax level. Part of a broader shift from substantive fairness to procedural fairness which highlights judicial abandonment of job security.
(iii)
Disinclination of tribunals/courts to order reinstatement or re-engagement of unfairly dismissed employees in terms of power conferred upon s113-115 ERA 1996

From April 2016-April 2017 - employment tribunal statistics reveal that reinstatement/engagement in only 3 cases out of 5, 241 which proceeded to tribunal.
UK adoption of ILO Recommendation 119 of 1963 on the termination of employment provided impetus to provide greater protection, which is now enshrined in Part X of the ERA.
- The first unfair dismissal statutes were implemented to try and stop industrial action. Lots of strikes were occurring in response to dismissals.
o However, employees no longer needed unions to pursue claims as they could go through tribunals. Now that unions are in decline and the tribunal fees have done up, the unfair dismissal regime is extremely weak.

ERA 1996 Part X
 Simple explanation of the process:

1. Show employment tribunal that he is eligible to present complaint of unfair dismissal by satisfying essential crtieria and employee must not fall within an excluded category.

2. EE must show they've been dismissed in terms of definition in s95(1) ERA.

3. If EE does this onus shifts on ER to show it had a valid reason for dismissal of employee (s98(1),(2),(3)
ERA OR

4. EE can seek to proe that the reason for their dismissal was automatically unfair.

5. Reasonableness of dismissal examined s98(4)
 S94 ERA: "Employee has the right not to be unfairly dismissed"
o What does that actually mean? Right to have claim heard? There is no reengagement/reinstatement offered. Clear indication of how weak the legislation really is.
 S111 ERA: "Complaint may be presented to an employment tribunal against an employer by any person that he was unfairly dismissed by the employer"
- Implication = not in Court. Parliament intended specialist employment tribunals to deal with claims.
Eligibility to Claim
ESSENTIAL CRITERIA

1. Must be an employee (s.94(1) ERA). -not self-employed/indy contractor!
 NB: s205a(2)©- - Employee shareholders don't have right to be unfairly dismissed.
 s.108(1) ERA; s.97 ERA - Must have been in continuous employment for not less than 2 years, ending with the effective date of termination.
 Exception 1 -s108(4) ERA: someone who alleges dismissal on basis of political affiliation does not need the 2 years minimum service

This change resulted as a result of Redfearn v UK where bus driver serving predominantly local area dismissed for taking over BNP position. Held to violate Art 10 ECHR.
o Exception 2: S48 Defence Reform Act - no 2 yrs needed for employees in army,navy,RAF.
Ex parte Seymour Smith (1999)
2yr rule challenged on grounds of indirect discrimination against women as harder to clock up 2 yrs continuous service but held that even if indirectly discriminatory justified on public policy of rewarding longer service.

2. Complaint must be presented within 3 months, beginning with effective date of termination (s.111(2)
ERA).
o Longer period where not reasonable practicable for claim to be presented prior to 3 months.

3. No longer necessary to establish a weekly hours threshold;, ex parte EOC [1994]

4. Need to be working inside the UK. Further light shed on this requirement in:
Lawson v Serco Ltd [2006]-shows you can't just point to British nationality or works for a company headquartered in
GB to get protection
Hoffman in HoL divided employees into 4 camps who would benefit from unfair dismissal protection
(i)
'Standard case: working in Great Britain' @ time of dismissal, generally work in GB, occasionally abroad.
(ii)
'Peripatetic employees' eg airline pilots, international consultants etc. Where the place of employment is at date of dismissal relevant, rather than where they actually are.
(iii)
'Expatriate employees' - employees posted abroad by British employer for purposes of business carried on in GB or operating within an extra-territorial British enclave in a foreign country.
(iv)
Exceptional case of other expatriate employees with 'equally strong connections with GB and British employment law'- e.g expat school teacher yet Afghan interpretors engaged by British Gov to work exclusively in Afghan didn't (Hottak)
 Insufficient for an employee simply to point to his/her nationality or fact that he/she works for a company or another organisation registered or HQ in GB.
However, this prescriptive approach has been marginalised since Ravat [2012] where HOL said this list was not exhaustive.
Ravat v Halliburton (2012)
'Starting point is the employment relationship must have a stronger connection with GB than with the foreign country where the employee works…it will always be a question of fact and degree as to whether the connection is sufficient strong to overcome the general rule that the place of employment is decisive'.
-A clause in the employment contract which provides that Eng law governs any contractual disputes b/w parties is a relevant consideration in determining the territorial jurisdiction of employment tribunal 4 a UD case.
EXCLUSIONS


(i)
Exclusions from the right to claim
EE dismissed for reasons of national security is excluded (s.10 Employment Tribunals Act 1996).
EEs governed by dismissal procedures agreement entered between independent TU and ER which is designated by order of the SoS as satisfying certain criteria will be excluded (s.110 ERA).
Right not to be unfairly dismissed doesn't apply to share fishermen and police officers (s.199/200 ERA).
Certain employees, such as certain Crown servants and domestic servants in a household where the employer is a close relative (s. 192(1)).
If employed under illegal contract? But if employees not getting personal benefit may still be available.
Originally couldn't get protection if above normal retiring age (s109 ERA) now removed by the Eq Act 2010.

