Compensation for wrongful dismissal is usually limited to the payments that would have fallen due
to the employee during the notice period. However in some cases in it possible to add to this sums to compensate for: a) loss of fringe benefits (i.e. company car, medical insurance
etc)
b) commission and bonus payments due under
contractual schemes c) and payments under profit sharing schemes d) loss of pension contributions e) back pay and holiday pay f) share options In some circumstances a wrongful dismissal claim can be brought where the dismissal was in breach of contractually
binding disciplinary rules and procedures. In these cases damages may be calculated by reference to how long it would have taken to comply with the contractual procedure in
addition to the notice period.
2. Unfair Dismissal
Unfair dismissal claims can only be brought in the Employment Tribunal and make up a substantial
proportion of the cases heard there. Many claims are settled without the need to go to a hearing. Claims must be presented to (i.e. actually received at) the Employment Tribunal within three months of
the effective date of termination of employment. These time limits are strictly enforced and therefore if you miss the deadline the Employment Tribunal may refuse to hear your
case. In order to succeed in a claim for unfair dismissal a tribunal must be satisfied that:
a) you qualify for the right to claim unfair dismissal;
b) you have been
dismissed; c) your employer did not have a
fair reason for the
dismissal; or
d) if there was a
fair reason
it was not
implemented fairly or the penalty was too harsh
3. Do you qualify for the right not to be unfairly dismissed?
In order to qualify for the right to claim unfair dismissal you must: a) be an employee (i.e. as opposed to self employed) and; b) have been dismissed (perhaps surprisingly this can include situations where you have resigned); c) have been continuously employed least one year
NB: if you have been dismissed for one of the following reasons the one year rule may be waived:
-
asserting a statutory right
-
trade union activities or membership
-
pregnancy, childbirth, maternity, maternity leave, parental leave or taking time
off to care for dependants
-
matters relating to health and safety
-
for certain betting and shop workers, refusing to work on
Sundays
-
whistleblowing under the Public Interest Disclosure Act 1998.
(What is more, dismissals for these
reasons are usually deemed to be automatically unfair.) d) Be under either the normal retiring age for your industry or in any other case under the age of 65 and; e) Not fall within a miscellaneous excluded category. We can offer you advice on establishing your eligibility for unfair dismissal and explain the requirements in full.
4. Have you been
dismissed?
In most cases it will be clear whether
or not you have been dismissed. However,
dismissal is a technical term and, in addition to
express dismissals can include cases where: a) an employee resigns because of a serious
breach of contract by their employer (i.e. constructive dismissal b) where the employer says
resign or be
dismissed c) where a fixed term contract is not renewed d) where the employer uses language which
amounts to dismissal
5. Fair reasons for dismissal and fairness
There are five potentially fair reasons
why an employer can dismiss an employee.
The five fair reasons are: a) Capability b) Conduct c) Redundancy d) To avoid contravening a statutory provision e) Some other substantial reason If your employer fails to satisfy the Employment Tribunal that one of the five reasons applies in your case then your claim will
succeed.
a) Capability
These dismissals tend to fall into three
categories:
(i)
Lack of appropriate qualifications that
are a condition of your employment. For example if you are disqualified from driving when having a driving licence is a necessary requirement for your job. However this will
only usually merit dismissal if the license is genuinely vital to the job and the employer has considered alternative arrangements or alternative positions. (ii)
Lack of competence. It is rare for
one-off incidents to justify dismissal unless they cause the employer a significant detriment or loss. Examples of incompetence would include making misjudgments or
mistakes, lack of adaptability, inability to work with colleagues etc In assessing the fairness of a dismissal on these grounds an Employment Tribunal may consider:
-
whether there is objective evidence of incapability
-
whether there was a proper appraisal system or some other formal process of
supervision through which the employee could know of their employers concerns
-
whether warnings were given setting out reasonable objectives and which
made clear the consequences of failing to improve
-
what alternatives to dismissal were considered i.e. retraining or transfer
to another post
-
whether due consideration was given to the employees status, length of
service and past performance
-
how similar issues have been dealt with in the past
(i)
ill health.
