C1: Grounds for Dismissal

Termination of Employment

Resource type: Chapter

Status: Published on 01-Dec-2012

Jurisdiction: United Kingdom

This chapter is from Termination of Employment (Bloomsbury Professional), which is a looseleaf service written by employment law experts as a practical guide for use by human resource professional and legal professionals advising them. The work offers a thorough grounding in the law, plus practical advice and guidance. The book provides the employer with a framework for maintaining best practice when dealing with employment termination issues, so as to avoid cases being taken to employment tribunals, but also offers advice and guidance on how to win cases that do end up in tribunal. It contains information to help you deal successfully with issues and situations relating to the termination of a contract or the removal of an employee.

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Julian Yew

Part I. C: Grounds & Procedures

C1: Grounds for Dismissal

Table of Contents

Establishing the Reason for Dismissal

[C1.1]

The employer needs to be clear of the grounds for dismissal before taking any decision to dismiss an employee. An employee with one year's continuous employment is entitled to a written statement giving the reason for the dismissal.¹ This right only arises if the employee actually requests reasons.² The only exception to this is if an employee is dismissed while she is pregnant or on maternity leave, in which case she is automatically entitled to be given reasons.³ If the employer fails to give written reasons, the employee can make a complaint to the employment tribunal seeking a declaration as to reasons for dismissal and an award of two weeks' pay.

¹ ERA 1996, s 92. The previous two year limit was reduced with effect from 1 June 1999 by virtue of the Unfair Dismissal and Statement of Reasons for Dismissal (Variation of Qualifying Period) Order 1999 (SI 1999 No 1436).

² ERA 1996, s 92(2).

³ ERA 1996, s 92(4).

An employee with one or more years' continuous employment (see [D3.14] below) at the effective date of termination (see [A2.5] above) has the right to claim unfair dismissal before an employment tribunal.

In order to defend an unfair dismissal claim, an employer must show that it has one of six potentially fair reasons for the dismissal:

a reason related to capability;
a reason related to conduct;
redundancy;
that there is a statutory restriction preventing the employment from continuing;
'some other substantial reason';¹
retirement at or after the default retirement age (DRA) of 65,² or at a normal retirement age lower than the default age if it is lawful for the employer to have such a retirement age, provided that the correct procedure has been followed and the employment terminates on the intended date and any compulsory retirement age can be objectively justified.³

¹ ERA 1996, s 98(1) and (2).

² The DRA is currently being phased out, along with the procedure requiring employers to consider applications from employees wishing to work beyond 65. Phasing out began on 6 April 2011 with employers no longer being able to issue a compulsory retirement notification under the DRA procedure set out in the Employment Equality (Age) Regulations 2006 (SI 2006 No 1031). It will be completely abolished by October 2011. Those employers who continue to have a compulsory retirement age despite the abolition of the DRA will need to be able to objectively justify this.

³ ERA 1996, ss 98(2), 98ZB and 98ZD.

In some cases, an employer may have more than one reason for dismissal. If the employer is relying on more than one reason, it will need to carry out the necessary investigation for each reason and give the employee full opportunity to defend him/herself in relation to each. The employer must be able to show the principal reason for dismissal.¹

¹ ERA 1996, s 98(1).

An employee's contract of employment may entitle the employer to dismiss summarily (see [A2.14] above) for particular reasons. However, the terms of the contract or disciplinary procedures may require certain steps to be taken before any decision to dismiss is implemented.

Although this chapter deals primarily with the reason for a dismissal, it is important to remember that it is not sufficient to have a fair reason if the employer fails to act fairly and reasonably in the procedures followed prior to and after taking the decision to dismiss.

In many cases, the facts of the matter are in dispute, particularly where the employee denies the conduct in question. The employer will then need to investigate the situation. Guidelines have been set as to what an employer needs to do in carrying out an investigation. This guidance was set out in the case of British Home Stores v Burchell Ltd¹. (See also[C2.22] below). This is one of the most frequently referred to cases in the employment tribunal. When conducting an investigation:

the employer must establish a belief that the employee committed the act in question;
that belief must be based on reasonable grounds; and
the grounds should be established by as much investigation into the matter as was reasonable in the circumstances.

¹ [1980] ICR 303.

This is likely to mean that the employer must interview all witnesses and inform the employee prior to any disciplinary hearing of what has been said about him/her so that he/she can defend his/her position. See 2: proceduresC.

Key Points to Remember

[C1.2]

Before dismissing an employee, the employer needs to be sure that it has grounds for the dismissal falling within one of the six potentially fair reasons set out in ERA 1996, s 98(1) and (2).

The employee has the right to be given written reasons for dismissal on request, provided he/she has one year's continuous employment with that employer.

An employee dismissed by reason of pregnancy or maternity is entitled to written reasons automatically and does not, therefore, need to have one year's continuous service or request the written reasons.

Where the facts are in dispute, an employer should carry out an investigation into whether an employee should be dismissed ensuring that it follows the guidelines in the Burchell case.

Poor Performance

[C1.3]

Performance issues are some of the most difficult issues to deal with fairly. In most cases, they consist of continuing under-achievement or poor performance. Exceptionally, the issue can consist of one extreme or negligent incident that has such disastrous or potentially disastrous consequences that it would be considered fair to dismiss as a result of that one single incident (see further [C1.7] below).

A dismissal for a reason of poor performance will, in most cases, be for a reason of capability and, in exceptional cases, one of conduct.

Continuing Poor Performance

[C1.4]

Generally, it will be impossible for an employer to dismiss fairly for an act of poor performance without having first warned the employee that an improvement is required, perhaps by way of a performance review. Employees should be warned of the consequences of there being no improvement and given a reasonable opportunity to improve.

In the case of Davison v Kent Meters Ltd¹, Mrs Davison was given one month's notice after discovery that, out of 500 components assembled by her, some 471 were faulty due to the fact that she had assembled them incorrectly. In her defence, she stated that she had assembled them as instructed by the foreman. The foreman denied this and she was dismissed.

The tribunal held that it was unreasonable to dismiss her without having warned her formally that, unless her performance improved, she would be dismissed. It further found that the foreman should have supervised her properly to correct the way in which she was operating. Therefore, employers should consider whether they have been partly at fault in failing to supervise or train adequately.²

¹ [1975] IRLR 145.

² See also the case of Associated Tyre Specialists (Eastern) Ltd v Waterhouse [1976] IRLR 386.

Giving employees warnings and providing them with an opportunity to improve is very important in ensuring a fair procedure is followed. The ACAS Code of Practice No 1 on Discipline and Grievance Procedures (the 'ACAS Code') gives practical guidance on how to handle disciplinary and grievance issues fairly. The ACAS Code came into force on 6 April 2009 following the repeal of the statutory disciplinary and grievance procedures. Prior to 6 April 2009, a failure to follow the minimum statutory disciplinary and grievance procedures resulted in an automatic finding of unfair dismissal. While there can be no automatic finding of unfair dismissal for a failure to follow the ACAS Code, tribunals do have to take the ACAS Code into account and can increase compensation by up to 25% for an unreasonable failure to follow its provisions. However, the tribunal can also decrease an employee's compensation by up to 25% if they unreasonably fail to comply with the ACAS Code.

Following the repeal of the statutory disciplinary and grievance procedures, the Polkey¹ principle has gained in importance. Polkey allows, in cases of unfair dismissal, for the reduction of an employee's compensation by an appropriate percentage where an employer has not followed a full and fair procedure, but the tribunal considers that had such a full and fair procedure been followed, there was a chance that the employee would have been dismissed in any event.

¹ Polkey v A E Dayton Services Ltd [1988] ICR 142. See also [C2.4] below.

Fall off in trade or failure to meet specified targets may amount to a reason for dismissal, provided it can be reasonably concluded that the employee is responsible.¹

¹ Cook v Thomas Linnell & Sons [1977] IRLR 132.

Employees have been unfairly dismissed for lacking management ability for example, the case of Woods v Olympic Aluminium Company Ltd.¹ Crucially, however, Mr Woods was not actually employed in a managerial capacity.

¹ [1975] IRLR 356.

The leading case of Taylor v Alidair Ltd¹ held that the employer must show that he honestly and reasonably believed that the employee was performing poorly and was not capable of fulfilling the particular role for which he was employed. However, the employer does not have to prove that the employee was actually incapable.

¹ [1978] IRLR 82, [1978] ICR 445.

For a full discussion of the procedural steps to be taken in a situation of gross negligence, see [C2.20] below.

Following Procedure Versus a Quick Decision

[C1.5]

In many cases, an employer will not believe that any real benefit will be obtained by allowing the employee to go through a prolonged procedure as, in the employer's view, the employee is either not capable or not willing to improve. The employer will then need to consider whether a speedy, but probably unfair, dismissal is commercially sensible even if it means that they have to settle a claim brought by the dismissed employee. To weigh against this, they need to consider the effect on staff morale of failing to follow procedures set out in the employees' contracts of employment or staff handbook.

If the employer decides to dismiss the employee without first following the procedures, it is possible to reach a settlement with the dismissed employee before any proceedings are brought. This is usually done by entering into a Compromise Agreement (see further [D4.14] below).

Previously, a further reason for employers to follow their contractual disciplinary procedure was the case of Raspin v United News Shops Ltd.¹ This case was heard when employees were still required to have two years' continuous service to be able to bring an unfair dismissal claim. Ms Raspin was employed from 16 May 1994 until she was dismissed on 27 April 1996. The reason for her dismissal was the employer's suspicion that she had stolen money. The tribunal, in considering her claim for breach of contract, found that if the employers had followed their own contractual disciplinary procedure, she would not have been dismissed before 15 May 1996. Accordingly, she would have been entitled to bring a claim of unfair dismissal. The case was resubmitted to the employment tribunal to consider what compensation she would have been awarded had she brought a claim for unfair dismissal. However, the decision in Virgin Net Ltd v Harper² has since held that it is not possible for an employee to claim loss of the right to bring an unfair dismissal claim as a head of damages in a breach of contract claim.

¹ [1999] IRLR 9.

² [2003] IRLR 831. See also Wise Group v Mitchell [2005] ICR 896.

Key Points to Remember

[C1.6]

Dismissals for performance-related reasons are usually due to under-achievement or poor performance.

Before dismissing for poor performance, the employer should have issued warnings to the employee in accordance with the employer's disciplinary procedure that an improvement was required.

A dismissal for performance may be unfair if the employer does not provide adequate training or support, and allow the employee a reasonable opportunity to improve.

Gross Misconduct and Gross Negligence

[C1.7]

One act of serious misconduct or negligence may be sufficient grounds to dismiss an employee.

Gross Misconduct

[C1.8]

For there to be gross misconduct, the act of misconduct must be sufficiently serious to show that the employee is repudiating the contract or deliberately disregarding one or more of the essential conditions of the contract.¹

¹ Laws v London Chronicle (Indicator Newspapers) Limited [1959] 1 WLR 698 (CA).

It is normally only very serious offences such as physical violence, theft or fraud that will fall within this category. However, what constitutes gross misconduct may be determined by the nature of the business or other circumstances.

The following are examples of conduct which has been regarded as gross misconduct.

Dishonesty and theft.¹
Fighting at the workplace.²
Falsification of company documents (such as time sheets).
Vandalism.³
Harassment.
Serious breaches of safety rules.
Drug use.⁴
Deliberate unauthorised use of or tampering with a computer.⁵
Competition or conflict of interest with the employer. In this regard, the following have been held to be gross misconduct:
- forming a company with another employee and taking steps to purchase some shops the employers wished to sell without disclosing the conflict to the employer;⁶
- tendering for the employer's business;⁷
- conspiring to take away the employer's clients or employees;⁸ and
- taking a secret commission.⁹
  
  However, steps taken by an employee during employment preparatory to competition after the employment has ended will generally not be a breach of contract. In Laughton and Hawley v Bapp Industrial Suppliers Limited¹⁰ setting up a company through which the employee intended to compete after the employment ended and contacting suppliers was not a breach of contract. Seeking employment with a rival company to commence after the employment has ended is permissible.¹¹

¹ Sainsburys Supermarkets Ltd v Hitt [2003] IRLR 23.

² Eg C A Parson & Co Limited v McLoughlin [1978] IRLR 65 (EAT).

³ Eg Lalji v Vauxhall Motors Limited (EAT 1025/94) – serious damage caused to cars at work.

⁴ Eg Roberts v British Railways Board (EAT 648/96) – summary dismissal held fair where a British Rail employee tested positive on a random drug test authorised by his contract.

⁵ In Denco Limited v Joinson [1991] IRLR 63; [1991] ICR 172 (EAT) the tribunal noted that unauthorised use of a computer containing sensitive information is a serious industrial offence and as such merited summary dismissal even if the employee acted out of idle curiosity.

⁶ JH Dewhurst Limited v Jack (EAT 8/94).

⁷ Adamson v B and L Cleaning Services Limited [1995] IRLR 193.

⁸ Marshall v Industrial Systems and Control Limited [1992] IRLR 294 (EAT).

⁹ Boston Deep Sea Fishing and Ice Company v Ansell (1888) 39 Ch D 339 (CA).

¹⁰ [1986] IRLR 245.

¹¹ Harris & Russell Limited v PSG Slingsby [1973] ICR 454 (NIRC).

Gross Negligence as Gross Misconduct

[C1.9]

Since gross misconduct must involve the deliberate disregarding of an essential condition of the contract, it might seem difficult for negligence to constitute gross misconduct. It is, however, clear that gross negligence can in some circumstances be gross misconduct.

Consequently, one act of serious incompetence may enable the employer to dismiss fairly without prior warning. For example, dismissals for incidents that could have resulted in serious physical injury have been held to be fair. For example, where a pilot had made a faulty landing, it was obvious that the negligent act could have had disastrous consequences.¹ This would be sufficient to breach the trust and confidence (see further [C1.90] below) between the employer and the employee, and could even be treated as misconduct. The employer's disciplinary procedure may well list serious incompetence and negligence as an example of misconduct or gross misconduct.

¹ Taylor v Alidair Ltd [1978] IRLR 82; [1978] ICR 146.

While gross negligence can constitute gross misconduct, in some cases there has been a reluctance to reach this conclusion. In Dietman v Brent LBC,¹ for example, it was recognised that gross negligence, in the sense of a really serious failure to achieve the standard of skill and care to be expected, could be gross misconduct. However, the Court was clearly reluctant to find that there could be gross misconduct in the absence of deliberate or intentional wrongdoing. In that case, the examples of gross misconduct in the disciplinary procedure all included deliberate wrongdoing. Although the list was not exclusive, it was held that other types of misconduct should be analogous and therefore involve deliberate wrongdoing. As such, notwithstanding that a social worker had been found to be guilty of gross negligence, this was held not to constitute gross misconduct.

¹ [1987] IRLR 259.

In the case of Meiszner v Hart Timber Preservation Ltd,¹ the EAT held that the summary dismissal of Mr Meiszner for producing one shoddy piece of work after receiving only one other warning in six years' service was not justified. The EAT went on to say that no employer should dismiss an employee summarily unless there was a breach by the employee that went to the root of the contract.

¹ (EAT 691/97).

Nevertheless, it is not necessary for gross negligence to cause physical or serious harm before a dismissal without warning for gross negligence may be held to be fair. In London Borough of Hackney v Benn,¹ the employee was accused of gross errors of judgement and gross negligence in the way she managed her department's budget. She was further accused of failing to provide leadership. The employer's disciplinary procedures dealt with negligence as a matter of misconduct. The employer treated this gross negligence as gross misconduct and dismissed the employee without any prior warning that her performance was inadequate. The dismissal was held to be fair.

¹ 1996, CA, unreported.

This is an unusual case and should not be seen as establishing a general principle that employers are entitled to treat poor performance as gross misconduct and, therefore, dismiss without warning (although this may be an option to consider where the failings in performance are particularly grave).

It may be possible in such a case to dismiss summarily (ie without notice or pay in lieu of notice) if the terms of the employee's individual contract of employment or the employer's disciplinary procedures lists examples of when summary dismissal may occur – it will assist the employer if gross negligence is included in the list to decide whether the action of the employee constitutes a repudiatory breach.

Cumulative Misconduct as Gross Misconduct

[C1.10]

Even though the final act leading to dismissal might not constitute gross misconduct of itself, there may be cumulative bad conduct such that the last act can be regarded as the last straw. In Pepper v Webb,¹ a gardener told his employer:

'I couldn't care less about your bloody greenhouse or your sodding garden'.

It was argued that one act of temper and insolent outburst did not justify dismissal without notice. This was rejected on the basis that the act was the last straw against a background of persistent insolence.

¹ [1969] 1 WLR 514.

Weight to be Given to Mitigating Circumstances

[C1.11]

The facts of each case, together with any extenuating circumstances, need to be considered in order to ascertain whether the conduct was sufficiently serious. On this basis, conduct which might, in some cases, be less serious might constitute gross misconduct in the context of the particular employment. In Iredale v Huddersfield Health Authority,¹ for example, a nursing assistant slapped a patient in her care. The dismissal was held to be fair having regard to the entitlement of employers responsible for vulnerable patients to protect them from the merest hint of abuse.

¹ EAT 377/90.

Equally, the particular circumstances may militate against a finding of gross misconduct. In Laws v London Chronicle (Indicator Newspapers) Limited¹ the employee's supervisor had an altercation with the employer's chairman and managing director. The immediate supervisor left the meeting and invited the employee to come with him. The employee left, despite being told to stay by the chairman and managing director. The Court of Appeal held that an act of disobedience did not have to be 'grave and serious' but did have to be wilful or deliberate. In this case, however, the disobedience did not justify summary dismissal. The employee had been put in an embarrassing position and her conduct was not in deliberate disregard for her conditions of service.

¹ [1959] 1 WLR 698 (CA).

In Wilson v Racher¹ a gardener swore at his employer in the presence of the employer's family but he was goaded into doing so by a series of unjustified criticisms by the employer. Further, the gardener had tried to walk away before the worst of his outbursts and had been called back. The Court also found that the gardener had been efficient at his job and there had been no further example of insolence. As such, although the gardener was in breach of the duty of courtesy to the employer, in the circumstances he could not be regarded as deliberately flouting the essential conditions of his employment and had been wrongfully dismissed without notice.

¹ [1974] ICR 428 (CA).

Partly due to the need to focus on the individual circumstances, there is some danger in relying heavily on previous case law. What may have been serious in one business may be less important in another. Further, as employment relations change, so there may be a change in the seriousness attached to certain forms of misconduct such as disobeying a lawful order.