(ii)
Exclusions by agreement
In general, cannot waive rights to bring unfair dismissal claim (s.203 ERA) - agreement will be void:




FACT
S


HELD


Igbo v. Johnson Matthey Chemicals [1986]
Igbo wanted extended leave to visit kids+ husband in Nigeria. ER agreed provided she signed statement saying had to return on X date and if she failed, contract automatically terminated.
She did return before that date but didn't feel well so sent medical certificate+ didn't go into work
(unrelated to her going away). Contract terminated.
Issue- was this termination by agreement?
Held no termination by agreement (s203) makes any provision purporting to exclude provisions of ERA
void- can't agree to opt out of your statutory rights. 

This is coz if opposite conclusion reached then the whole purpose of Act could be defeated by inclusion of a single term.

However, 2 strict exceptions, designed to encourage domestic settlements/settlement agreements:
(i)
Agreed settlement as a result of intervention of an ACAS conciliation officer under s.18A and B of
Employment Tribunals Act 1996 [essentially can EE+ER reconcile differences this way as going to tribunal is stressful).
(ii)
Employee enters a valid compromise agreement, renamed 'settlement agreements' (s.203(2)(f) ERA
1996) (needs to be in writing, relate to the particular proceedings, received independent advice as to effect of proposed agreement, must have insurance).
 These are for example where ER thinks EE is underperforming, ER wants to enter settlement agreement but if EE rejects it, can't be used in evidence for any claim for constructive unfair dismissal (s111 ERA).
NB: s18 EReIA 1999: Individuals can't waive their rights to unfair dismissal claim in fixed term contracts (which used to be the case).

Protected conversations (s.111A ERA) - designed to remedy situation where ER tried to talk to EE and said
'you are not up for it' and ER wants a settlement agreement. EE can treat this as a repdiatory breach but if
EE rejects it, can't be used in evidence for any claim for constructive unfair dismissal.

Firms with fewer than 10 employees?
(iii)
 Beecroft proposals (no protection for firms with fewer than 10 employees) - rejected.
DISMISSAL
 S.95 ERA refers to 3 types of dismissal:
S95 (1) ERA
(a) the contract under which he is employed is terminated by the employer (whether with or without notice);
(b) he is employed under a limited term contract and that contract terminates by virtue of the limiting event without being renewed under the same contract;
(c) the employee terminates the contract under which he is employed, with or without notice in circumstances in which he is entitled to terminate it without notice by reason of the employer's conduct.
Burden of proof is on employee to show that a dismissal has taken place.
Termination of contract of employment by employer (s.95(1)(a) ERA)
 'You're fired' situation requires unequivocal words of dismissal (Western Excavating v Sharp).
 This also includes a summary dismissal where ER responds to an EE's repudiatory breach of contract by terminating it immediately w/o notice by reason of EE's gross misconduct.
 Was there an intention to terminate contract and would a reasonable EE have appreciated that this was
ER's intention? (Tanner v DT Kean)
 Sandle v Adeco (2016)- dismissal must be communicated e.g writing/orally/conduct and EE has to be aware of the communication which is a question of fact.
 For employment tribunal to apply objective powers of observation to ascertain intention of ER (coz sometimes words uttered in anger and no real intention to dismiss).
What is the situation if the employer unilaterally imposes radically different terms of employment? Does this constitute a dismissal under s. 95(1)(a) or does it constitute merely a repudiatory breach which, if accepted by the employee, constitutes constructive dismissal under s.95(1)(c):
 Dismissal where ER alters terms of EE's contract of employment and EE continued to work in accordaince with the modifications imposed:
Hogg v Dover College [1990]
FACT  Teacher received letter from ERs saying he'd no longer be head of dept, he'd only be employed part time
S
and his pay would be halved.
 He stood and sued (carried on working but also claimed unfair dismissal).
HELD  EAT held that this was a termination (dismissal) and re-engagement. As a matter of law+ common sense his former contract had gone.
Alcan Extrusions v. Yates [1996]-distinction b/w significant departure from terms of EEs existing contract [termination of existing contract] and a variation of an existing contract of employment
FACT  ER moved from 37hr a week system to part time system, depriving EE of benefits (overtime payments)
S
and still required them to work weekend/bank holidays.
 Yates said changed amounted to dismissal and he'd work new system under protest reserving his rights to claim UD.
HELD  Held there was a dismissal under s95(1)(a) - substantial departures by ER from terms of existing contract can be substantial as to amount to the withdrawal of the whole contract. Thus, EE is entitled to remain in position whilst making a claim (as dismissal is terminating contract of employment rather than the employment relationship)
 The new terms were so radically diff , they were removal of old contract and offer by substitution of a new and substantially inferior contract.
Difficulty for an employment tribunal is how it ought to distinguish between a modification/termination?
Robinson v. Tescom Corporation UKEAT/0567/07,
EAT held that an EE who agreed to work under new terms of employment under protest (that is, to "stand and sue")
but subsequently insisted on working on his old terms of employment, had not been unfairly dismissed.
Having agreed to work under the new terms, the employee could not subsequently refuse to do so. The employer's decision to dismiss him in these circumstances was within the band of reasonable responses (see below).
o Not a stand and sue situation as agreed to new terms, then tried to revert to the old. Needed to say wasn't accepting the new terms and sue in respect of the dismissal.