Employers who treat ill
health absence as a
capability issue do probably not doubt that the reason for absence is genuine; they may simply be concerned that the employee is incapable of attending
regularly enough to comply with the contract. This may encompass either long term or persistent short-term absence from work. Cases where an employer suspects an employee of
malingering will probably be dealt with as a conduct issue. In assessing the fairness of a dismissal for ill health an Employment Tribunal may consider:
Whether the employer has investigated the nature of the illness and the likely length of absence The impact that the
employees absence has on the business and other employees Whether the employer has taken account of available medical evidence, the
employees length of service and any contractual sick
pay scheme Whether the employer has consulted with the employee about the situation before taking a decision to dismiss
Whether alternatives to dismissal have been considered.
Employees who are dismissed on the grounds of ill health may also have the right to bring a claim
under the Disability Discrimination Act 1995. This legislation imposes a duty on employers to make
reasonable adjustments to prevent a disabled person from being
placed at a substantial disadvantage compared with others.
b) Conduct
Perhaps the most contentious cases are those where an employee has been dismissed for misconduct,
whether it is a one off incident or the culmination of a series of incidents. Examples of conduct that might be relied upon to justify dismissal are: (i) Disobedience (ii) Insubordination (iii) Threatening or abusive language
(iv) Assault
(v) Harassment
(vi) Theft or fraud
(vii) Being under the influence
of drink or drugs in the workplace Often employers will set out examples of the type of misconduct that might result in dismissal in
their disciplinary procedures. In assessing the fairness of a conduct dismissal an employment tribunal may consider:
did the employer genuinely believe that the employee was guilty of the offence? were there reasonable grounds for holding that belief following a reasonable investigation? was there a proper and fair disciplinary hearing? did the employer have sufficient regard to the
employees disciplinary record and length of service?
has the employer been consistent in how it has dealt with genuinely similar cases in the past? were alternatives to dismissal considered? was dismissal within a
reasonable range of responses to the misconduct complained of or was it too harsh?
c) Redundancy
In
general terms there are four main situations which will constitute a redundancy:
(i)
Your employer is closing down the undertaking entirely; or
(ii)
The employer is closing down the particular part of the undertaking in which you are employed; or
(iii)
Your employer doing away altogether with the work that you are employed to do such that the job disappears in
entirety; or
(iv)
Your employer is reducing the number of people doing the work that you are employed to do
If
you are made redundant then technically you will have been
dismissed by reason of redundancy. It follows that an unfair redundancy comes under the category of
unfair dismissal.
Even in cases where there is a genuine redundancy an employment tribunal might still find that you have been
unfairly dismissed if:
(i)
you have been unfairly selected for redundancy (particularly if the selection criteria were not objectively
justifiable and were applied inconsistently)
(ii)
there was been a failure to take proper individual and/or collective consultation before final decisions were
taken
(iii)
if there was a failure to take adequate steps to consider whether suitable alternative employment is available
d) To avoid contravening a statutory provision
In rare circumstances it might not be possible to continue to employ somebody without breaking the law.
This can be a fair reason for dismissal. However an employer should still consult fully with the employee before
deciding to dismiss. For example it might be that arrangements can be put in places that overcome the difficulty.
e) Some other substantial reason
The final category is where the dismissal is for
some other substantial reason such as to justify the dismissal
of an employee holding the position which the employee
held. This is something of a
catch-all provision.
Examples are:
(i)
Business re-organisation falling short of redundancy
(ii)
The need to impose a restraint of trade clause
(iii)
The need to impose a change in terms and conditions of employment
Remedies for unfair dismissal
If you win a claim of unfair dismissal, the employment tribunal will usually make an award of compensation or make an order for re-instatement or re-engagement.
Compensation There are two main elements to compensation for unfair dismissal called the
basic award and compensatory award.
In very simple terms, the basic award is roughly equivalent to a statutory redundancy payment and is calculated by reference to an
employees age, length of service
and rate of pay.
The compensatory award is generally broken down as follows:
a)
Immediate loss of earnings for the period from the date of dismissal to the date of the Employment tribunal
hearing.
b)
Future loss of earnings
c)
Loss of fringe benefits
d)
Loss of statutory employment rights
However, there are a huge number of other factors to take into account. Ultimately the amount of compensation awarded is at the Employment
Tribunals discretion and
is judged broadly by reference to what the tribunal considers is
just and equitable.
We can provide you with expert advice as to whether or not you have a claim and, if so, how much it might be worth.
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