Relationship Between Express Terms of Disciplinary Rules and Gross Misconduct

[C1.12]

If an employer wishes to treat misconduct as being gross misconduct, it may be assisted if the conduct is identified as such in the disciplinary rules or in a notice to employees.

In Dairy Produce Packers Limited v Beverstock,¹ an employee was summarily dismissed for drinking at a pub during working hours. In finding that the dismissal was unfair, the EAT noted that a reasonable employer might impose differing standards in relation to drinking alcohol, dependant on factors such as the nature of the business, the extent to which other personnel might be put at risk and the effect this conduct might have on public opinion. However, where there were special circumstances making drinking alcohol, either in general or off the premises, especially serious and liable to result in dismissal, the EAT considered that this should be specifically laid down and made a term of the contract of employment.

¹ [1981] IRLR 265 (EAT).

If the rules or the notice are sufficiently clear, this may take the place of a substitute warning. In Dalton v Burton's Gold Medal Biscuits Limited¹ an employee was dismissed for clocking-in another employee. He provided an explanation for this to the effect that the other employee had merely been to collect some belongings and that there was, therefore, no intention to defraud the employer. However, there had been a previous notice to all staff that clocking-in another employee would result in instant dismissal. On that basis, even though there was no intention to defraud, the employer had been entitled to dismiss without notice.

¹ [1974] IRLR 45 (NIRC).

However, at least in the context of unfair dismissal, tribunals have been reluctant to find that conduct which would not ordinarily be gross misconduct can justify unfair dismissal. In order to have this effect, it may be necessary for disciplinary rules to provide that misconduct will (rather than may) result in instant dismissal, In any event, for the purposes of unfair dismissal, the tribunal will still have to consider whether the employer acted reasonably in relying on the rule to justify summary dismissal.

In Laws Stores Limited v Oliphant,¹ an employee was dismissed for failing to follow the till procedure. She failed to register the sum of £1.14 in respect of a jar of coffee and did not put the money in her till or offer a receipt. The collectively agreed disciplinary procedure stipulated that failure to follow the till procedure was gross misconduct and would normally result in instant dismissal. The employee was, therefore, dismissed. The dismissal was held to be procedurally unfair because the employee was not given an adequate opportunity to provide an explanation. In addition, it was held that the single lapse on the part of the employee was not sufficiently serious misconduct to justify instant dismissal. In support of this, the EAT noted that the disciplinary procedure provided that gross misconduct will normally result in immediate dismissal and, therefore, allowed an element of discretion.

¹ [1978] IRLR 251 (EAT).

In Riverside Health Authority v Clarke,¹ a nurse with 25 years' service was dismissed for gross misconduct consisting of wilful neglect of duty whilst in charge of a night shift at a hospital. The EAT held that, even if this did constitute gross misconduct, the employer had acted unreasonably in deciding that it had no option but to dismiss and, therefore, failing to consider extenuating circumstances or long service of the employee.

¹ EAT 582/91.

Further, in the unfair dismissal context, if the employer wishes to rely upon the rule as, in effect, a substitute warning, it will be necessary to ensure that employees are made aware of the categories of misconduct considered sufficiently serious to justify summary dismissal.

In Western General Hospitals NHS Trust v Rennie¹ the EAT held that a hospital acted unfairly in dismissing a kitchen assistant with nine years' unblemished service who was about to drink alcohol on duty. The employee knew that this was misconduct but not that her employer's disciplinary policy stated that it warranted summary dismissal.

¹ EAT 10/96.

Offers of Alternative Employment After Gross Misconduct Allegation

[C1.13]

If an employer chooses to offer alternative employment to an employee alleged to have committed gross misconduct, this will not necessarily be inconsistent with a finding that there was gross misconduct (though it may well be a persuasive factor which a tribunal would take into account).

In Hamilton v Argyll & Clyde Health Board,¹ a chief hospital technician was dismissed for failing to carry out an important medical test and destroying documentation regarded as crucial to the patient's medical records. The employee was offered alternative employment. It was held that this was not inconsistent with there being gross misconduct because the misconduct must be considered in relation to both the particular employee and the particular employment.

[1993] IRLR 99.

Key Points to Remember

[C1.14]

An employer may dismiss an employee for a single act of poor performance, without any prior warning, if that act is sufficient to amount to gross misconduct or negligence. This will, however, be a rare occurrence.

An employer can dismiss for gross misconduct (or, more exceptionally, gross negligence) without either notice or pay in lieu (ie summarily – see [A2.14]above).

When considering the fairness of a dismissal for gross misconduct or gross negligence, all mitigating circumstances must be taken into account, including length of service, employment history, damaged caused and likely to be caused, etc.

If the employee's individual contract of employment and the employer's disciplinary procedures include gross misconduct or gross negligence in the list of examples justifying summary dismissal, the employer will have a stronger case for dismissing summarily.

Bad Timekeeping

[C1.15]

A dismissal for bad timekeeping will be a dismissal for conduct.

Different employers will place a different emphasis on timekeeping than others. Whatever standard the employer has must be communicated very clearly to the employees, preferably in a procedure or staff handbook or in the employee's contract of employment.

Consistency is very important in dealing with such issues. It is difficult to justify dismissing one individual for poor timekeeping where another employee with an equally poor record is not even disciplined. It is important, therefore, to ensure that, where there is no central clocking or time recording system, different line managers or section leaders monitor the situation equally stringently if timekeeping is regarded as important.

An employer also needs to decide whether it is a system which is adhered to strictly (although without infringing any statutory protection) or whether certain excuses will mean that the employee is let off (for example, where employees travel to work by public transport which may be running late).

It is unlikely that a one-off incident of being late justifies a formal warning but if it is intended that a warning be given after a few instances of late arrival, someone will need to be noting the incidents of late arrival so that these can be quoted to the employee when a warning is given. Certainly, after a number of incidents of being late and where the employee has received the appropriate number of warnings under the disciplinary procedure if the practice continues and results in dismissal, that dismissal is likely to constitute a fair dismissal for misconduct. The time lapses between incidents will be a factor, however, as will the overall record of the employee – an employee who has had excellent appraisals and has performed well over many years is unlikely to be fairly dismissed based only on rare occasions when he/she was late for work.

Employers always need to be careful to enquire whether there are any mitigating circumstances which caused the lateness.

Where the employee has a physical or mental impairment which means that they are covered by the disability provisions in the Equality Act 2010 (EqA 2010) (see below at[C1.49]), attending work on time may be difficult because public transport is too congested for them to cope or because of the need to attend the doctor's. An employer may be expected to allow the employee some flexibility on a permanent basis (for example, coming in late and working late) provided that the reason for lateness is genuine and related to the disability.

One incident of bad timekeeping can have more severe consequences if an employee is late for a crucial client meeting, for example, and his/her explanation is unsatisfactory. This will carry more weight than being late for a routine day's work.

Pregnant women are legally entitled to be given paid time off to attend ante-natal visits. If a pregnant employee comes in late every day because, for example, of morning sickness, this could give an employer very real difficulties if this creates a serious logistical or organisational problem. Any dismissal that results could be unfair and discriminatory.¹ Therefore, it is important to enquire as to the reason for the lateness even if a fairly strict procedure is applied. Human Resources should make sure that line managers capable of giving a warning without the involvement of the Human Resources department are trained in this regard.

¹ Under ERA 1996, s 99. See [C1.95] below.

Key Points to Remember

[C1.16]

It is very important to deal with persistent lateness consistently. The employer should decide on the seriousness of bad timekeeping in the workplace and treat all employees the same.

The employer should decide which excuses will be acceptable.

Employers should be careful to ensure there are no mitigating circumstances causing the lateness, especially in order to avoid claims under the EqA 2010 or in relation to pregnant employees.

Misconduct and Dishonesty

[C1.17]

A dismissal where an employee has acted dishonestly will be a dismissal for conduct.

Dismissal on Suspicion of Theft

[C1.18]

In some businesses, theft by employees is a widespread problem, particularly where there is a high turnover of low paid staff dealing directly with cash or stock. Such matters are difficult to deal with as it is unlikely that the employer is going to catch the employee red-handed and there is also likely to be more than one employee who is suspected of theft.

The employer is likely to react differently depending on the industry and the level of loss. Where the employer decides that something needs to be done about the problem, he/she will need to investigate the matter thoroughly. The steps outlined in the case of BHS v Burchell (referred to above at [C1.1]) should be followed. That case requires the employer to establish a reasonable belief in the guilt of the employee before dismissing – in a case of theft, for example, it may be impossible to say which of a group of employees is guilty. In a small company it may not be possible to suspend all suspected employees. However, it is preferable to suspend the employees while they are being investigated. The employees should be interviewed separately from each other.

It is possible, following a thorough investigation which did not identify the true culprit, to dismiss all of the potentially guilty employees fairly. In such circumstances it is not necessary to establish a reasonable belief in the guilt of each employee. This principle was established in the case of Monie v Coral Racing Limited.¹ In this case, money disappeared from the employer's safe. The employer could not decide which of two employees who had access to the safe was responsible and therefore they were both dismissed. The dismissal was held to be fair and that where an employer is confronted by major incompetence but is not able to determine which of two or more employees is responsible² or negligent,³ it may be possible to fairly dismiss all those under suspicion. The dismissal in such a case would be for 'some other substantial reason' rather than 'conduct'. For more guidance on the procedures to follow, see [C2.23] below.

¹ [1980] IRLR 464.

² Whitbread & Co plc v Thomas [1988] IRLR 43.

³ McPhiel and McDermott v Wimpey Waste Management Ltd [1981] IRLR 316.

Dishonesty at work may also relate to the false claiming of expenses or overtime. Such matters may be easier to investigate as they can be verified by such matters as receipts and managers' recollection of the level of overtime worked. An employer should have a clear policy stating who should approve expenses and what receipts or other proof is necessary. With regard to overtime, it is sensible to have the manager who authorises the overtime signing any form applying for overtime to be paid.

Dishonesty Outside Work

[C1.19]

Where the act of dishonesty is committed outside work, the employer's reaction will depend on the need for financial trust in the employee. Obviously, most employers would want to be able to trust their employees regardless of the job that they do. However, there are particular jobs where an incident of theft committed outside work would be treated more seriously. These are likely to be jobs where an employee handles money or stock unsupervised. In the case of Moore v C & A Modes,¹ the section leader at the shop was dismissed fairly after being caught shoplifting in another company's shop even though she had 20 years' service with them and was a trusted member of staff.

¹ [1981] IRLR 71.

Where the employee carries out a menial task which does not require the same degree of trust, an employment tribunal might expect the employer to have a policy communicated to employees stating that they will be dismissed for a criminal conviction outside work before upholding such a dismissal as a fair dismissal.

For other examples of misconduct outside work other than dishonesty, see [C1.26] below.

Criminal Charges

[C1.20]

A dismissal for a criminal charge not connected with work will, in most cases, be a dismissal for conduct. In certain occupations, an employee may be statutorily barred from carrying on a particular job if he/she has a criminal conviction (eg a lawyer). Where a criminal conviction results in an employee being sentenced to prison for a lengthy period, the contract of employment may be frustrated (see [B1.28] above) or the employee may be dismissed for 'some other substantial reason'.

A blanket policy of dismissing employees who are convicted of a criminal act without further consultation will likely result in an unfair dismissal.

Criminal Act Committed Outside Work

[C1.21]

A conviction for an act committed outside work should only result in a dismissal where it has some bearing on the employee's work. An employee's contract of employment may specifically state that a criminal conviction will lead to dismissal. However, just because the contract of employment allows the employer to dismiss, this does not eradicate the need to carry out a fair procedure.

Most of the case law on this subject deals with dismissals where an employee has been convicted of a sexual offence. A dismissal following such a conviction has been found to be fair in cases where the employee is working with young people. Also, in Creffield v The BBC,¹ an employee in a seemingly unrelated position convicted of a similar offence was held to be fairly dismssed. In this case, a film cameraman was dismissed following a conviction for assaulting a girl. The BBC's defence was that if they continued to employ him they would have to be careful in considering the assignments on which they sent him. The dismissal was upheld as fair.

¹ [1975] IRLR 23.

Awaiting Trial

[C1.22]

Where the employee has been charged with a criminal offence but is awaiting trial, any dismissal is likely to be unfair on the basis that they have not been convicted. The situation may be different if the employee is on remand for a lengthy period prior to trial and, therefore, unable to attend work or if the employee is of a particularly senior level and the charge attracts such publicity that it is likely to bring the employer into disrepute. However, in the case of Securicor Guarding Limited v R,¹ the security guard, Mr R, was arrested and charged with sex offences against children. When he was questioned about the charge by his employer, he denied the allegations. Securicor felt that the customer on whose premises Mr R was working would not want a person charged with such offences on their premises and dismissed him. Nevertheless, it was held that the dismissal was unfair and the mere fact that an employee in a sensitive position has been charged with an offence will not justify the employer in dismissing him/her rather than suspending him/her or moving him/her away from the sensitive position.

¹ [1994] IRLR 633.

Effect of Conviction

[C1.23]

The safest course to take is to consider whether the conviction really does have an impact on the role the employee has in the employer's workforce and then clearly show how the decision to dismiss relates to the ability for the employer to have future trust and confidence in the employee.

Discovery of Previously Undisclosed Criminal Convictions

[C1.24]

An employer may also wish to dismiss an employee for previous criminal convictions where these have been concealed from the employer by the employee on the application form. It should be remembered, however, that the Rehabilitation of Offenders Act 1974 provides that certain convictions will be 'spent' after a particular time (see also [C1.99] below). This means that an employee has no obligation to reveal such offences unless they are applying for jobs in particular sectors, for example, care work with young people.

If the offence was not 'spent' and the employee has deliberately concealed a previous criminal conviction then a dismissal for such a reason would be a dismissal relating to conduct.

When the employer discovers that an employee has concealed a previous offence they will again need to conduct an investigation into the matter and consider whether this gives sufficient grounds to dismiss in the present circumstances. This would depend upon the applicability of the previous conviction for the job that the employee carries out and also whether the fact that the employee lied on the application form means that the employer can no longer have trust and confidence in the employee in the ongoing relationship. The employee would have to have been employed for one year or more to have unfair dismissal rights for the above issues to be relevant. Accordingly, the way in which duties were performed or the individual's conduct in that period would be factors to be taken into account.

The case of X v Y¹ was decided prior to the commencement of the Employment Equality (Sexual Orientation) Regulations 2003, which have now been replaced by the EqA 2010, but is likely to remain good law, since the Regulations were aimed at protecting sexual orientation per se, not necessarily anything connected with it. The employee in this case was a charity development officer who worked with young people in the age group of 16–25 years. The employee failed to disclose a conviction for involvement in homosexual acts in a public lavatory whilst off duty. Once the employers discovered the concealment of the conviction they dismissed the employee for gross misconduct. This dismissal was held to be fair and the employee's arguments, with regard to a right to respect for private and family life, under the Human Rights Act 1998 failed. The tribunal found that not all sexual relations can be regarded as 'private' especially where it involves a criminal offence. The tribunal found that the issue of the employee's sexuality was not an issue in the employee's decision to dismiss.

¹ [2003] IRLR 561.

Key Points to Remember

[C1.25]

If an employee is guilty of dishonesty, the employer may be able to dismiss for misconduct.

The employer must have a reasonable belief in the guilt of the employee before dismissing him/her, as per the Burchell test. Thus, a thorough investigation should be carried out.

In certain cases, if an act of dishonesty is committed outside work, the employer may be able to justify dismissal if the offence damages trust and confidence in the employee.

However, if the employer has a policy (which has been communicated to employees) stating that employees will be dismissed for a criminal conviction outside work, this will strengthen the case that any dismissal on that ground is fair.

In certain cases, an employee may be statutorily barred from carrying out his/her particular job if he/she has a criminal record.

The employer should not employ a blanket policy of dismissing employees who are convicted of a criminal act without further consultation. This is likely to be held unfair.

The dismissal of an employee who has been charged and is awaiting trial is likely to be unfair unless it can be shown that any charges that have been brought bring the employer or the individual into disrepute or if the employee is on remand for a lengthy period prior to trial.

Dismissal for non-disclosure when recruited of a previous criminal conviction is likely to be fair unless it can be shown that the conviction is 'spent'. However, this will depend on the employee's job and the extent to which the damage to trust and confidence is material.

Conduct Outside Work

[C1.26]

Apart from conduct related to the use of drink and drugs as discussed below at [C1.74], an employer may consider other conduct outside the workplace to be unacceptable. Membership of particular organisations that the employer considers may be damaging to the workforce may be unacceptable. For example, in the case ofRedfearn v Serco¹, Mr Redfearn was dismissed from his role as a bus driver following representations by the union that its members objected to working with him because he was a BNP councillor and due to concerns about the health and safety of employees and passengers given the potential for anger and violence. He did not have a year's service and was therefore unable to bring an unfair dismissal claim so he instead alleged race discrimination. The Court of Appeal held that he was not dismissed on racial grounds. A comparison was made with an employee 'dismissed for racially abusing his employer, a fellow employee or a valued customer'. A dismissal in such circumstances would not be on racial grounds simply because racial considerations are relevant. Similarly, participation in activities which conflict with the employer's activity or business (for example, the running of a competing business) may be unacceptable to the employer. This may justify dismissal on grounds of misconduct or 'some other substantial reason'.² In all cases, the employer would need to show that the continued employment of the employee would be likely to have a negative impact on the employer's business or the harmony of the workforce in order to justify dismissal for such a reason. It is not sufficient to show a breach of the duty of fidelity. It would also be prudent to warn the employee that continuation of the activity would lead to his/her dismissal prior to taking such a step, although there may be some cases where trust and confidence has been so badly damaged this is not possible (see below at [C1.90]).

¹ 2006 IRLR 623.

² ERA 1996, s 98(1).

In the case of Singh v London Country Bus Services Limited,¹ an employee who handled money for the employer was convicted of offences of dishonesty. The employee was dismissed after a disciplinary inquiry and appeal. It was held that the dismissal was fair as misconduct by an employee off-duty may be a substantial reason for his/her dismissal, so long as it affects or could be thought likely to affect him/her when he/she is doing his/her work.

¹ [1976] IRLR 176.

In the case of Moore v C&A Modes,¹ a senior employee of C&A was caught shoplifting from neighbouring stores and after being interviewed by C&A was forced to sign her 'resignation' form. It was held that the dismissal was fair.

¹ [1981] IRLR 71. See below at [C1.34].