Note, notion of 'self-dismissal' by EE has been rejected by the courts in London Transport Executive v Clarke
[1981]
o Ie, EE asks to go away on unpaid leave, ER says no, ER goes away (so EE repudiates), then letter of ER comes saying contract is terminated but EE away so doesn't see it not possible to say that employee has self-dismissed so that he cannot claim for unfair dismissal.
Where EE resigns and has been obtained by undue pressure, deception or pursuant to a threat or ultimatum, courts use purposive interpretation of s95(1)(a) ERA and this is considered to have been a dismissal by ER on grounds of a forced resignation.

FACT
S

HELD


Martin v Glynwed Distribution Ltd [1983]
Warehouse manager told there would be inquiry into incident where employee drove minibus and damaged cars. EE was told by ER that inquiry would probably result in dismissal and it would be within his best interests to resign so he did.
Key question: 'who really terminated the contract of employment'.
Here, ER treated as dismissing EE notwithstanding that it was EE who terminated the contract.

Haseltine Lake v Dowler (1981)
Is threat of future dismissal enough that resignation by EE is actually dismissal by ER under s95(1)(a) ERA?

FACT
S
HELD

No, by simply expressing desire/intention to terminate contract in future, ER hasn't 'constructively'
terminated. Contract of employment isn't an agreement for 'perpetual servitude from which neither master nor servant can esacpe w/o committing a breach'- termination in accordance w agreed terms doesn't constitute a breach.

 S.95(2) ERA lays down circumstances in which an employee is dismissed.
S95 (2) ERA
Employee taken to be dismissed by his employer if a) ER gives notice to EE to terminate his contract of employment and b) At a time within the period of that notice the employee gives notice to the employer to terminate the contract 

of employment on a date earlier than the date on which employer's notice is due to expire and the reason for dismissal is taken to be the reason for why the employer's notice is given.-This is a counter-notice of 'early termination'
EE's counter-notice doesn't need to be a particular length as long as it's after service of ER's notice but before he expiry of the prescribed period.
- If length of notice served by employee is less than period stipulated in contract or statutory minimum
(s.86(2), whichever is higher, he/she will be in breach of contract and liable to pay employer in damages.

Termination of a limited-term contract of employment by employer (s.95(1)(b) ERA)
 Where employee under a limited term contract and that contract terminates by virtue of the limiting event without being renewed under the same contract; this constitutes dismissal. The following types of contracts are covered and unfair dismissal claim can be brought.
S235 ERA definitions which s95(1)(b) covers:
- fixed term
- completion of performance of a specific task
- Contract providing for termination on occurrence of an event and the event occurs. occurrence of event when it happens
NB: LTC is deemed to be 'permanent' on the first renewal if the employee has four years' continuity and there is no objective reason for not granting permanent status: Reg. 8 SI 2002/2034 The Fixed Term Work (Prevention of Less Favourable Treatment) Regulations 2002.
- Dixon v BBC [1979] - Lord Denning held that 'fixed term' must include fixed/limited term contracts that can still be determinable by notice within their terms. So even with a notice provision, on the expiry of the term can still claim dismissed under s.95(1)(b) ERA.
Termination of a contract of employment by the employee (s.95(1)(c) ERA)
 Called 'constructive dismissal' because ER has not actively terminated the contract, instead the employee treats conduct of employer as being so serious (ER committed a repudiatory breach of employment not in accordance with test of reasonable conduct by employer) that it confers an entitlement to walk away from contract.