The employer should remember that there are particular activities which are statutorily protected, for example, trade union activities and assertion of health and safety rights (see below at [C1.96]–[C1.98]). An employer may not approve of unions and may not recognise unions¹ – nevertheless, it is unfair to dismiss an employee for reasons relating to his/her union membership. An employer will also be acting unfairly if it dismisses an employee for exercising a right under, or acting pursuant to, the Information and Consultation of Employees Regulations 2004. Likewise, an employee's religious beliefs will be protected in Northern Ireland by the Fair Employment (Northern Ireland) Act 1976 and in the rest of the UK by the EqA 2010. An employer will discriminate against an employee if it dismisses the employee for his/her religious beliefs. Obviously, if the employer believes that the employee is antagonising other work colleagues through a particular activity in the workplace, this can be dealt with as a conduct issue through the disciplinary procedure if it cannot be dealt with informally. InPower v Greater Manchester Police,² the EAT confirmed that an employer may discipline its employees for inappropriately manifesting their protected beliefs in the workplace. The claimant's belief in the psychic and paranormal was protected by the Employment Equality (Religion or Belief) Regulations 2003 (now contained in the EqA 2010). However, the claimant was not dismissed 'on the grounds of' those beliefs. Although the claimant was dismissed primarily on the grounds of conduct, during an investigation it came to light that he had brought spiritualist DVDs and posters into the workplace. This was considered inappropriate and was a second reason for his dismissal. There is an important distinction between treatment on the ground of a person's beliefs and treatment on the ground of the manifestation of those beliefs.

¹ However, the Employment Relations Act 1999 contains procedures for statutory recognition of unions where such recognition is supported by the workforce.

² [2010] All ER (D) 173 (Oct).

An employer should be careful, however, that it is not being misled by false information given by other employees who may be prejudiced against the employee themselves.

It should be noted that employers may be vicariously liable for acts of harassment committed by their employees. This applies not only to acts committed in the course of employment but also to the actions of employees committed outside work in circumstances where the employer could have prevented the harassment.

In the case of Chief Constable of Lincolnshire Constabulary v Stubbs,¹ a woman Detective Constable brought a claim of harassment against her employers in relation to incidents that happened outside work. DC Stubbs was subjected to sexual harassment on two separate occasions in the pub after work with other police officers present. The perpetrator was in both cases a Detective Sergeant Walker. The EAT held that as both incidents took place at social events involving officers from work and in one case was immediately after work and in the other was a leaving party for a colleague, they could be construed as occurring 'during the course of employment'.

¹ [1999] IRLR 81.

Not all employer-organised or work-related social events will be considered as occurring 'during the course of employment'. Mr Sidhu had been employed by Aerospace Composite Technology (ACT) Ltd for several years. ACT organised a social day, once a year, for their employees and the employees' families. At the social day, Mr Sidhu and his wife were subjected to physical and verbal racial abuse by other employees. Mr Sidhu responded to the attack by brandishing a chair at his attackers. Mr Sidhu was left with cuts to his head and his spectacles were broken. ACT took disciplinary proceedings against Mr Sidhu and the main attacker which culminated in the dismissal of both employees. Mr Sidhu complained of unfair dismissal and race discrimination.

The Court of Appeal held that the social day could not be said to have occurred 'during the course of employment'. Perhaps significantly, the majority of people attending were not in fact employees. Further, the employer had not discriminated on racial grounds by failing to take into account the acts of provocation because this was a policy consistently applied to all races.¹

¹ Sidhu v Aerospace Composite Technology Ltd [2000] IRLR 602.

Key Points to Remember

[C1.27]

Certain conduct may be unacceptable to the employer, such as membership of a particular organisation, participation in activities which conflict with the employer's business, and so on. Unless it would be reasonable for the employer to instantly dismiss an employee in order to protect the employer's business/interests, the employer should warn the employee that continuation of the activity will result in his/her dismissal.

Some such activities, however, are statutorily protected. These include, inter alia, trade union activities and assertion of health and safety rights.

Physical and Verbal Abuse of Customers and Other Employees

[C1.28]

A dismissal for physical or verbal abuse, whether of customers or other employees, will be a dismissal related to conduct.

In nearly all cases, physical abuse is referred to in employers' disciplinary procedures as being an instance of gross misconduct entitling the employer to dismiss without notice (see [C1.7] below). It is also one of the few cases where employment tribunals have sometimes indicated that it has not been necessary to hold an investigatory or disciplinary hearing prior to dismissal. An employer should not, however, rely on this and should follow appropriate procedures in all cases before dismissing. Even where a situation has been provoked, it is difficult to imagine that any kind of physical attack would not result in at least a warning and would probably result in a dismissal in most cases.

In the case of Ellis v Hammond and Hammond,¹ Mrs Ellis was employed by a family firm of fruit and vegetable growers. Mrs Ellis had received a number of warnings during the course of her employment, some of which were official warnings and others were verbal reprimands, all of which concerned her performance and conduct.

¹ EAT 1257/95.

On 6 February 1995, she received a third written warning after colleagues had complained about her work rate, which resulted in her throwing things at them. Two weeks later, she threw parsnips at colleagues and was reprimanded again, as a result of which she became extremely angry. On 23 February she was sent a letter dismissing her. There had been no disciplinary hearing.

The employment tribunal and Employment Appeal Tribunal expressed concern that there had been no final disciplinary hearing. However, the omission did not render the dismissal unfair on procedural grounds. The Court of Appeal dismissed Mrs Ellis' appeal. It is important to note that, in this case, the employer was a small family concern and the same action may have been held to have been unfair had a larger employer been concerned.

Physical abuse of a customer is likely to be viewed even more seriously by an employer and by an employment tribunal. Again, the employer should investigate and consult with the employee, prior to dismissal, to ascertain the full facts of the circumstances. Where the assault is admitted, the employer will need to consider any mitigating factors. If the assault is denied, there will be a conflict between what the customer said happened and the employee's recollection. In such case, the employment tribunal would not necessarily expect the employer merely to take the word of the customer because the employer is trying to placate them and keep their custom. The employer must again follow the steps set out in BHS v Burchell (above at [C1.1]) to satisfy himself as to the facts following a thorough investigation.

In the case of Scott Packing and Warehousing Company Limited v Paterson,¹ the tribunal upheld as fair a dismissal where the customer had insisted that the employee be dismissed. However, in the case of Grootcon (UK) Ltd v Keld,² the employee was found to have unfairly dismissed the employee when they did so at the request of BP, their customer, because they could not show that sufficient discussions had taken place with BP prior to the dismissal in order for them to establish their reasons for the request and any way of avoiding it.

¹ [1978] IRLR 166.

² [1984] IRLR 302.

Verbal abuse may not be considered as serious as physical abuse although verbal abuse of a customer is likely to be considered very seriously and, in many cases, would amount to grounds for a fair dismissal provided termination was preceded by the following of a fair procedure.

Verbal abuse of a fellow employee may amount to a reason for dismissal in cases where it is not acceptable in the general workplace for such language to be used. Obviously, in certain workplaces (for example, in some factories) swearing is commonplace. It would, therefore, be difficult to justify the dismissal of one person who has sworn at another where it is accepted conduct by others (see further [B1.8]). It is easier to dismiss for verbal abuse where it is clearly stated in the employer's disciplinary procedures that it is not acceptable. In a case where an employee and his manager exchange heated debates with both sides swearing at each other, it may be difficult to dismiss the employee fairly for verbal abuse of the manager. Whilst each case will depend on its own facts, instant dismissal will not be appropriate in most cases of verbal abuse and warnings should be given pursuant to the employer's disciplinary procedure before a decision to dismiss is taken. Employers, in determining their policy in relation to bad language, should note that swearing in the workplace and the use of foul language could amount to a breach of the implied term of mutual trust and confidence entitling an employee to resign and claim constructive dismissal.¹

¹ Horkulak v Cantor Fitzgerald International [2003] QB 1918.

Key Points to Remember

[C1.29]

Generally, physical abuse of a customer or other employee is referred to in disciplinary procedures as being an instance of gross misconduct entitling the employer to dismiss without notice.

Even in cases of serious physical abuse, it is best practice to hold an investigation and a disciplinary hearing prior to deciding whether to dismiss.

Any mitigating factors will need to be considered.

Whether verbal abuse of a fellow employee is viewed as a disciplinary matter will depend on generally accepted conduct at the workplace. If verbal abuse is not generally acceptable or if the abuse is directed to a customer, this may be grounds for a fair dismissal provided that the decision to dismiss is preceded by a fair procedure. Except in very serious cases, this will require warnings to have been given before a decision to dismiss is taken.

It is easier to dismiss an employee for verbal abuse where it is clearly stated as unacceptable in the employer's disciplinary policy.

Harassment

[C1.30]

A dismissal for harassment of another employee or a customer would be a dismissal for conduct.

Although harassment is not as such a form of discrimination, it has for many years been included in the various pieces of discrimination legislation. The EqA 2010 replaced and consolidated 40 years' worth of legislation in the employment and discrimination fields. Under EqA 2010, s 26, harassment is now a freestanding claim. The following types of harassment prohibited by s 26:

sexual harassment;

racial harassment;

harassment of another on the basis of their disability;

harassment on the basis of religion or belief, including philosophical belief;

harassment on the basis of sexual orientation; and

harassment on the basis of age.

Religious or political harassment in Northern Ireland may also be unlawful under the Fair Employment (Northern Ireland) Act 1976.

As a victim of harassment can bring a claim against an employer for the acts of discrimination and harassment committed by others during the course of employment, an employee who harasses another exposes his/her employer to such claims.¹ EqA 2010, s 40 introduced a new offence of third-party harassment. Employers can be guilty of acts of harassment committed by third parties where a third party harasses an employee in the course of that employee's employment and the employer has failed to take reasonably practicable steps to prevent such harassment. However, an employer can only be liable for harassment by a third party if it knows the employee has been harassed on at least two other occasions (by the same or a different third party). Harassment claims can expose an employer to the risk of bad publicity and high awards of compensation.

¹ EqA 2010, s 109.

An employer will be able to defend a harassment claim if it can be shown it took such steps as were reasonably practicable to prevent discrimination.¹ Therefore, it is essential that employers have policies and training:

making it clear that harassment is not acceptable;
explaining clearly what constitutes harassment; and
making harassment a disciplinary offence.

When harassment occurs, it should be dealt with consistently.

In some cases, in order to defend a claim, it will be helpful (if not essential) to have redeployed or, if that is not possible, dismissed the employee accused of harassment so that the victim no longer has to have regular or as much contact with him/her. Whether or not dismissal is reasonable and therefore fair will be a question of fact and degree. Certainly, an investigation will be required but even if this is not conclusive, dismissal could still be reasonable.

¹ RRA 1970, s 32(3); SDA 1975, s 41(3); DDA 1995, s 58(3); Employment Equality (Sexual Orientation) Regulations 2003, reg 22(3); Employment Equality (Religion or Belief) Regulations 2003, reg 22(3); and Employment Equality (Age) Regulations 2006, reg 25(3).

Sexual Harassment

[C1.31]

Sexual harassment can happen to both men and women – sexual harassment amounts to unlawful discrimination under the EqA 2010 and can take many forms – generally described as unwanted conduct of a sexual nature. EqA 2010, s 26 contains the statutory definition of harassment and it is essentially 'unwanted conduct which has the purpose or effect of violating (another's) dignity; or creating an intimidating, hostile, degrading, humiliating or offensive environment.'

Examples of behaviour which, if unwelcome, are likely to constitute sexual harassment are as follows.

Comments about another's physical appearance or sexual behaviour.

Asking someone on a date.

Making suggestive remarks or gestures.

Touching in a way to make the person feel uncomfortable, for example, pinching, hugging, kissing, patting or more extreme examples such as attempted rape.

Telling sexual jokes.

Whistles or cat calls.

It does not matter what is intended by the conduct. What determines whether the conduct constitutes sexual harassment is that the conduct is unwanted. Therefore, what one employee sees as jokes and friendly gestures are not necessarily interpreted that way.

Racial, Religious and Disability Harassment

[C1.32]

Where the victim of harassment is from an ethnic or racial minority or is disabled, what amounts to harassment has not been defined through case law in as much detail as sexual harassment. However, it can equally be discriminatory to harass someone by gestures, comments on appearance, jokes and even touch on the basis of:

colour;

race;

nationality;

ethnic origin;

religious belief;

age; or

a person's physical or mental impairment.

Harassment related to Sexual Orientation or Belief or Religion

[C1.32A]

In Tower Boot Company Ltd v Jones,¹ Mr Jones was 16 years old. His father was black and his mother was white. He commenced work with Tower Boot upon leaving school. He was subjected to severe racial harassment at the hands of his fellow employees, including being burnt with a hot screwdriver and having metal bolts thrown at him. The Court of Appeal held that the employer was liable for the acts of harassment committed by its employees in the course of employment.

¹ [1997] IRLR 168.

Where an employer does not have a policy prohibiting harassment or provide training indicating what constitutes harassment, it may be more difficult for them to fairly dismiss an employee who has committed such behaviour. However, not dismissing the perpetrator may result in the victim of the harassment resigning and claiming unfair constructive dismissal (see [B2.3] above).

Likewise, the alleged perpetrator of the harassment may, as a result of dismissal or other disciplinary action being taken against him/her, bring a case against the company. The company will need to satisfy the virtual test that, as a result of their investigation, they are entitled to make the finding which they did and that, in those circumstances, dismissal or such other disciplinary action was an appropriate response. If the harassment alleged is not particularly gross, the employer may be in difficulty if it does not have a clear policy prohibiting such action, supported by training. Where the alleged harasser is an unskilled worker, it may be held that it would be unreasonable to expect them to know what constitutes harassment if they have not been specifically trained by the employer.

Harrassment related to Age

[C1.32B]

Both younger and older employees can be victims of harassment related to age. As referred to at [C1.31] above, EqA 2010, s 26 defines harassment as 'unwanted conduct which has the purpose or effect of violating (another's) dignity; or creating an intimidating, hostile, degrading, humiliating or offensive environment.' Examples of behaviour which, if unwelcome, are likely to constitute harassment, are:

excluding workers from social events because they are considered too old or too young for a particular event, activity or venue;

telling ageist jokes;

making ageist comments such as 'wet behind the ears' or 'you can't teach an old dog new tricks'; and

commenting that particular behaviour or dress is inappropriate for persons of a certain age.

Harassment Other than by Discrimination (Including Bullying)

[C1.33]

The Protection from Harassment Act 1997 was primarily intended to counter stalking. It provides criminal and civil protection to individuals who can show that someone has pursued a course of conduct against them which amounts to harassment. A 'course of conduct' must consist of at least two occasions and 'harassment', although not specifically defined in the Act, has been accepted as being 'intent to cause distress or alarm'. The harasser must know, by the standards of the reasonable person, that his/her conduct would amount to harassment. Employers risk vicarious liability for such wrongdoing if carried out in the course of employment. It is not just harassment covered by the legislation that can give grounds to a fair dismissal for misconduct. Bullying and any harassment, be it verbal or physical, can form the basis of a fair dismissal (see [C1.28] above).

Key Points to Remember

[C1.34]

The harassment of fellow employees may give rise to a fair dismissal for misconduct without prior warning. Further, the employer may be liable for harassment committed by employees in the course of their employment or by third parties.

Harassment may be covered by discrimination legislation or alternatively the Protection from Harassment Act 1997. Other harassment not covered by legislation may equally form the basis for a dismissal.

The employer may find itself subject to vicarious harassment claims if it does not carefully police any instances of harassment by its staff.

The employer should take all steps that are reasonably practicable to prevent discrimination in the workplace.

Harassment can take a number of different forms, both verbal and physical and may be a criminal offence.

Not Complying With Lawful Instructions

[C1.35]

A dismissal of an employee who fails to comply with lawful instructions will be a dismissal for conduct.

Depending upon the seriousness of the incident, a dismissal may be considered to be within the band of reasonable responses¹ of an employer after only one instance of dissent. In some cases, however, a dismissal may be considered to be reasonable only after repeated refusal and where warnings in accordance with the employer's disciplinary procedures have been given to the employee.

¹ See [C2.5] below.

In considering what would be a reasonable response, the tribunal is likely to consider the:

terms of the contract;
nature of the instruction;
impact of the refusal to follow it; and
seniority of the employee.

In the case of Farrant v Woodroffe School,¹ Mr Farrant was a lab technician who was dismissed when he refused to accept a change to his duties. The school where he worked had been mistakenly advised by the local authority personnel department that the new duties that he was being required to perform could be asked of him under the terms of his contract. The local authority was, in fact, wrong but, nevertheless, the Employment Appeal Tribunal held that the employers had acted reasonably in dismissing the employee because of their genuine, if mistaken, belief that they were entitled under the contract to require Mr Farrant to work the new duties. The lawfulness of the instruction is a relevant but not decisive consideration. The tribunal also looked at the compelling need to require changes due to the severe financial restraint. This is probably the overriding reason for the dismissal in this case being held to be fair.

¹ [1998] IRLR 176.

Similarly, in the case of Ellis v Brighton Co-Op Society,¹ the dairy business where Mr Ellis worked required employees to work longer hours in order to prevent the business being brought to a standstill. The change had been agreed with the union, although the union was not Mr Ellis' agent. However, Mr Ellis refused and he was dismissed. The employment tribunal held that the dismissal was fair.

¹ [1976] IRLR 419.

The Court of Session in Scotland ruled in the case of Macari v Celtic Football and Athletic Co Ltd¹ that the employee was bound to obey the employer's instructions, even if they were given maliciously, provided the dismissal itself could be justified.

¹ [1999] SLT 138, [1999] IRLR 787.

In the case of Graham v Anthony Todd (Haulage) Limited,¹ Mr Graham was employed as an apprentice mechanic. During his time with the company, complaints were made about his timekeeping and the fact that he left work immediately on time. He was dismissed after he refused to work past 5pm when requested to do so by a company director. The dismissal was held to be unfair as there was no contractual requirement to work overtime.

¹ [1975] IRLR 45.

The Terms of the Contract

[C1.36]

The issue of what is and what is not a lawful instruction may arise. The dismissal of an employee for failing to follow an instruction which an employer is not empowered to ask the employee to do under the terms of the contract may be unfair.

Obviously, a contract will not specify exactly what an employer can or cannot ask in all cases but clauses dealing with the following issues will usually make it clear what is expected of an employee:

place of work;

duties;

hours of work;

sickness entitlement;

holiday entitlement; and

prohibited acts (eg smoking).

An employer may try to compel an employee to work in a different location or at different hours but unless the contract expressly or impliedly allows the employer to insist on this, there will be no lawful instruction that the employee is expected to obey (see further [B2.11] and [B2.26] above). If the employer dismisses the employee because of his/her refusal to obey, it is likely to result in a finding of unfair dismissal.

An employer may, in certain circumstances, insist upon a change in the contractual terms where it can show that change is necessary for the sake of the business see further [C1.66] below.

Hours of Work

[C1.37]

Since 1 October 1998, it has been unlawful to require employees to work more than 48 hours per week (averaged over a 17 week period, or longer in some cases) unless they have agreed in writing to do so.¹ Any dismissal of an employee for refusing to work hours in excess of this or for refusing to sign an opt out agreement would be automatically unfair (ie there is no qualifying service requirement – see [C1.94] below).

¹ Working Time Regulations 1998 (SI 1998 No 1833).

In the case of Barber and others v RJB Mining (UK) Limited,¹ a group of unionised miners had been regularly working on average for more than 48 hours per week over a 17 week reference period. The employers had asked the employees to sign an opt out agreement but they had refused. The employees refused to work and obtained a declaration from the High Court that they need carry out no further work until such time as their average weekly time fell within the 48 hour general rule.

¹ [1999] IRLR 308.

It should also be remembered that an insistence on working particular hours, even if it is not in breach of the Working Time Regulations, may also be discriminatory because of its effect upon women with child care responsibilities.

Location

[C1.38]

Where there is no express mobility clause (see [B2.11] above), the courts will normally imply a clause to the effect that the employee can be required to work within reasonable reach of his/her home.¹ However, even this limited clause will not be implied if the circumstances do not justify it. In Aparau v Iceland Frozen Foods plc² the EAT refused to imply a mobility clause into a cashier's contract. It held that there was no business necessity for such a clause, even though it would be convenient for the employer.

¹ Courtaulds Northern Spinning Ltd v Sibson and Transport and General Workers' Union [1988] IRLR 305.

² [1996] IRLR 119, EAT.

Where there is an express mobility clause it will bind the employee but must still be exercised in a way which does not undermine trust and confidence in the employment relationship (see [B2.19] above). In United Bank Ltd v Akhtar¹ the EAT related the duty to give reasonable notice of a transfer under a mobility clause to the implied duty not to frustrate the employee's efforts to perform the contract.

¹ [1989] IRLR 507, EAT.

Mobility clauses may also be indirectly discriminatory (see also [B2.11]–[B2.14] above). In Meade-Hill v British Council¹ the Court of Appeal held that such a clause was potentially unenforceable as a greater proportion of married women were 'secondary earners' and therefore less able to move house than their male colleagues. Enforceability would depend on a valid justification for the clause being put forward by the employer. In practice, provided the employer has a reasonable business need for relocation it is likely that justification can be shown.

¹ [1995] IRLR 478, CA.

Generally, provided that the relocation is a short distance from the original workplace, a refusal to relocate may be considered to be unreasonable, even in the absence of a contractual mobility clause. Consequently, a dismissal for refusing to move would be fair, provided the procedural safeguards were followed. The distance that would be reasonable to require an employee to move is likely to depend on the seniority of the employee and the geographic location.

It should be noted, however, that any relocation where the employer is ceasing to carry out the business at the original place of work will be a redundancy situation and the proximity of the new place of employment and an employee's particular circumstances will determine whether the new employment constitutes suitable alternative employment for the purposes of redundancy payment. (See also [C1.52] below.)

Holidays

[C1.39]

In Cole v Midland Display Limited¹ an employee continued to take a week's holiday even though he had been specifically told that he could not be spared at that time. He was also told that if he went ahead and took the holiday he need not bother returning to work. The dismissal was held to be fair. In Stennings v Supa Heat² Mr Stennings was refused time off for the birth of his child. The tribunal held that the dismissal was unfair, although it did reduce compensation by 50% because Mr Stennings had announced that he was going to take the time off rather than requesting it. It should be noted that since December 2002 an employee has been entitled to up to two weeks' paternity leave, upon giving the appropriate notice to their employer, by virtue of the Paternity and Adoption Leave Regulations 2002.

¹ [1973] IRLR 62.

² 20719/96.

Care should be taken when determining a general policy. In J H Walker Ltd v Hussain and Others¹ the employer inserted a new policy prohibiting employees from taking holiday during the busiest months of the year. This period included the Muslim festival of Eid and employees who took this as an unauthorised holiday were disciplined. The EAT held this was indirect race discrimination as only Asian employees were affected by the bar. Note also the impact on such considerations of the prohibition against discrimination because of religion or belief under the EqA 2010.

¹ [1996] IRLR 11.

Note that under Regulations 13–16, Working Time Regs 1998, workers are entitled to 28 days' holiday (including public holidays) per year. If the employer dismisses an employee in connection with his/her refusal to forego the right to this holiday, the employee may present a complaint of unfair dismissal within three months to the employment tribunal (ERA 1996, s 101A inserted by Regulation 32). Such a dismissal will be automatically unfair and will thus not require any qualifying service period.

Key Points to Remember

[C1.40]

Depending on the seriousness of an employee's refusal to comply with a lawful instruction, the employer may be able to dismiss that employee after only one incident.

The instruction must be lawful (or there must be a reasonable belief in the lawfulness of the instruction) and provided for in the contract of employment.

Provided that a proposed relocation is a short distance from the original workplace, a refusal to relocate by the employee may be considered to be unreasonable.

In all other cases an employee cannot be forced to relocate unless there is a mobility clause within the employment contract.

Even if there is a mobility clause, such a clause should not be operated capriciously and care must be taken to ensure that the clause does not indirectly discriminate against women.

An employer may be able to dismiss an employee who has taken unauthorised holiday after only one incident.

Care should be taken that a blanket ban on holidays at a certain time of year does not give rise to claims for race discrimination or discrimination on the ground of religion or belief.

Unauthorised Absence

[C1.41]

A dismissal for unauthorised absence should be treated as a dismissal for conduct rather than capability.

In order to rely on an incident of unauthorised absence to dismiss, employers need to identify the circumstances in which absence is authorised. This will be governed by the contract of employment, employee or company handbook and by statute. It is helpful for the contract of employment or handbook to state the circumstances in which an employee is permitted to take time off. This may include all or some of the following reasons (being careful not to curtail any statutory rights such as the right to paid annual leave in the Working Time Regulations 1998 or to parental or adoptive leave under the Maternity and Parental Leave etc Regulations 1999 and the Paternity and Adoption Leave Regulations 2002):

sickness;

holiday;

medical or dental appointments;

children's sickness;

paternity leave;

parental leave;

leave following adoption; and/or

compassionate leave.

The procedures should clearly say who should be notified or from whom permission should be sought prior to the absence being taken. Employers need to decide whether such matters as non-urgent doctor, dentist or optician appointments should be taken as holiday, unpaid leave or sick leave. Likewise, matters such as the care of children or other relatives needs to be considered.

As indicated above, there are a number of circumstances in which legislation provides for a right to time off. The provisions of the Parental Leave Directive¹ have been implemented through the Employment Relations Act 1999 and subordinate legislation. Under the Maternity and Parental Leave etc Regulations 1999 all parents are entitled to up to 13 weeks' unpaid time off to care for a child under five years of age. Parents for this purpose includes not only natural parents but also those with parental responsibility (which can include step parents depending on the circumstances). Adoptive parents have the same right to parental leave, save that it can be taken at any time during the period of five years following placement of the child but not after the child has attained the age of 18. There is a qualifying period of service of one year's continuous employment for taking leave and notification requirements to be observed before leave commences. In addition, employees are entitled to time off work on grounds of urgent family reasons in cases or sickness or accident – it need not be the employee's child that requires the employee's attendance.

¹ 97/75/EC.

In addition, pregnant women are entitled not to be unreasonably refused paid leave of absence to attend ante-natal appointments in addition to their entitlement to maternity leave. All employees are entitled to 52 weeks' maternity leave commencing not earlier than eleven weeks before the expected date of childbirth. The employee must notify her employer no later than the end of the 15th week before her expected week of childbirth (or, if that is not practicable, as soon as is reasonably practicable) that she is pregnant, the expected date of childbirth and the date she intends her maternity leave period to start. If requested by her employer, she will also have to produce a medical certificate. If absent wholly or mainly by reason of pregnancy (eg because of pregnancy-related sickness) within four weeks of the expected date of childbirth, maternity leave will commence even if no prior notice has been given. There is a minimum period of compulsory maternity leave of two weeks commencing on the date of childbirth.¹

¹ ERA 1996, ss 55(1), 56(1), 72.

Other examples of specific rights to time off are:

time off for public duties,¹ including:
- acting as a Justice of the Peace;
- membership of a local authority;
- membership of a statutory board;
- membership of a police authority;
- membership of a board of prison visitors; and
- membership of a relevant health authority or education body;
time off for pension fund trustees;
time off for employee representatives and trade union representatives;
time off to accompany a fellow employee to a disciplinary or grievance hearing;²
time off for young persons for study and training;³
time off for training undertaken as an employee representative for the purposes of consultation on collective redundancies and transfer of undertakings;⁴and
time off for the purposes of performing duties as representatives under the Information and Consultation of Employees Regulations 2004.⁵

¹ ERA 1996, s 50.

² ERA 1999, s 10.

³ ERA 1996, ss 63A–63C.

⁴ Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 1999 (SI 1999 No 1925).

⁵ Regulations 27 and 28.

Where an employee either fails to have an authorised reason or comply with the necessary reporting requirements for authorised absences, the employer is unlikely to be able to dismiss fairly after one occurrence but should follow its own disciplinary procedure by giving the appropriate warnings to the employee. Consequently, if the employee makes a practice of this, the employer will, having given the appropriate warnings after each instance of unauthorised absence, be able to dismiss the employee fairly for misconduct, provided it has met with the employee and documented the matter properly (see [C2.37] below).

In some cases, an employee purportedly absent by reason of sickness (even if a medical certificate has been provided by their GP) may not be sick at all or not too sick to attend work. For example, the employee may be seen out and about whereas the illness that he/she has said that he/she is suffering from would mean confinement to bed. In Hutchinson v Enfield Rolling Mills,¹ the employee had a sick note from his doctor but was seen attending a union demonstration in Brighton. He was dismissed and the EAT held that it was permissible for the employer to go behind the sick note and consider the activities of an employee who is on sick leave and whether such activities are consistent with any sick note.

¹ [1981] IRLR 318.

Key Points to Remember

[C1.42]

Employers may dismiss for unauthorised absence.

Employees should be informed in the employee or company handbook, their contract or by way of stated policies and procedures which absences are or are not authorised.

In certain cases, there is a statutory right to time off, including maternity, paternity and parental leave and time off for ante-natal appointments, public duties or family emergencies.

It is unlikely to be a fair dismissal if the employer dismisses the employee after only one occurrence of unauthorised absence – the proper warning procedures should be followed before a decision is taken to dismiss.

Poor Attendance Record and Ill Health

[C1.43]

Poor attendance may result in a dismissal relating to conduct or capability, depending on the circumstances. In exceptional cases, where there is a long period of absence the contract of employment may be considered to be frustrated but this is rare (see [B1.26] above). Where frustration cannot be relied upon and the employee does not resign, the employer will have to consider whether there are grounds for dismissal.

Conduct

[C1.44]

In the case of Newalls Insulation Co Ltd v Blakeman,¹ the employee was persistently absent and had been given two oral warnings followed by a final written warning. In the following six weeks, the employee had a further two absences and was dismissed. It was held that the dismissal was fair. In cases of intermittent absence, the critical issues are:

what happened before and after the warning;

how many absences were there;

what sort of absences were there; and

how do these absences, in the light of the employee's own record, fit into the 'general picture'.

¹ [1976] IRLR 303.

In Halfpenny v Our Lady's Preparatory School,¹ a schoolmaster was elected a county councillor and was increasingly absent from the school in order to attend council duties. He refused the school Governors' offer to discuss the matter and after several warnings was dismissed. It was held that the dismissal was fair because:

he failed to consult with the Governors;
the use of his wife as a replacement teacher was unsatisfactory for the students; and
the Governors tried to accommodate his public duties.

¹ EAT 468/83.

Capability

[C1.45]

It is not possible to state how much absence is required to be sure that a dismissal on grounds of capability will be fair. The fairness of a dismissal will depend on the size and administrative resources of the employer and a larger employer may be better able to cover the absence of an employee. The nature of the employee's position will also be a relevant consideration.

In the case of Rolls-Royce Ltd v Walpole,¹ the employee had a good attendance record for four years but in the three years leading to his dismissal, his absences averaged about 50%. The employee was dismissed as no improvement was anticipated. It was held that the dismissal was fair because evidence established without a doubt that this dismissal fell within the range of reasonable responses to an absenteeism record of the employee's type.

¹ [1980] IRLR 343.

Where there is a long term absence or series of intermittent absences through ill-health, an employer will be expected to investigate the medical position (see [C2.56] below).

Key Points to Remember

[C1.46]

In cases of long periods of absence, it might be considered that the contract has been frustrated but this is rare.

An employee may be dismissed for a poor attendance record arriving from intermittent or continuous absence.

A poor attendance record may be for either a conduct or capability issue.

Long-term Sickness Absence

[C1.47]

A dismissal for long-term sickness absence will be a dismissal relating to capability.

Previously, it was often easier to deal with a case of long-term sickness than a case of intermittent absences. Long-term sickness is likely to be for one particular illness, whereas intermittent absences may be for a series of unrelated illnesses. In cases of long-term absence, the employer should seek medical advice after obtaining the employee's permission to do so and consult fully with the employee (see [C2.57] below).

Where long-term illness is caused by a workplace accident or injury, the matter can become somewhat more complicated. An employee may sue his/her employer for damages for personal injury. If he/she loses his employment, the employee's loss will increase as a result. Should the employee be successful in bringing a claim, the level of the award will be reduced if the employee has been kept on full pay. This will be a decision for the employer, bearing in mind the fact that it is likely to be covered by the employer's employee liability insurance and, therefore, may not be a direct cost to the employer other than through increased insurance premiums.

Where long-term sickness is not the result of disability under the EqA 2010 provided that medical opinion is obtained which makes it clear that the employee is unlikely to return in the foreseeable future, following consultation with the employee, and considering whether suitable alternative employment can be offered, dismissal is likely to be held fair (see C2: appendices). A complicating factor can be where an employee's consultant or GP disagrees with the prognosis of the company's doctor. It can be reasonable to rely on the company doctor's report but whether it is, indeed, reasonable to do so will depend on the facts. In some cases, obtaining a third opinion may be helpful. Even if company policy states that in a case of conflict the company's own doctor's report will take preference, whether the employer should do so will still be a question of reasonableness.

An employer will, however, also need to take into account the provisions related to disability discrimination under the EqA 2010, which mean that before dismissing, an employer needs to consider whether the employee is disabled under the EqA 2010 (as defined) and whether it might be discriminatory and, if so, whether the dismissal can be justified. If the dismissal would be discriminatory and not justifiable, it is likely to also be unfair. Where an employer (depending on its size and resources) can show that the continued absence is causing financial or administrative problems they are more likely to be able to justify the dismissal. A larger employer is less likely to be able to do so. This does not mean that a dismissal cannot take place. The employer may need to consider negotiating a termination with the employee. An employer should consider all of the possible options for the employee, including allowing early retirement or ill-health retirement under a pension scheme. A failure to do so could make the dismissal unfair.¹

¹ First West Yorkshire Ltd v Haigh [2008] IRLR 182.

The obligation on employers under the EqA 2010 to make reasonable adjustments (see [E1.20] below) means that the employer needs to consider whether it could make an adjustment in order to enable the employee to carry out his/her or some other duties. Depending on the nature of the disability, consideration should be given to such matters as:

altering working hours to make it easier for an employee to travel to work;
setting the employee up with a computer and telephone line at home so that work can be carried out when the employee feels able;
moving the employee onto duties where they do not have to travel;
moving the employee onto duties that do not require heavy lifting or carrying;
modifying and/or providing specialist equipment; or
providing additional training and support.
Such adjustments can be made temporarily in order to ease the employee back into full-time employment.

The ability to offer such variations and adjustments would depend on the size and resources of the employer with more being expected of a larger employer.

Where the employee is not receiving full pay, it may be possible to pay him/her pro rata for the duties that he/she is able to carry out. An employer would not be expected to carry an employee long term in such a way unless the employee was providing a contribution to the business.

Following Aspden v Webbs Poultry and Meat Group (Holdings) Ltd,¹ where the employee has the benefit of Permanent Health Insurance (PHI) it may be expensive to dismiss if the result of the dismissal is that the employee ceases to be entitled to payment of benefits under the policy. It has been successfully argued that where the PHI provided ceases to be payable when employment terminates, there is an implied term in the contract of employment that the employment will continue in order for the employee to continue to benefit from the policy. In the case of Villella v MFI Furniture Centres Ltd², the terms of the PHI policy again stipulated that the benefit ceased on cessation of employment. However, Mr Villella was not shown the policy nor was there anything to this effect in the contract. Accordingly, it was held that the employer was duty bound to make payment themselves. Employers should, therefore, look carefully at the insurance benefit they are providing and the terms of the policy. It is preferable for the employee to be able to continue to benefit from the policy after employment terminates. This would mean that an employer would not be bound to keep an employee on the books where there is no prospect of their return. If it is not possible to secure such insurance, the alternative is to expressly state in the contract of employment that the cover is only provided for as long as the employment continues and the employer reserves the right to terminate after a specified continuous period of absence due to ill health. Although this will not absolve the employer from his obligations under the EqA 2010 in relation to discrimination or the Employment Rights Act 1996 in relation to unfair dismissal, it should prevent any claim under the contract of employment should PHI payments cease to be made when employment terminates.

¹ [1996] IRLR 521.

² [1999] IRLR 468.

Key Points to Remember

[C1.48]

If an employee is absent for a long period due to sickness, the employer should seek medical advice, consult with the employee and consider whether any suitable alternative employment can be offered.

If the long term illness is caused by a workplace accident or injury, consider the effect of dismissal on any personal injury claim the employee may make against the employer.

Dismissal of an employee for long term absence, in circumstances in which the employee is disabled under the DDA 1995, is more likely to be unfair than other dismissals due to long term ill health. A dismissal will not be discriminatory if it can be justified. The employer should consider whether there are reasonable adjustments that can be made and/or whether the employee's duties can be varied.