FACT
S

HELD


FACT
S

HELD


Western Excavating (ECC) Ltd. v. Sharp [1978]
Sharp requested 3hrs off work- this was refused but he did it anyway. Next day was dismissed but disciplinary panel substituted 5 days suspension w/o pay. He was in financial difficulty so asked for advance on holiday pay which was refused and left employment again.
Was ERs conduct a repudiatory breach of contract?
No: 'Repudiatory breach of contract is a significant breach going to the root of the contract or conduct which shows the employer no longer intends to be bound by one or more of the essential terms of the contract…Conduct must be sufficient serious to entitle him to leave at once…. he must make up his mind soon after conduct of which he complains….for it he continues for any length of time without leaving, he will lose his right to treat himself as discharge…he will have elected to affirm the contract'.
Denning affirms the contract test: there must be a fundamental breach of an express or implied term of employment contract by ER that court considers sufficiently serious (not just a breach but a
REPUDIATORY BREACH) to constitute a constructive dismissal
Buckland v Bournemouth University Higher Education Corporation [2010]
Buckland was chair of a subject at uni. 14 of 16 students who took exams failed, results confirmed by 2nd marker. Inquiry as to why the results were what they were and Buckland was forced out the door and resigned.
Test for breach is objective- breach occurs when the proscribed conduct place.
Can a repudiatory breach be cured before acceptance?
- No it cannot - although aware of the injustice that may cause in some cases where the employer says something in haste and then wishes to go back on it, such a rule would have to be applied to contracts at large and it may not be appropriate outside of the employment context.
Reasonableness cannot be a legal requirement. Eg, clear fundamental breach = failure to pay wages. If the failure is due to customer defaulting on payment, not paying the staff's wages is arguably the most, indeed the only, reasonable response to the situation. But to hold that it is not a fundamental breach would drive a coach through the law of contract.
So if ER's conduct constitutes repudiatory breach of contract, elective approach applies so EE has an option to:

1. Accept repudiation, walk away and claim constructive dismissal under s95(1)(c) ERA or

2. Affirm the contract so employment continues.
So the steps are:
Brown v Merchant Ferries Ltd (1998)
Employee must show:

1. A breach of contract (actual, or anticipatory Financial Techniques Planning Hughes [1981]) by the employer of an express term or an implied term, usually mutual trust and confidence;

2. The breach must be sufficiently important to justify the employee in resigning or possibly, it must be the last in a series of breaches: Lewis v. Motorworld Garages [1985];

3. The employee must leave in response to the breach and not in connection with some other reason;
- Causation: was E's departure caused by ER's conduct?

4. The employee must not delay too long in terminating the contract in response to the employer's breach (Western
Excavating v Sharp) otherwise he may be deemed to have waived the breach and agreed to vary the contract
(but see Waltons & Morse v. Dorrington [1997] IRLR 488 and Jones v. F.Sirl [1997] IRLR 493).

Sothern v Franks Charlsely- tribunals caution statements made in heat of momentcourts apply cautious approach when determining whether employee has resigned.
Repudiatory breach need not be the principal reason for employee's resignation for constructive dismissal.
- Sufficient if employers conduct played a part- examples include
 ER's failure to investigate complaints of sexual assault (Bracebridge Engineering v Darby),
 Failure of ER to deal w EE's complaints about cigarette smoke exposure in workplace (Waltons &
Morse v Dorrington),
 Failing to provide EE with suitable eye protectors to perform his work (British Aircraft v Austin).

Last straw cases: where EE claims constructive dismissal following a series of acts by ER including a previously affirmed repudiatory breach of contract. The isolated last event isn't sufficiently serious to amount to breach of contract but cumulatively the conduct may amount to constructive dismissal (and the last straw doesn't need to be same character as the earlier acts):
Kaur v Leeds Teaching Hospitals NHS Trust (2018) COA
In the normal case where an employee claims to have been constructively dismissed it is sufficient for a tribunal to ask itself the following questions:
(1) What was the most recent act (or omission) on the part of the employer which the employee says caused, or triggered, his or her resignation?
(2) Has he or she affirmed the contract since that act?
(3) If not, was that act (or omission) by itself a repudiatory breach of contract?
(4) If not, was it nevertheless a part … of a course of conduct comprising several acts and omissions which, viewed cumulatively, amounted to a (repudiatory) breach of the Malik term [implied duty of trust+ confidence]? (If it was,
there is no need for any separate consideration of a possible previous affirmation …)
(5) Did the employee resign in response (or partly in response) to that breach?"

On the facts, there was no 'last straw' as the employer's disciplinary process was perfectly proper, so the tribunal was entitled to dismiss the case.

Applying elective theory: if you go to work the next day have you affirmed the contract? (WE Cox Toner v
Crook)

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