Before dismissing for long term absence, employers should consider whether payments made under any Permanent Health Insurance policy will cease and, if they will, whether the employee will be able to make a claim against the employer in this regard.

Disability Discrimination

[C1.49]

The decision whether to dismiss on grounds of sickness or attendance became more complicated following the introduction of the Disability Discrimination Act 1995 (DDA 1995) came into force, which made it illegal for UK employers to discriminate on the grounds of disability when persons are applying for employment or during employment. The provisions relating to disability discrimination are now found in the EqA 2010 which replaced and amended the DDA 1995.

The definition of disability is contained in EqA 2010, Sch 1. The basic definition requires that an individual must be able to demonstrate that they have a physical or mental impairment which has a substantial and long-term (has lasted or is likely to last 12 months or more) adverse effect on their ability to carry out normal day-to-day activities.

The EqA 2010 has amended the definitions of direct and indirect discrimination and added a new type of discrimination. Direct discrimination occurs when a person, because of their disability, perceived disability or association with a disabled person, is treated less favourably than others. It is not possible to justify direct disability discrimination. Sometimes an employer may apply a particular provision, criterion or practice to all employees, thereby treating all employees in the same manner. However, treating all employees in the same manner may create a disparity between a group of employees. Where the disadvantaged employees are of a particular group such as those with a disability, there is a possible claim of indirect discrimination. An employer can, however, justify the indirect discrimination if it can show that the treatment (and resultant disparity) is a proportionate means of achieving a legitimate aim (see further [A2.4] above and [D3.74] below).

The EqA 2010, s 15 introduced a new type of disability discrimination: discrimination arising from disability. Discrimination under s 15 arises when a person discriminates against a disabled person by treating the disabled person unfavourably because of something arising in consequence of that person's disability. It is possible to justify such treatment by showing that it is a proportionate means of achieving a legitimate aim. Crucially there is no comparison needed of the treatment of the disabled person with others. This means that it is an easier test for a disabled person to satisfy as he/she will simply need to show the adverse impact was because of the disability. This will be much easier than satisfying the test for indirect discrimination. However, it is important to note that this test cannot apply where the alleged discriminator is not, or could not reasonably be expected to be aware, that the person in question had a disability.

The EqA 2010 places on the employer a duty to make reasonable adjustments (see [C1.47] above). The duty applies to employees, job applicants and contract workers. This duty arises where a provision, criterion or practice or a physical feature of the workplace puts a disabled person at a substantial disadvantage, in relation to a relevant matter, in comparison with persons who are not disabled. If the provision of an auxiliary aid would remove a substantial disadvantage, an employer must take reasonable steps to provide such an aid. An employer needs to consider with the employee whether there is anything that could reasonably be done, to enable the employee to carry out the work. If there is, then the dismissal without taking such steps will be discriminatory and almost certainly unfair. It is no longer possible for an employer to justify a failure to make reasonable adjustments.

A reasonable adjustment, if made, could result in the employee having fewer days off for sickness. It may enable the employee to carry out the work from home on days when he/she is not well enough to travel to work.

The extent to which an employer has a duty to make adjustments will depend on the size and resources of the employer. A larger employer will be expected to spend more money in providing adjustments than a smaller employer. The cost may partly be met by Government schemes. Employers may not be able to argue that it was too expensive to make adjustments if a claim could have been made to meet all or a significant proportion of the cost.

It is good practice to ask employees on longer-term sick leave or who are attending counselling about their illness or disability so that if they are protected by the EqA 2010the employer will be able to fully consider its obligation. An employee with a disability is likely to be able to assist the employer by explaining what adjustments may be able to help. Employers often ask new employees to complete health questionnaires and this information can be useful in determining whether the employee may have a disability and require assistance. However, information regarding disability provided on such a questionnaire cannot be used as a reason for withdrawing a job offer or dismissing a new employee. It is usually necessary to seek an expert medical opinion to ascertain whether an employee is disabled and what reasonable adjustments might be made to assist the employee.

Prior to the EqA 2010, there had been some controversial case law relating to discrimination for a reason relating to disability (now replaced with discrimination arising from disability (see above)). In the case of Clark v TDG Ltd t/a Novacold,¹ Mr Clark suffered an industrial injury which meant that he was off work for six months. The medical prognosis was that he would not be able to resume his full duties for another year, so consequently Novacold dismissed him. Novacold sought to compare Mr Clark with an imaginary employee not covered by the DDA 1995 who was off for the same period. The CA held that the correct way of looking at the matter was to ask whether the applicant had been treated less favourably because of his disability. To answer this it was only necessary to identify others to whom the reason for the treatment did not or would not apply. It was not necessary to identify an able-bodied comparator or person with a different disability. In this case, the answer was 'yes'. Tribunals should then go on to consider whether the discrimination was justified. In doing this, the tribunal would consider the inconvenience and difficulty faced by the employer, for example, whether they have to hire a replacement, and the size and resources of the employer. The CA went on to state that the employer should also have specifically considered what reasonable adjustments could have been made pre-dismissal. A failure to do so would be discriminatory. The case of London Borough of Lewisham v Malcolm,² although not an employment case, narrowed this test by requiring the disabled employee to show that the treatment they received was less favourable than the way an employee who was not disabled would have been treated. The introduction of the EqA 2010, s 15 seeks to redress this limitation effectively reinstating the approach set out inNovacold.

¹ [1999] IRLR 318.

² [2008] IRLR 700.

Sometimes, a long term illness will result in incapability even if the employee is able to attend work. For example, a back injury may prevent an employee from carrying out a job that involves heavy lifting. An employee that loses the sight of one eye may not be able to carry out a driving job or operate some machinery. Such employees may not be disabled under theEqA 2010. Even so, in such cases, an employer should consider whether there is any role that the employee would be able to carry out, even if it required some level of retraining. The amount of time and money that an employer will be required to invest will depend on the size and administrative resources of the employer.

It is more difficult for a larger employer to dismiss fairly for absence issues where there is no case of malingering and the employee is protected by the EqA 2010. This is because the employer is not likely to be able to point to great inconvenience or cost burdens being placed upon them by reason of the employee's absence.¹ For a small employer who may not have sufficient staff to be able to share duties when one member of the team is absent, it is much easier for them to justify a dismissal, even if the employee is covered by the EqA 2010, provided that they have followed the necessary procedures.

¹ Cox v The Post Office (1997, IT, unreported).

Under the duty to make reasonable adjustments, the employer should also consider, prior to deciding whether to dismiss, whether there are any suitable alternative positions which could be offered to the employee.

Key Points to Remember

[C1.50]

If an employee has a disability falling within the EqA 2010, dismissal on the grounds of his/her disability or for a reason relating to that disability will be discriminatory and therefore, without justification, almost certainly unfair.

The employer has a duty under the EqA 2010 to make reasonable adjustments for the disabled employee. Accordingly, prior to dismissing an employee, the employer must consider whether there are any adjustments that can be made to the employee's job or suitable alternative positions which could be offered to him/her.

Qualifications

[C1.51]

An employee may cease to be qualified for the job which he/she is employed to perform. For example, a person who is employed as a driver will not be able to continue his/her duties if he/she loses his/her licence. If someone is employed as a trainee and their future role depends on their obtaining a qualification (for example, solicitors, chartered accountants or chartered surveyors), their failure to obtain such a qualification is likely to result in their dismissal. An employer would also need to consider whether there was another position available which the employee could carry out without the qualification.

Redundancy

[C1.52]

Dismissal for redundancy is one of the potentially fair reasons for dismissal.

Although the term 'redundancy' is frequently used by employers when dismissing employees, it has a specific meaning which is defined by statute. Only if the situation falls within the statutory definition can a redundancy exist. If an employer dismisses stating that the reason is redundancy when it is not, for the dismissal to be fair the employer will have to show that the dismissal is for one of the other potentially fair reasons for dismissal listed in ERA 1996, s 98(1) and (2) (see above at [C1.1]).

Redundancy arises where the dismissal is wholly or mainly attributable to:

the fact that the employer has ceased or intends to cease:

to carry on the business for the purposes of which the employee was employed; or

to carry on that business in the place where the employee was so employed; or

the fact that the requirements of that business:

for employees to carry out work of a particular kind; or

for employees to carry out work of a particular kind in the place where the employee was employed by the employer,

have ceased or diminished or are expected to cease or diminish.¹

¹ ERA 1996, s 139(1).

There has been much case law concerning the question of what the employee's job is and the position remains somewhat unclear. Is it a requirement to carry out the job that is set out in his/her contract that must have ceased or diminished or is it the job that the employee actually performs? The work the employee actually performs is often more limited than the work the contract states is required and it is for this reason that the issue has arisen. In Cowen v Haden Limited¹ the Court of Appeal stressed the relevance of looking at the employment contract to decide whether there was a redundancy situation. However, in the case of Safeway Stores plc v Burrell² the Employment Appeal Tribunal held that the employee's job is determined by the work the employee was actually doing (rather than the work the contract required him/her to do) and if the requirement for that work had ceased or diminished then the employee was redundant.

¹ [1983] ICR 1.

² [1997] ICR 523.

This point was considered by the House of Lords in Murray and another v Foyle Meats Ltd.¹ In this case, the employers were slaughterers and the employees worked as meat plant operatives. They normally worked in the slaughter hall but, under their contracts, could be required to work elsewhere and had, in fact, occasionally done so. Following criteria decided in consultation with the union, 35 employees from the slaughter hall were made redundant. The employees argued, however, that the selection pool should have been taken from the entire business, not just the slaughter hall. They contended that the requirement that there must be a diminution in the need for employees 'to carry out work of a particular kind' meant 'employees contractually engaged to carry out work of a particular kind'. Thus, since their contracts required them to work elsewhere in the company where needed, no distinction should have been drawn between those who worked in the slaughter hall and those who worked elsewhere. The House of Lords upheld the decision of the tribunal that the requirements of the business for employees to work in the slaughter hall had diminished and that this had led to the employees being made redundant – the selection criteria were correct. There was no reason why the dismissal of an employee could not be attributable to a diminution in the employer's need for employees, irrespective of the terms of his contract or the function he performed. The employees' claim was, therefore, dismissed.

¹ [1999] IRLR 562.

Similar questions have arisen with regard to the place of an employee's work. In High Table v Horst and others,¹ the employees had worked solely at one location despite the fact that their contracts contained mobility clauses. When the work at this particular location diminished, the employees claimed that they were redundant. The Court of Appeal held that the employees' place of work should be determined by reference to where they had actually worked rather than where the employees could be required to work under their contracts. The court will, therefore, look at factual reality rather than contractual possibility in determining the place of work for redundancy purposes.

¹ [1997] IRLR 513.

The employment tribunal is not in a position to decide whether an employer should have implemented redundancies if the employer states that redundancies were necessary because of the financial situation of the company. It is not for the tribunal to find that the employer could have dealt with the situation in a different way and avoided making people redundant. It was held in James W Cook & Co (Wivenhoe) Limited v Tipper¹ that the tribunal may, however, ask the employer to produce some evidence to show that redundancy was indeed necessary (eg details of accounts).

¹ [1990] IRLR 386.

Redundancy on Changing Working Hours

[C1.53]

It is possible, in the light of the statutory definition of redundancy, for a redundancy to arise where an employee's job is reduced to part-time and he/she does not want to work on that basis. Where a part-time role is expanded to a full-time one, however, a redundancy will almost certainly not arise.

In Barnes v Gilmartin Associates¹, the EAT ruled that a part-time secretary who refused to work full-time was not redundant when her employers dismissed her because they required someone to work in her position in a full-time capacity. Nevertheless, she had been dismissed fairly for some other substantial reason because the employers had reorganised their business.

¹ EAT 825/97.

'Bumped' Redundancies

[C1.54]

The case of Murray v Foyle Meats Ltd¹ also considers the matter of 'bumped' redundancies. It confirmed that even where Employee A's job disappears but he/she takes over Employee B's job and Employee B is dismissed, it will still be a dismissal by reason of redundancy.

¹ [1999] IRLR 562.

Fairness of the Dismissal

[C1.55]

Even if the employer can show that there was a genuine redundancy situation, a dismissal for redundancy may still be unfair. Where there is a redundancy situation, complaints of unfairness usually relate to:

grounds for selection; or

consultation.

The main redundancy case concerning fairness is Williams v Compair Maxam Limited.¹ The principles set out in this case have since been generally adopted by tribunals when considering redundancy cases. The steps are as follows.

An employer should seek to give as much warning as possible of impending redundancies so that the union and the employees can consider possible alternative solutions and alternative employment.

An employer should consult the union as to the best means by which the desired management result can be achieved with as little hardship to the employees. The employer should seek to agree with the union as to the criteria to be applied in selecting the employees to be made redundant.

The objective criteria should, as far as possible, be capable of being checked against such things as:

attendance record;

efficiency at the job; and

experience or length of service,

and should not purely depend upon the opinion of the person making the selection.

The employer should make sure that selection is made fairly in accordance with the criteria and consider any representations the union may make regarding selection.

The employer should consider whether there is any alternative employment to offer the employees.

¹ [1982] ICR 156.

While the guidance given in this case is still followed by tribunals, it should be noted that criteria such as experience or length of service could potentially be indirectly age discriminatory and employers should be careful in formulating selection criteria.

Where notice is given and the employee works his/her notice prior to the redundancy dismissal taking effect, the employer has a continuing obligation to consider the position during the notice period. Therefore, if any suitable alternative employment becomes available during that time it must consider offering the job to the employee.

Grounds for Selection

[C1.56]

The following reasons will be automatically unfair reasons for selection:

health and safety reasons;¹

a family related reason (to include pregnancy, maternity leave, adoption leave, parental leave, paternity leave or time off for dependants);²

for a specified reason in connection with applications for flexible working;³

the fact that the employee is an employee representative or trustee of an occupational pension scheme;⁴

a reason relating to the assertion of a statutory right;⁵

a reason relating to the fact that the employee is a shop worker or betting worker refusing to work on a Sunday;⁶

a reason connected with trade union membership⁷ or trade union recognition;

a specified reason related to working time;⁸

a specified reason related to the national minimum wage;⁹

where the reason or principal reason for selection is that the employee made a protected disclosure to an authorised person;¹⁰

for reasons relating to the collective bargaining procedure under ERA 1996, Sch 1, para 156;¹¹

for asserting the right to be accompanied at disciplinary and grievance meetings;¹²

for taking part in protected industrial action;¹³

for asserting the rights of part-time workers;¹⁴

for taking action to enforce rights under the Tax Credits Act 1999;¹⁵

for asserting the rights of fixed term employees;¹⁶

for being absent due to jury service;¹⁷

for a specified reason in connection with applications for time off for study and training;¹⁸

for a reason in connection with blacklists;¹⁹

in connection with exercising or seeking to enforce any right under the Companies (Cross-Border Mergers) Regulations 2007 (SI 2007 No 2974);²⁰ and

for a specified reason in connection with the European Cooperative Society (Involvement of Employees) Regulations 2006 (SI 2006 No 2059).²¹

¹ ERA 1996, s 100(1).

² ERA 1996, s 99.

³ ERA 1996, s 104C.

⁴ ERA 1996, s 102(1).

⁵ ERA 1996, s 104(1).

⁶ ERA 1996, s 101(3).

⁷ TULR(C)A 1992, s 152.

⁸ ERA 1996, s 101A inserted by the Working Time Regulations 1998 with effect from 1 October 1998.

⁹ ERA 1996, s 104A inserted by the National Minimum Wage Act 1998 with effect from 1 November 1998.

¹⁰ ERA 1996, s 103A inserted by the Public Interest Disclosure Act 1998 with effect from 1 July 1999.

¹¹ Inserted by ERA 1999, s 1.

¹² ERA 1996.

¹³ TULRCA 1992, s 238A.

¹⁴ Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000 (SI 2000 No1551), reg 7.

¹⁵ ERA 1996, s 104B.

¹⁶ Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002 (SI 2002 No 2034), reg 6.

¹⁷ ERA 1996, s 98B.

¹⁸ ERA 1996, s 108(3)(gk).

¹⁹ ERA 1996, s 108(3)(gl).

²⁰ ERA 1996, s 108(3)(p).

²¹ ERA 1996, s 108(3)(o).

In the absence of one of the specific reasons mentioned above, an employee may try to show that the reasons for selection were not objectively fair or that, with the use of objectively fair reasons, some other person should have been selected rather than that particular employee.

Objective reasons for selection are likely to include:

performance;
skills;
qualifications;
disciplinary record;
time-keeping and punctuality;
attendance record.

If the criteria adopted are discriminatory (directly or indirectly) (see [A2.4], [A2.11] and [A2.13] above), they will not be objectively fair. For example, reliance on attendance records could discriminate against someone with a disability or a female carer (whether responsible for her own children or for an elderly or disabled person).

It would be wise, for example, to discount any periods of absence which were due to a disability covered by the EqA 2010 when calculating the levels of people's attendance. There would, however, be no reason to discount periods of absence not related to a disability covered by the EqA 2010.

In order to ensure objectivity, the criteria are often measured on a score system so that there is evidence showing the ratings of those that were retained as compared with those made redundant.

Disclosure of Selection Criteria

[C1.57]

The EAT in Alexander v Brigden Enterprises¹ held that the employer should notify the employee of the selection criteria used and the employee's own assessment based on that criteria. This particular case dealt with what the employer was required to disclose in order to comply with the statutory disciplinary and dismissal procedure. Although this procedure has now been repealed the principle that this information should be provided to an employee remains valid.

¹ [2006] IRLR 422.

Depending on the particular situation it may be necessary to provide the following information in order to ensure a fair procedure is followed:

the mark which the employee would need in order to remain in employment; or

the assessments for other employees; or

specific guidelines used by management in the assessment exercise.

Although this information need not be disclosed, it may be that failure to provide it in a particular circumstance would render the dismissal unfair. Further, if an employee challenges the fairness of the selection process through the employment tribunal, an employer is likely to have to disclose the results of all assessments.

Suitable Alternative Employment

[C1.58]

An employer should consider whether there is suitable alternative employment to offer to a redundant employee. A failure to do so may affect the fairness of the dismissal. Further, if an employee who is being made redundant unreasonably refuses an offer or suitable alternative employment, he/she will not be entitled to a redundancy payment (see further [D1.23] below).

Consultation

[C1.59]

Consultation is dealt with in greater detail at [C2.76] below. (See also [A2.3] above.) However, it is important to note here that employees have a right to be individually consulted about a proposed redundancy. There may also be an obligation to collectively consult where a significant number of redundancies are anticipated.

Statutory Redundancy Payment

[C1.59A]

Employees with two or more years of continuous service are entitled to a minimum statutory redundancy payment. Time spent employed outside of Great Britain does not count towards continuity for these purposes unless National Insurance Contributions remained payable. Employees who refuse suitable alternative employment are not entitled to a statutory redundancy payment. The statutory redundancy payment is calculated in the same way as the basic award in unfair dismissal claims (see [D1.35]and D1 – appendix below).

Key Points to Remember

[C1.60]

Redundancy is a potentially fair reason for dismissal but it must fall within the statutory definition.

A dismissal for redundancy may nevertheless be unfair on grounds of unfair selection or lack of/insufficient consultation.

The employer must have a fair reason for selecting a particular employee for redundancy. Some grounds for selection will be automatically unfair (eg pregnancy, the fact that the employee is an employee representative, etc).

Employers must be careful when selecting for redundancy on the basis of discriminatory criteria.

The employer must follow the correct consultation procedures. Employees have a right to be individually consulted regarding a proposed redundancy. The employer may also be obliged to consult collectively with the trade union or elected representatives.

If an employee with two years' service is dismissed for redundancy, he/she will be entitled to a redundancy payment, calculated in the same way as a basic award. See[D1.35] and D1 – appendix below.

Not Fitting In

[C1.61]

Occasionally, an employer may find an employee who does not fit in with the rest of the workforce. They may be ostracised and do not function as part of the team. They may not conform to the same standards of tidiness, dress or attendance. The problem may fall short of grounds to dismiss for conduct or performance but can demotivate others in the same team who feel the individual is not pulling his/her weight or is just irritating to have around.

An employer would need to be extremely careful in such circumstances not to dismiss an employee for a reason which related to the other employees' discriminatory attitudes. An employee may not fit in with the rest of the workforce for reasons which relate to their sex, sexual orientation, race, religion, national origin, age or the fact that they have a disability.

An employer should ascertain what the problem is and why the employee is not working well with the rest of the workforce. It may be that the other employees need training to show how the employee can be accommodated.

If the reason is that the employee is ostracised for some particular eccentricity of the employee, it would still be difficult for an employer to dismiss the employee fairly unless it is having some impact on their productivity. In the case of Treganowan v Robert Knee and Co Ltd,¹ however, Ms Treganowan fell out with the other women that she worked with in an office. The atmosphere was described as being so tense that the system of working had broken down and it was affecting the business. The decision to dismiss was held to be valid and for some other substantial reason.

¹ [1975] IRLR 247.

Other cases have shown that the employer must demonstrate prior to dismissing that the situation is not capable of remedy.¹ Therefore, prior to dismissal, the employer should try counselling and investigate possibilities of relocating an employee. In cases where difficulties of this nature arise, it would be sensible to have a counselling meeting with the employee in the first instance to discuss any concerns he/she may have themselves about his/her failure to get on with the rest of the workforce. The employer should also consider the possibility of moving an employee to a different department where this is an option and he/she may get on better with other employees.

¹ Turner v Vestric Ltd [1981] IRLR 23.

Employers need to be very careful in dealing with any issues arising from transsexualism and transvestism. From 1 May 1999, the Sex Discrimination Act 1975 was amended to provide protection for persons who 'intend to undergo, are undergoing or have undergone' gender reassignment. This amendment follows the case of P v S and anor¹, in which a male school teacher started to attend work dressed as a woman prior to undergoing gender reassignment surgery. He was dismissed by his employer and brought a case under the EU Equal Treatment Directive². The ECJ held that the Directive covered protection for those who had undergone or who were undergoing gender reassignment as discrimination against such persons was essentially based upon the sex of the person concerned.

¹ [1996] ICR 795.

² No 76/207.

Therefore, employers are not permitted to discriminate against such persons and should ensure that employees understand the position. The EqA 2010 now provides this protection, having replaced the Sex Discrimination Act 1975. Transvestism is not covered. However, if a transvestite suffers discrimination or harassment because it is perceived that he/she is a transsexual, the provisions of the EqA 2010 would provide protection.

Key Points to Remember

[C1.62]

An employer should be careful when dismissing an employee who simply does not 'fit in', to ensure that the objection to the employee is not connected with the employee's age, sexual orientation, sex, race, religion, nationality or disability. If so, those who object may be subject to disciplinary action.

The other employees in the workplace may have to make some concessions or be trained to accommodate the ostracised employee.

In order to justify dismissal of an ostracised employee, the employer will have to prove that the fact that the employee has been ostracised from the workforce has had a negative impact on productivity.

The employer should, therefore, consider counselling and look into the possibility of transferring the employee although this should be done with the employee's consent.

Refusal to Perform Changed Duties

[C1.63]

An employee should have the duties that he/she is expected to perform set out in his/her contract of employment. If the duties are not set out as such, the contractual duties could, depending on the circumstances, be held to be the duties that the employee performs on a regular basis. Like any other term of a contract of employment it cannot be varied unilaterally. Therefore, if an employer wants the employee to perform different duties, the employee needs to agree to the change.

Sometimes the contract of employment will specifically allow the employer to occasionally give the employee other duties or to vary them. The specific term would be subject to an implied duty of reasonableness – thus, an employer could not require an employee to perform duties which were of a much lower status or a much higher degree of difficulty without specific agreement. The reason why the employer needs to change the employee's duties will also be taken into account by a tribunal, provided that the reason is communicated to the employee.

If the employee refuses to perform the changed duties it is only likely to be held to be sufficient grounds for dismissal if the change is not major and the employer has a right to alter the duties or the employer has a very good reason why they need to facilitate the change – for example, a change in the general method of working or a need for employees to cover other duties in a reorganisation situation because of the financial position. The employee should also have been duly warned that a failure to agree to a change is likely to result in dismissal. If necessary, the employee should have been taken through the disciplinary procedure.

Refusal to Retrain

[C1.64]

A refusal to retrain will be considered in the same way as a refusal to accept a change in terms and conditions (see below at [C1.66]). Retraining may be offered where an employer is changing its method of working. The issue may be related to a redundancy situation (see [C1.52] above). Where the employee's original duties are disappearing, an employer may offer to retrain the employee to perform a new task. If this new position, with training, is considered to be 'suitable alternative employment' by an employment tribunal and the employee does not have a good reason to turn the offer down, then a refusal can lead to the employee losing the right to a redundancy payment.

Key Points to Remember

[C1.65]

The contract of employment should set out the employee's duties. In the absence of express provisions, the duties could be held to be those duties the employee performs on a regular basis.

If an employee refuses to perform changed duties as requested by the employer, it is only likely to be a sufficient ground for dismissal if the change is not major and the employer has a right to alter the duties or if there is a very good reason to implement the change.

The employee should have been given due warning of the proposed change in his/her duties.

A refusal to retrain is likely to be considered in the same way as a refusal to accept a change in terms and conditions.

The employee may be dismissed for a contravention of company policy, such as contravening an equal opportunities policy.

The Public Interest Disclosure Act 1998 gives employees the right to inform on their employer's bad working practices provided the disclosure is for the public gain and the disclosure is in good faith.

Failure to Agree New Terms and Conditions

[C1.66]

A dismissal of an employee who has refused to agree new terms and conditions can be a dismissal for 'some other substantial reason'. This applies:

where the employee is dismissed for refusing to agree to the new terms and conditions;

where the employee claims constructive dismissal (see [B2.3] above);

where the employee is dismissed and offered new terms; and

where the employer imposes the terms and there is a deemed dismissal and re-employment on the new terms.

In the case of Alcan Extrusions v Yates¹, the employers imposed a continuous rolling shift pattern. The employers disputed that this imposition terminated the contract of employment. The EAT held that the imposition of a continuous rolling shift system in place of the traditional shift system provided for in the employees' contracts of employment constituted a termination. Whether the departure from the original contract is so substantial as to amount to the withdrawal of the whole contract is a matter of fact and degree for the employment tribunal to decide.

¹ [1999] IRLR 327.

Generally, if an employer wishes to change an employee's terms and conditions of employment, the terms may only be changed with the consent of the employee.

In the case of Catamaran Cruisers v Williams¹ it was established that there is no principle of law that the dismissal of the employee for refusing to accept new terms will be unfair unless the business reasons are so pressing that it is vital for the survival of the employer's business that the new terms are accepted. In considering the reasonableness of dismissals in the circumstances, the employment tribunal should carry out a balancing exercise with regard not only to the advantages or disadvantages of the new contracts from the employee's point of view but also the benefit which would accrue to the employers in imposing the changes. Essentially, therefore, commercially sustainable arguments for introducing the changes should form the basis for a fair dismissal.

¹ [1994] IRLR 386.

Whether the dismissal (or constructive dismissal) is fair will depend upon:

the circumstances necessitating the change;
the difficulty caused by the employer operating with two sets of employees on different terms and conditions of employment; and
whether sufficient consultation took place with the employees.

Where the workforce is unionised, the tribunal will also take into account whether the union had accepted the change in terms and whether there had been sufficient consultation with them.

An employer will need to be particularly careful in attempting to change terms and conditions of employment following a transfer of an undertaking under the Transfer of Undertakings (Protection of Employment) Regulations 2006¹ ('TUPE'). The House of Lords considered together two cases involving this point, British Fuels v Meade and Baxendale and Wilson & ors v St Helens Borough Council.² Both cases involved a change to terms and conditions following a transfer, although the circumstances of each were different.

¹ SI 2006 No 246.

² [1998] IRLR 706.

If the purchaser substantially changes the terms and conditions of employment of the employees who have transferred they can resign and treat themselves as constructively dismissed by reason of the transfer (Rossiter v Pendragon plc¹).

¹ [2000] ICR 1063.

The outcome of the cases is that:

a dismissal for failure to agree changes in terms and conditions is potentially fair where the employer is able to show an 'ETO' (economic, technical or organisational – see [A2.16]above) reason entailing a change in the workforce;
a dismissal will be unfair where the employee cannot show such an ETO reason; and
it is possible for the parties to agree new terms only if the sole or principal reason for the change is unconnected to the transfer.

Key Points to Remember

[C1.67]

Generally, an employee's terms and conditions of employment may only be changed with the consent of the employee concerned.

If the terms being changed are not fundamental terms, the employer may be able to change them without a claim for constructive dismissal arising.

Varying fundamental terms unilaterally can result in an unfair dismissal either because the employee is deemed to have been dismissed and re-employed on the new terms or because the employee claims to have been constructively dismissed.

Dismissing employees and offering them new but different terms from those on which they were previously employed will potentially give rise to unfair dismissal claims.

The fairness of any of these dismissals will depend on the reason for introducing the variations concerned, whether other employees have consented to the variations and if so, how many, and whether sufficient consultation took place.

Particular care must be taken when seeking to change terms and conditions of employment following the transfer of an undertaking.

Health and Safety

[C1.68]

ERA 1996, s 100(1)(d) states that an employee who is dismissed by his/her employer on the ground that in circumstances of danger which the employee reasonably believed to be serious and imminent and which he/she could not reasonably have been expected to have worked, he/she left (or proposed to leave) or (while the danger persisted) refused to return to his/her place of work or any dangerous part of his/her place of work shall be regarded as automatically unfairly dismissed. There is no qualifying period of employment before a claim may be brought under this section.

There is specific statutory protection afforded to employees in relation to certain health and safety matters. ERA 1996, s 44 provides that the employee has the right not to be subject to any detriment by any act or any deliberate failure to act by his/her employer on specified health and safety grounds. Under ERA 1996, s 100 a dismissal will be automatically unfair if the reason or principal reason for dismissal was within the protected health and safety grounds which are as follows:

(a) that the employee has been designated by the employer to carry out activities in connection with preventing or reducing risks to health and safety at work and that he/she carried out or proposed to carry out any of those activities;

(b) that the employee is a representative of employees on matters of health and safety at work or a member of a safety committee established under or by virtue of any enactment and that he/she performed or proposed to perform any of his functions in that capacity;

(c) that the employee took part or proposed to take part in consultations with the employer pursuant to the Health and Safety (Consultation with Employees) Regulations 1996¹ or in the election of representatives in employee safety;

(d) that the employee has brought to his/her employer's attention circumstances connected with his/her work which he/she reasonably believed were harmful or potentially harmful to health and safety and where there were no health and safety representatives at the site or where it was not practicable to raise the matter via the safety committee or representative;

(e) that the employee left or proposed to leave his/her place of work or any dangerous part of the workplace in circumstances of danger which he/she reasonably believed to be serious and imminent and which the employee could not reasonably have been expected to avert or where the danger persisted, he/she refused to return to the workplace or any dangerous part of it; or

(f) that the employee took or proposed to take appropriate steps to protect him/herself or other persons in circumstances of danger which he/she reasonably believed to be serious and imminent

¹ SI 1996 No 1513.

For example, in the case of Goodwin v CableTel¹ Mr Goodwin was a construction manager. As part of his duties he had to ensure that sub-contractors complied with health and safety legislation. Mr Goodwin was particularly concerned at the activities of one contractor. However, CableTel did not wish to take as strong a line on the issue as he did. Mr Goodwin was demoted following a number of acrimonious meetings. Mr Goodwin claimed constructive dismissal and automatic unfair dismissal because he claimed that he was dismissed because of his health and safety activities. The employment tribunal held that the dismissal could not be held to be because of his health and safety activities but rather because of the way in which he carried them out. The EAT rejected this approach and said that the employment tribunal should consider whether the manner in which the employee approached his concerns took him outside the scope of health and safety activities. The case was referred back to a new employment tribunal to be determined.

¹ [1997] IRLR 665.

However, in Shillito v Van Leer (UK) Ltd,¹ Mr Shillito, a senior shop steward for the Transport & General Workers Union and a forklift truck driver, was the union appointed health and safety officer for line 8. The employees at the factory where he worked complained that the solvent on line 6 was giving off an odour. The line was shut down and the matter was reported to Mr Shillito by the health and safety officer for line 6. Mr Shillito took over matters and did not follow the agreed safety procedures. He insisted that all the affected employees should be seen by a company doctor and/or be sent to a hospital. Because of the way he handled the incident, Mr Shillito was subject to a disciplinary hearing and a finding of misconduct was upheld against him. Mr Shillito said that he had suffered a detriment as a result of his health and safety responsibilities.

¹ [1997] IRLR 491.

The employment tribunal dismissed his claim, stating that as a health and safety officer for line 8 rather than line 6, the action which he took was outside his duties. The Employment Appeal Tribunal held that the employment tribunal should consider whether the employee was subjected to a detriment because he/she was performing the function of health and safety representative. In this case, they found that the employment tribunal was entitled to find that the reason for his taking the action which he did was because of the fact that he was a shop steward rather than a health and safety representative.

It should be noted that even where a particular situation is stated to be safe by the Health and Safety Executive (HSE), dismissal of an employee for failing to work may still be unfair. This was the case in Piggott Brothers & Company Limited v Jackson¹ where the employers had managed to have their production process passed by the HSE by improving the ventilation. However, they had not established which part of the process had been poisonous to the employees and thus the tribunal held that it would have been reasonable for the employer to carry on and make further investigations in order to satisfy the concerns of the employees.

¹ [1991] IRLR 309.

Even where the workplace or work process itself is not inherently unsafe there may be a health and safety related reason for an employee's actions. In the case of Harvest Press Ltd v McCaffrey¹ a worker on the night shift walked out because he was frightened by the abusive behaviour of his work colleague. He was dismissed. The EAT held that it was automatically unfair becaue he was dismissed for leaving his post in dangerous circumstances.

¹ [1999] IRLR 778.

Remedies

[C1.68A]

The employee can make a complaint to an employment tribunal under one of the grounds set out in ERA 1996, s 100 within three months of the effective date of dismissal, though the tribunal has a discretion to hear cases after the time limit where it was not reasonably practicable for the employee to present the claim in time. For those employees dismissed under categories (a) and (b) (at [C1.68] above), the employee can also apply for interim relief against dismissal but this application must be made within seven days of the effective date of dismissal (see [C1.98C] below for further details of this remedy).¹

¹ ERA 1996, s 128.

Where an employee appointed by the employer, the union or elected by other workers to act as an employee representative (ie categories (a) and (b) at [C1.68] above) is successful in his/her unfair dismissal claim the amount of the basic award (before any reduction is made on the grounds of contributory conduct or any other statutory ground) is subject to a minimum figure of £5,000.¹

¹ Figure effective from 1 February 2011: Employment Rights (Increase of Limits) Order 2010 (SI 2010 No 2926).

For any employee dismissed on the grounds specified in [E1.68] below, the maximum limit on the compensatory award will not apply. An unfairly dismissed applicant may therefore be awarded compensation which reflects his/her total loss resulting from the dismissal.¹

¹ ERA 1996, s 124(1A).

The tribunal's powers to order an additional award if the employer fails to comply with an order for reinstatement or re-engagement are as for ordinary unfair dismissal cases (see D1: remedies for further details).

Key Points to Remember

[C1.69]

The dismissal of an employee will be automatically unfair if he/she was designated by the employer to carry out health and safety functions or was a representative of the employees on health and safety matters and the reason for the dismissal was that the employee carried out those health and safety functions.

Protection is also provided to employees who bring health and safety matters to their employer's attention where there are no health and safety representatives.

It will be an unfair dismissal if the employer dismisses an employee for refusing to work in a place where he/she has reasonable belief that he/she is in serious and imminent danger.

Even if declared safe by the HSE, dismissal of the employee for failing to work may still be unfair.

Company Policies

[C1.70]

Contravention of other company policies may amount to a reason for dismissal depending on the seriousness of the consequences. For example, a contravention of the company's equal opportunities policy may be stated to be a matter of gross misconduct giving the employer grounds to dismiss. It will still be a question of degree as to whether dismissal is reasonable or whether warnings are more appropriate. However, contravention of a policy on dress and appearance is more likely to be considered a matter acquiring a warning and only after repeated contravention and a warning that a dismissal will follow is a dismissal likely to be held to be fair.

Other policies where contravention may have serious consequences are a health and safety policy or a fire policy. It is important if an employer may wish to dismiss for contravention of a company policy that it is stated to be an offence in the company's disciplinary procedure.

Smoking Policies

[C1.71]

The general position under the Health Act 2006 is that as of July 2007 smoking in places of work is prohibited. This applies to premises/areas of premises which are enclosed or substantially enclosed and which are used as a place of work by more than one person or where members of the public receive goods or services.

The Smoke-free (Premises and Enforcement) Regulations 2006 define 'enclosed' and 'substantially enclosed' as follows:

'Enclosed' – where an area has a roof or ceiling and except for doors, windows and passageways, is wholly enclosed.

'Substantially enclosed' – where an area has a roof or ceiling but there are openings in the walls, the aggregate of which is less than half of the area of the walls or other structures that serve the purpose of walls enclosing the area (excluding windows and doors).

Under the Regulations, employers are required to display an A5 sign in a prominent position at the entrance to all smoke-free premises. The sign must show the no-smoking symbol and the words 'No smoking. It is against the law to smoke in these premises'.

It is an offence to:

knowingly smoke in a smoke-free area and anyone doing so could face a fine of up to £200 or a penalty notice of £50;

fail to display a 'no smoking' notice in smoke-free premises. This could result in a fine of up to £1,000 for the owner or manager; and

fail to ensure premises are smoke-free, and owners and managers will be personally liable for a fine of up to £2,500.

Employers need to consider how they will react to a contravention of the policy (see also [B2.28] above). As usual, it is extremely important to set out in both the smoking policy and disciplinary policy what action may follow a contravention. Although the cases below were decided prior to the enactment of the smoking ban, they do provide some important guidance for employers. It is now more likely for a dismissal for breaching a smoking policy to be fair as a breach by an employee will result in an employer being in breach of its obligations. However, employers do need to ensure that handbooks and policies are updated to make it clear that breach of the policy will result in dismissal. An early case on the subject held that it was unfair to dismiss an employee for smoking where, under the terms of his contract of employment, a smoking offence resulted in a warning.¹ This case was complicated by the fact that a poster had been put up stating that any person caught smoking in a no-smoking area would be dismissed for gross misconduct. However, the terms and conditions of employment which were issued after the poster had been put up stated that the offence would only carry the penalty of a warning.

¹ Trusthouse Forte (Catering) Limited v Adonis [1984] IRLR 387.

In the case of Marks & Spencers v O'Connell,¹ Mr O'Connell was employed by Marks & Spencers, where there was a no-smoking policy which prohibited smoking except in the staff lounge or the roof garden. The policy also stated that failure to comply with the regulations would result in summary dismissal.

¹ EAT 230/95.

Mr O'Connell worked as a security guard and on 23 September 1995 worked extra hours where contractors were employed to install new escalators. The installation involved the entrance to the shop being kept open. Mr O'Connell's job was to ensure that members of the public could not gain access to the shop. Between the pavement and the doors was a tiled area. Mr O'Connell was seen by a security camera lighting up in this area. Mr O'Connell was summarily dismissed. Marks & Spencers' divisional personnel controller gave evidence at the employment tribunal hearing that there was no exception to a dismissal for such a breach of the smoking policy. The employment tribunal considered that contractors and members of the public could smoke where Mr O'Connell did and that on the night in question he worked long hours and would have had limited opportunity for a break. They also considered that, although technically part of Marks & Spencers' property, it was not, strictly speaking, in the store.

The employment tribunal went on to say that the fact that an employer's regulation specifically states that dismissal should occur, does not mean that dismissal will always be the reasonable response. The tribunal held that the dismissal was unfair and this decision was upheld by the EAT.

In Waltons & Morse v Dorrington,¹ Mrs Dorrington, a non-smoker, was moved to a work-station where she was bothered by other employees' smoke. She complained and a new smoking policy was introduced but it did not reduce the level of smoke in her area. She complained further several times and was eventually told to put up with the smoke or leave. She left and claimed unfair constructive dismissal. The EAT upheld the tribunal's decision that she had been unfairly dismissed. The employer had breached its implied contractual duties to provide a suitable working environment and to afford employees a prompt and reasonable grievance procedure.

¹ [1997] IRLR 488. See also [B2.28] above.

Computer Abuse

[C1.72]

A dismissal for computer abuse would be a dismissal for conduct.

Computer abuse can take various forms:

misuse of the system without deliberate intent to cause damage; or

deliberate damage to the system.

Even if an employer does not have an express policy governing the use of computers, if the employer can show damage to hardware or software, then the issue may be treated as a matter of misconduct, with an appropriate investigation and disciplinary hearing dealing with the issues.

An employer should have a policy concerning the use and abuse of its computer system which should set out what disciplinary sanctions will be imposed. An employer's disciplinary procedure should make it clear that breach of the computer policy is a disciplinary matter.

Further, following implementation of the Data Protection Act 1998, employers are under obligations to process data in accordance with its terms. These obligations will need to be communicated to relevant employees and should therefore form part of any computer/email or confidentiality policy.

One of the main concerns of employers is the receipt and forwarding of e-mails which probably originate from outside the organisation. One of the problems with the receipt and further transmission of such e-mails is that they may possess viruses which can damage the system. Moreover, whether e-mails are passed around or originated by the employer's own employees:

employees can spend a considerable part of their working day reading and transmitting such e-mails;

the forwarding or originating of e-mails with pornographic or crude content may amount to sexual harassment of the recipient – see [C1.73] below;

e-mails can breach copyright or be defamatory with potential resulting legal liability on the employer even though it was an employee who forwarded them on or originated them; and

the reputation of the employer or employee may be damaged as a result of all or any of the above.

In recent years a number of high-profile examples of the unintended consequences of forwarding emails have hit the headlines. In 2000 a number of employees at a London law firm were disciplined after forwarding copies of an email containing smutty jokes and a sexual remark. The email was circulated so widely that it spread to numerous law firms in London and even beyond the UK. What began as an initial exchange between friends spiralled out of control and caused the firm and the employees considerable embarrassment.¹ In 2005 there was the infamous email from a senior lawyer to a secretary requesting £4 to cover the cost of dry cleaning to remove some splashes of ketchup she had got on his trousers and her sarcastic response. The email exchange between the two was circulated to numerous people within the firm and from there externally, again causing the firm and employees involved considerable embarrassment.²

¹ 'Email woman in hiding', news.bbc.co.uk, 16 December 2000.

² 'Ketchup Email leaves lawyers reputation stained', ThisisLondon.co.uk, 17 June 2005; 'Ketchup stain sparks email flurry', www.cnn.com, 17 June 2005.

Tribunals have viewed such cases in different ways. In the case of Parr v Derwentside District Council,¹ Mr Parr was dismissed by his employer for gross misconduct after they discovered that he had used his computer at work to access pornographic images. His defence was that he had accessed the site by accident and had revisited it because he was disturbed that children could easily stumble across it. The employer did not believe his story and dismissed him. The tribunal upheld the dismissal on the grounds that the employer had carried out a thorough investigation and had decided that Mr Parr was guilty of violating established codes of conduct and of breaching trust and confidence.

¹ Unreported, 23 September 1998 (Case No 2501507/98).

However, in the case of Dunn v IBM United Kingdom Ltd,¹ Mr Dunn was dismissed for misusing company assets by accessing pornography and other non-business material via the Internet. When challenged about this, he admitted it and was summarily dismissed. The tribunal held that this was not a case where there was indisputably a breach of company policy and Mr Dunn had made the admission without realising the disciplinary consequences of his actions. Accordingly, the tribunal held that Mr Dunn had been unfairly dismissed but his compensation was reduced by 50% to take account of his contributory conduct.

¹ Unreported, 1 July 1998 (Case No 2305087/98).

Another problem is the misuse of passwords. Employers should make it clear that passwords should be kept confidential and that people should not be using other people's passwords. This matter should be specifically a disciplinary offence.

The employer should have a clear policy about downloading material from the Internet which should be strictly limited to the material the employee needs to carry out his/her duties under the contract of employment.

Where an employee uses their own computer at home for transferring, say, pornographic material, it is unlikely to be a matter for the employer's disciplinary procedure unless it can be shown that its use has brought the company into disrepute, for example, transmitting such material to other employees or a customer.

Although it is preferable to be quite specific in any computer policy about what is and what is not allowed, an early case held that a dismissal for unauthorised use of a computer was a dismissable offence even where there was no specific rule prohibiting it.¹

¹ Denco Limited v Joinson [1991] IRLR 63.

There have been several cases involving unauthorised access of computer systems. In the case of Denco Ltd v Joinson¹, the EAT upheld a dismissal where an employee gained access to parts of a system for which he did not have access through his daughter (who worked for the same company) giving him a password. Mr Joinson had only been playing with the system and the EAT acknowledged that his motives were not malicious. However, they stated that if an employee deliberately uses an unauthorised password to enter a computer system known to contain information which is confidential and to which the employee does not have access this will constitute gross misconduct. The EAT went on to point out that employers should make it clear in their policies that any unauthorised access will carry severe penalties.

¹ [1991] ICR 172 (EAT).

In the case of British Telecom plc v Rodrigues,¹ Mr Rodrigues was dismissed for accessing material for legitimate work-related purposes but for which he was not specifically authorised. The tribunal upheld Mr Rodrigues' complaint as did the EAT, who went on to point out that, although BT's computer policy emphasised the importance of security, neither their disciplinary code nor any other computer literature had made it clear that incidents of computer misuse would automatically result in summary dismissal.

¹ Unreported, 20 February 1995 (EAT 854/92).

As more and more workplaces give wider numbers of employees access to the computer system, an employment tribunal will expect employers to have considered the possibilities and to have formulated their requirements in policy form and ensured that this is communicated effectively to the workforce. Those with clear policies will be in a better position to discipline and ultimately dismiss employees for breach of those policies.

Key Points to Remember

[C1.73]

In order to enforce breaches of smoking policies the policies should specify the employer's response to breach of the policy. Even if the policy provides that a breach may result in dismissal, dismissal may nevertheless be unfair. Each case will depend on its own facts.

Employers should have policies governing the use and abuse of computer systems.

The receipt and transmission of e-mails can be a real problem if the system is abused. Employers will be in a better position to discipline and ultimately dismiss employees if there has been a clear breach of the employer's policy.

Drug and Alcohol Dependencies

[C1.74]

Excessive drinking and drug taking are growing problems for society in general and employers in particular. In recent years, organisations like Alcohol Concern, the Institute for Study of Drug Dependence (ISDD) and the Institute of Personnel and Development have done much to draw attention to employees' alcohol and drug problems. There is four times more absenteeism and sickness among drinkers than other workers. 20% of workplace accidents and 60% of fatal ones are alcohol related.

Alcohol abuse undoubtedly affects employees' performance at work leading to lost competitiveness, a failure to win contracts and reduced customer care and satisfaction, in addition to putting the health and safety of other employees at risk. Excessive alcohol consumption is surprisingly common at work and affects 30% of working men and 18% of working women.

The report 'Drink, Drugs and Work Don't Mix' by Alcohol Concern and the Institute for the Study of Drug Dependence finds that most people who have a drinking problem are in work as are 25% of those seeking help for problems with drugs.

The Chartered Institute of Personnel Development reported that 46% of large companies said alcohol misuse was a problem at work while 18% reported illegal drug use by their employees.

Facts and figures with regard to drug abuse are more difficult. There are no accurate figures for illegal drug use. Recent Home Office research has identified that growth in the use of soft drugs and seizures of these has risen sharply.

Drugs To Be Aware Of

[C1.75]

DRUG

EFFECT

Cocaine

Damage to lining of nose (through sniffing).

Breathing problems and chest pains (when smoked).

Anxiety, paranoia.

Risk of dependence.

Ecstasy ('E')

Effects not yet fully understood.

Causes depression, panic, anxiety, possibly brain damage.

Kidney and liver damage, internal bleeding.

Permanent red marks left on the skin.

Amphetamines

Heart rate dramatically increased and can lead to heart failure.

Risk of psychotic mental illness.

Increases blood pressure, red spots on face, liver damage.

Risk of dependence.

LSD ('Acid')

Alters perception.

Hear, feel and taste things that are not there.

Distorts vision, can permanently damage eyesight.

Can trigger serious mental illness.

Flashbacks without warning at any time years after original trip.

Cannabis

Impairs concentration and memory.

Increases accidents.

Risk of dependence.

Signs of Alcohol and Drug Abuse

[C1.76]

The following are common signs of drug and/or alcohol abuse:

absenteeism;

poor timekeeping;

deterioration in personal presentation;

deteriorating job performance;

tendency to get confused;

fluctuation in mood and energy;

deterioration in employee relations;

irritability and possible violence;

increased risk of sexual harassment.

Traditionally, employers have approached alcohol and drug abuse in one of two ways. They have either turned a blind eye and moved employees to less sensitive areas (particularly the case with alcohol abuse) or, alternatively, they have simply dismissed employees.

Now, however, it is more common for employers to be treating alcohol and drug abuse sympathetically and offering treatment and rehabilitation so as to retain employees. Such an approach is detailed in formal alcohol and drug policies.

If an employer wishes to devise a policy, it should encourage employees with alcohol and drug problems to seek help and provide or signpost help and professional advice. The policy should explain to employees that if they refuse help and/or their impaired performance continues, then disciplinary action is likely which could lead to dismissal. It should explain that dismissal action may be taken if employees commit an act of gross misconduct and it should state that drug trafficking will be reported immediately to the Police.

In the UK, employers have no implied legal right to test for alcohol or drugs or search employees suspected of possessing alcohol or drugs at work without that employee's consent. Employers should, therefore, also consider introducing screening arrangements as part of such policies. Screening of employees is not common in the UK other than with employers that are subject to the Transport and Works Act 1992.

It should be noted, however, that some drugs are detectable for up to two or three months after consumption. It is, therefore, much easier to detect casual drug users than occasional heavy drinkers.

Drug and alcohol policies need to be incorporated into contracts of employment – to secure the employees' agreement to be screened and searched for drugs or alcohol.

As regards cases of long-term alcoholism and drug addiction, these are treated as serious illnesses. As such, employers should take reasonable steps to investigate the employee's true medical condition and the prospects for their rehabilitation before they decide whether or not the employee should be dismissed. (See [C2.58] below.)

The HSE publish guidelines called 'Don't Mix It – Alcohol and Work'. They state that disciplinary action should be a last resort. Tribunals may find dismissal unfair if there has been no attempt to help an employee with a drink or drugs problem. Equally if an employer does nothing they are likely to be in breach of the Health and Safety at Work Act 1974 both in relation to their duty to the employee concerned or their colleagues who may be adversely affected by their impaired performance.

Although alcohol and drug addiction (save for addiction to prescribed drugs) are specifically excluded from the definition of disability under the terms of the EqA 2010, an employer still needs to be careful in looking at a dismissal situation. In the case of Power v Panasonic UK Ltd¹ the EAT held that the Tribunal had erred in holding that an employee's depression which may have been caused by alcohol abuse was not a disability. The fact that the depression may have been caused by an excluded condition was not relevant.

¹ [2003] IRLR 151.

Misconduct Under the Influence of Drink and Drugs

[C1.77]

Where alcohol or drug abuse results in misconduct, the situation is different. Such misconduct could arise where employees recklessly or deliberately break company rules or acceptable standards of conduct, for example, if they are drunk at work or they are in possession of drugs at work. Such misconduct usually amounts to serious misconduct and justifies fair dismissal provided the employer satisfies the Burchell test (above at [C1.1]). The investigation into the misconduct should, however, also include the obtaining of medical advice. The obtaining of such medical advice is recommended by ACAS.

Difficulties for employers occur when it is not clear if drug abuse or alcoholism should be treated as an illness or misconduct. It is important that employers are clear as to which one they are dealing with because the legal steps to be taken by employers are different.

If employees refuse treatment and the misconduct continues as part of the illness then employers can get to a stage where they are entitled to fairly dismiss the employee. This can occur provided the employer:

is aware of the absence record and the reasons for such absence;

follows a fair procedure by giving the employee the opportunity to explain his/her absences;

gives warnings relating to the problem as to the disciplinary action that will be taken if there are future absences; and

obtains medical advice about the drug/alcohol situation with regard to the employee to satisfy itself that nothing more can reasonably be done.

As regards drug abuse, drug addiction (like alcoholism) should, in theory, be treated as an illness. However, in most employment tribunals, drug-related dismissals are treated as misconduct issues. The main reason for this is that, while clinical dependency on hard drugs (eg heroin) is dealt with as an illness, statistically, most drug abuse at work involves soft drugs, the use of which is less likely to be due to clinical dependency and, therefore, there is no illness. However, even soft drug abuse can result in dependency and so employers should be careful when investigating such soft drug abuse to be aware of the possibility of dependency – an investigation will be needed to establish whether dependency is involved and whether the employee should be treated as having an illness rather than just having committed an isolated act of misconduct.

Nevertheless, even in such misconduct cases, in order for employers to show that the dismissal for drug abuse was fair, they will have to satisfy the Burchell test (above at[C1.1]) and again they should give the employees a chance to explain themselves. The employer's reasonable investigation should include obtaining medical advice.

It should be noted that drug addiction is specifically excepted from the provisions of the EqA 2010 unless the drugs have been clinically supplied.

In the case of Walton v TAC Construction Materials Limited,¹ the employee failed to disclose to his employers that he was a registered drug addict. His employers had a policy against employing drug addicts and the employee was, therefore, dismissed. It was held that a dismissal of an employee in pursuance of a company policy not to employ drug addicts was within the range of reasonable responses (see [C2.5] below). It was unnecessary to decide whether it was reasonable to dismiss for non-disclosure of his addiction on his application form.

¹ [1981] IRLR 357.

In the case of Anderson and Chambers v Oak Motor Works Limited,¹ the employees were caught in an advanced state of drug intoxication at work and dismissed immediately. It was held that it was within the employer's reasonable range of responses to dismiss a pair of employees caught smoking cannabis in working hours and incapable of normal duties given the open illegality of their action and the hazardous context of machinery and chemicals.

¹ Unreported, 1982 COIT 1270/153.

In the case of Norfolk County Council v Bernard,¹ an education drama specialist who had some contact with children was convicted of possession and cultivation of cannabis and dismissed from employment. It was held to be an unfair dismissal. The employers argued that the dismissal was fair because that employees in this kind of public service need to be of the highest integrity. Each case depends on its own facts and this was not a case of fair dismissal. This case is generally relied on by tribunals where employees have been dismissed following cannabis convictions.

Matters frequently considered are:

the effect of convictions on the employer's reputation;
the effect of the habit on the employee's capability to do the job;
contact with children;
attitude of the law; and
whether the employee occupies a position of responsibility.

¹ [1979] IRLR 220.

In Focus DIY Ltd v Nicholson,¹ the employee was dismissed after she had smoked cannabis at an office party. She was the most senior member of staff present and her employers felt that this damaged her authority as a manager. The tribunal held that dismissal was an unreasonable reaction by the employer, saying that inadequate guidance had been given to employees on what was considered suitable behaviour and that the employer's serious view of cannabis smoking was not necessarily shared by the younger generation. The EAT overturned this decision, stating that a reasonable employer could have taken this serious view of smoking a controlled substance and the dismissal was accordingly fair.

¹ EAT 160/94.

Alcohol and Drug Abuse Outside Working Hours

[C1.78]

Drinking and taking drugs in the employee's own time is unlikely to be grounds for fair dismissal by an employer. This may not be the case, however, if the employee's behaviour undermines the employer's trust and confidence in the employee such that it adversely affects:

relationships with other employees;

relationships with contacts that the employee makes while working; or

the employer's reputation and/or business.

Damage to reputation is particularly important where the business is required to maintain a high standard of safety, so that it not only has to be safe but also has to beseen to be safe.

The matter may be complicated if the behaviour takes place at an office party or client function where alcohol is provided by the employer. A failure by the employer in advance of the function to warn staff of the standard of behaviour that is expected may make it difficult for the employer to treat the matter as one of misconduct. An exception to this may be if the behaviour is so gross that an employee would be bound to know that it was unacceptable or that the employee was in a sufficiently senior position that he/she may be expected to set an example to others. It is wise to issue a reminder to staff before such events of the fact that they are expected not to get intoxicated. If they do so, they will be subject to disciplinary proceedings. They should also be reminded of what constitutes harassment and that such conduct will be subject to the disciplinary procedure.

In Williams and others v The Whitbread Beer Company Ltd,¹ three employees were dismissed following abusive and violent behaviour at a two-day residential training seminar. The tribunal held that the company had overreacted in dismissing the employees, given that the events occurred outside working hours and were fuelled by a heavy drinking session paid for by the employers. The EAT held that the employer's response was in fact reasonable but this view was overturned by the Court of Appeal and the tribunal's decision restored.

¹ IDS Brief 572 (CA).

Where an employee is convicted of an alcohol or drug offence committed off-duty, this is not in itself a fair reason for dismissal. Again, however, if the behaviour undermines the employer's trust and confidence in the employee, such that it adversely affects the issues mentioned above, then it may be fair.

As regards pending criminal proceedings that an employee faces for off-duty alcohol or drug offences, the employer does not necessarily have to await the outcome of the criminal proceedings to be able to fairly dismiss the employee, if having regard to trust and confidence and the adverse affect on the employer's business it is reasonable to do so. (See [C1.22]above.)

Key Points to Remember

[C1.79]

Employers should ideally have a policy on the use of drink and drugs which encourages employees with such problems to seek help and provides or signposts help and professional advice.

There is no legal right for employers to test employees for alcohol or drugs or to search employees suspected of possessing such items at the workplace without the employee's consent. If screening arrangements are considered necessary they may be included in workplace policies and incorporated into contracts of employment.

Use of alcohol or drugs can amount to or result in an occurrence of misconduct at work. This may amount to serious misconduct and justify fair dismissal (subject to the Burchell test).

Drug addiction is specifically excepted from the provisions of the EqA 2010 unless the drugs have been clinically supplied. However, alcoholism may, in some circumstances, be more appropriately dealt with as an illness than as misconduct.

Nevertheless, drinking and drug taking in an employee's own time is unlikely to be a ground for a fair dismissal – this may be different if it adversely affects the employee's relationships with other employees or contacts made while working, or the employer's reputation and/or business.

Breach of Confidentiality

[C1.80]

A dismissal of an employee for disclosure of an employer's confidential information would be a dismissal for conduct.

An employer will often set out in a contract of employment a provision preventing an employee from disclosing its confidential information. The clause should also set out in some detail concerning what it considers to be confidential information.

As well as any specific terms in the contract of employment governing the release of confidential information, there is a term of good faith implied into all contracts of employment. This also applies to the release of confidential information.

In the case of Faccenda Chicken Limited v Fowler,¹ the Court of Appeal summarised the position. It reiterated that the term relating to confidentiality will primarily be governed by the contract. In the absence of a specific term, the obligations will be governed by the implied term. The extent of the implied term will vary depending upon the nature of the employment and the seniority of the employee. Although the implied duty will survive termination, it is restricted to genuinely confidential information such as designs or specific methods of manufacturing. The obligation does not extend to cover all information that is given to an employee during the employment. Matters that will be taken into account are:

whether confidential information is handled by the employee on a regular basis and therefore he/she should be expected to know that it was confidential; and

whether the employer made it clear to the employee that the information was confidential.

¹ [1986] IRLR 69.

Whether a dismissal is considered to be fair is likely to depend on the:

terms of the contract;
nature of the confidential information;
particular damage done to an employer's business; and
seniority of the employee.

Confidential Information/Whistleblowing

[C1.81]

The Public Interest Disclosure Act 1998 provides protection from dismissal or other detriment for workers who disclose confidential information in the public interest. To gain protection, the worker must reasonably believe that what he/she is disclosing shows one of the following things has happened, is likely to happen or has been or is likely to be deliberately concealed.

the commission of a criminal offence;

the breach of a legal obligation;

a miscarriage of justice;

a danger to the health and safety of any person; and/or

damage to the environment.

Such a disclosure will, however, only be protected if the employee has followed the appropriate procedure. The steps are as follows.

The worker should first approach his/her employer with the information – for certain public sector workers this may be made direct to a Minister of the Crown and for workers at certain regulatory authorities this may be to the regulator.

If this approach does not change anything, the worker may then disclose on the following basis:

it must have been reasonable for the employee to disclose to the person he/she did; and

the worker must not act for personal gain.

The worker may bypass the first step if he/she reasonably believes the employer would treat him/her detrimentally or would conceal or destroy relevant evidence. The first step may also be avoided if the information relates to an 'exceptionally serious failure'.

Workers may not gain the protection of the Act if they commit an offence by making the disclosure. Workers who are subject to the Official Secrets Acts are, therefore, not protected.

The disclosure must be made in good faith, meaning that it must not have been made for motives, such as personal antagonism or revenge¹ or for personal gain.

¹ Street v Derbyshire Unemployed Worker's Centre [2004] IRLR 687.

Terms of the Contract

[C1.82]

If the contract does not specifically restrict an employee from disclosing confidential information, the tribunal is likely to consider whether the employee could reasonably have been expected to know that the information that he/she was disclosing was confidential and the potential seriousness of the event.

Particular problems in such a case may be:

where the employee does not admit the disclosure – the employer would have to carry out sufficient investigation to establish a genuine belief that the employee had done so in accordance with BHS v Burchell principles (above at [C1.1]);

where the employee can show that the information was already in the public domain, it may not be considered fair to dismiss him/her for such a disclosure if the disclosure was not his/her fault; or

where the employee discloses information in order to comply with a court order there may be no grounds for dismissal (for example, if he/she is subpoenaed to give evidence at a hearing). However, if he/she volunteers to give evidence without being legally bound to do so and then discloses confidential information, there may be grounds for a fair dismissal.

Information which might be considered confidential includes:

processes, inventions and designs;

financial information including details of profits and losses, and salaries of other employees;

lists and details of customers;

details of take-overs, sales or joint ventures; and

details of on-going or prospective projects.

It should be made clear to employees in the course of their employment what information is confidential. However, it will be helpful to also make this explicit in the contract of employment.

If the disclosure was inadvertent, the question will arise whether it could have been avoided if the employee had exercised reasonable care. In many cases, a warning will be appropriate unless it can be shown that the disclosure could have been avoided. The more serious the information disclosed, the greater the standard of care likely to be expected of the employee.

A deliberate disclosure by an employee for either his/her own benefit or the benefit of a competitor, even where the contract does not particularly prevent disclosure, is likely to be good grounds for a dismissal.

In Sun Printers Limited v Westminster Press Limited¹ the confidential information in question was an extract from an independent report on the company's future and recommendations for change. It was concluded that the report could not properly be regarded as confidential as it was for circulation amongst a large number of people. The view of the judge was that, although the report had started life as a highly confidential document, it had reached the stage where such a large number of people had received it that the 'seal of confidentiality had gone'. The judge went on to say, however, that had the company taken the precaution of stamping 'confidential' on the document and making it clear that the widespread distribution of information to the workforce did not mean that the report ceased to be confidential, then the company could still have relied on the obligation to keep it confidential.

¹ [1982] IRLR 292.

Whistleblowing

[C1.83]

(See also above at [C1.81].)

There are certain cases where a deliberate disclosure by an employee may be considered to be justified. In recent years, many employees have been dismissed for releasing confidential information to regulatory bodies or the press because they feel that the public should be aware of what is going on in their particular business. The term 'whistleblowing' describes the disclosure by employees of information regarding illegal, corrupt or dangerous practices in the workplace. The Public Interest Disclosure Act 1998 has been in force since 1 July 1999. It provides employees with protection from unfair dismissal and other forms of victimisation in particular circumstances (see[C1.81] above). It is important to note that an employee has the right not to be unfairly dismissed without the usual requirement for one year's continuous employment in these cases and there is no limit on the amount of compensation that the tribunal can award.

The protection provided to health and safety representatives and other employees in relation to health and safety is covered at [C1.68] above.

Civil Service

[C1.84]

In response to the recommendations of the Nolan Committees, the Civil Service has adopted specific provisions on confidentiality which specifically allow a civil servant to report the matter in accordance with procedures laid down in departmental guidelines where it is believed that he/she has been required to act in a way which is illegal, improper or unethical and the act is in breach of constitutional or professional code or may involve possible maladministration or is otherwise inconsistent with the code. The National Health Service has also adopted a code which requires staff to report to an appropriate person or authority having regard to the physical, psychological and social effects on patients and clients:

any circumstances in the environment or care which could jeopardise the standards of practice;

any circumstances in which safe and appropriate care for patients and clients cannot be provided; and

where it appears that the health and safety of a colleague is at risk.

For both the Civil Service and the NHS, victimisation of employees who have made legitimate complaints is a serious disciplinary offence.

Private Sector

[C1.85]

Where an employee has raised concerns with an employer in the private sector where he/she has a genuine concern, the employer takes no action and the employee feels there is no alternative but to disclose the matter to an outside body, then the dismissal of the individual for the disclosure may be considered unfair.

In the case of Re a company's application,¹ the principle that the duty of confidentiality is subject to an exception where the public interest justifies disclosure was debated. Although this case did not deal with an unfair dismissal, it is important as an example of public interest being used as a justification for disclosure of information. In this case, a former employee, while discussing his termination payment with the company's chief executive, threatened to report the company's alleged breaches of FIMBRA Regulations imposed in accordance with the Financial Services Act 1986 to FIMBRA and tax misfeasance to the Inland Revenue. The company alleged that in order to do so, the employee would have to use confidential documents and accordingly applied for an injunction which was granted. At the full hearing it was held that it would be contrary to the public interest for employees inhibited by the threat of legal proceedings from disclosing matters that the relevant authorities should investigate and the terms of the injunction were therefore qualified to exclude communications with FIMBRA and the Inland Revenue.

¹ [1989] IRLR 477.

Disclosure Required by Law

[C1.86]

Other occasions where an employee may be required by law to release confidential information are where the employee has to do so as part of a police enquiry or if the employee is subpoenaed to take part in a court case, or even an employment tribunal hearing, for a former colleague. In such a circumstance, the dismissal of an employee for complying with the court order would almost certainly be unfair.

Key Points to Remember

[C1.87]

Breach of confidentiality may be a grounds for dismissal – the employer should include a provision in the contract of employment preventing employees from disclosing confidential information and listing the information considered to be confidential.

The tribunal is likely to look at whether the employee could have reasonably been expected to know that the information was confidential if the contract of employment does not specifically restrict such a disclosure.

Information which has been stamped 'confidential' is more likely to be regarded as such.

A deliberate disclosure for the employee's own benefit or that of others is more likely to lead to a dismissal on this basis being fair.

In some cases, employees are protected from deliberate disclosure where whistleblowing is encouraged (eg civil servants, NHS staff and those protected by the Public Interest Disclosure Act 1998).

An employee may be required by law to release confidential information (ie in relation to a police enquiry or on subpoena to a court case). The employee in this case is protected from dismissal.

Assisting Competitors

[C1.88]

A dismissal of an employee for assisting a competitor would be a dismissal for conduct.

The fact that an employee assists a competitor may not necessarily justify a dismissal. The employer will need to consider the following:

whether the employee was aware that he/she should not work for or assist a competitor;

whether the employee's assistance had an impact on the employer's business; and

whether the employee used work time to assist or work for the competitor.

Many senior employees and, increasingly, those less senior will have specific clauses in their contracts preventing them from working for a competitor without the employer's approval (see [D3.50] below). If there is no clause to this effect, then the fact that an employee spends his/her days working for a large supermarket and his/her evenings working for a corner grocer's shop is unlikely to satisfy an employment tribunal that the supermarket had sufficient justification to dismiss the employee.¹ If, however, the employee spends part of his/her employer's working time working for or assisting a competitor or the employee's assistance to the competitor (even outside working hours) makes or might make a material difference to the employer's business, the employer is far more likely to have good grounds for dismissal.

¹ This principle was confirmed in the case of Nova Plastics Ltd v Froggatt [1982] IRLR 146.

Even where there is no specific provision, there is an implied duty of trust and confidence between each employer and each employee (see [B2.19] above). The assisting of a competitor will in many cases breach the implied term of the employee's contract in such circumstances. It will be a question of fact and degree whether this is serious enough to justify dismissal.

Where there is a specific provision in a contract or where the assistance could amount to a breach of trust and confidence, an employer may also seek damages against an employee for any loss that it has suffered as a result of the employee's breach.

An employee may assist a competitor without necessarily working for them. Other ways in which an employee could attempt to assist a competitor may include:

recommending the employer's customers to take their business to a competitor;
disclosing details of clients, prices, delivery dates;
disclosing details of secret processes or proposed projects; or
disclosing details regarding suppliers or prices.

The disclosure of confidential information has been dealt with above at [C1.80]. However, it is worth restating that it is preferable to have terms in the contract specifically prohibiting the disclosure of such information. Even where there is no such clause, a deliberate disclosure of information to assist a competitor will almost certainly justify dismissal, provided a fair procedure is followed (see further C2: procedures). Likewise, the deliberate referral of clients to a competitor where there is no such clause in a contract preventing such behaviour would, in most cases, justify dismissal as it would be obvious to the employee that they were damaging their employer's business, although again it is a matter of degree whether material damage is being or is likely to be caused to the employer.

Employers should note the case of Scottish Daily Record and Sunday Mail [1986] Ltd v Laird¹ which reinforces the importance of holding a proper investigatory interview and disciplinary interview with the employee. Mr Laird was a deputy editor of the Sunday Mail and had a provision in his contract preventing him from being interested directly or indirectly in any business which competed with his employer's business. Mr Laird had disclosed outside publishing interests when he joined the company. He was told that he could continue as there was no apparent conflict of interest. Nevertheless, he was told that if he extended his activities he must inform the company. In 1993, Mr Laird became involved in the publication of two free newspapers which he did not tell his employer about. When the company found out about Mr Laird's involvement in these he was called to a disciplinary hearing which lasted for 15 minutes, at the end of which he was dismissed – the reason being that his involvement in the free newspapers produced a conflict of interest and destroyed his employer's trust and confidence in him (see below at [C1.90]). The tribunal considered whether the two free newspapers really did constitute a conflict of interest but held that two small monthly free newspapers primarily offering local advertising did not compete significantly with the company's much larger daily and weekly newspapers. The tribunal considered Mr Laird's previous service and the fact that the employer could disclose no damage that had been done by the work for the free newspapers and accordingly the employers had failed the BHS v Burchelltest (above at [C1.1]) by not sufficiently considering the real impact and that a reasonable amount of investigation would have revealed this fact. Thus, the dismissal was held to be unfair.

¹ [1996] IRLR 665.

Key Points to Remember

[C1.89]

It may not necessarily be justified to dismiss an employee who has been assisting a competitor. All the facts must be considered.

Assisting a competitor is likely to be a breach of the implied duty of trust and confidence between the employer and employee. It is a matter of fact and degree whether the breach is serious enough to justify dismissal.

Preferably, the employer should include terms in the contract of employment that working for or otherwise assisting a competitor is specifically prohibited and that a breach of this would be grounds for summary dismissal.

Breakdown of Trust and Confidence

[C1.90]

A dismissal of an employee where there has been a breakdown of trust and confidence is likely to be dismissal for 'some other substantial reason'.

Frequently, a dismissal for:

poor performance;

some other form of misconduct;

disclosure of confidential information;

assisting a competitor; or

criminal activity,

is classified as a dismissal due to a breakdown in trust and confidence. It may occasionally, however, be a specific case of wrongdoing or performance.

A breakdown of trust and confidence is often used by an employer to justify a decision to dismiss rather than having to wait until the full disciplinary procedure or investigation has been completed. It is true that, usually, where trust and confidence has broken down, the employer and the employee cannot continue to work together.

Having said this, where perhaps one serious, potentially hazardous act has occurred and the employer does not feel that it can let the employee continue in the position because of the potential serious results of a repeat occurrence, the employer may be able to rely on gross negligence and a breakdown of trust and confidence without recourse to a warnings procedure (see above at [C1.7]).

Where a warning might usually be appropriate, if the employee does not accept that what he/she has done is wrong so that the employer cannot be sure he/she will not carry out the same act again, dismissal on grounds of a breakdown of trust and confidence may be justified.

A dismissal may be alleged to be due to a breakdown in trust and confidence where a senior employee has generally failed to perform to the satisfaction of the shareholders. In practice, it is extremely difficult to fairly dismiss a senior employee for performance-related reasons as, often, to follow a warnings procedure is demotivating and inappropriate at that level. Consequently, breach of trust and confidence is often relied upon as the reason for the dismissal of a senior employee when the general performance of the company or the results have been poor. However, where no warning has been given, the dismissal is, nonetheless, likely to be unfair, although this does depend on the circumstances. Even if dismissal is procedurally unfair, however, compensation is likely to be reduced because of the executive's contributory conduct or limited to the salary and benefits to which the employee would have been entitled in the time it would have taken to follow the appropriate procedure (see further C2: procedures).

A dismissal for a breach of trust and confidence is often also used to justify a summary dismissal and to prevent having to make a payment in lieu of notice. In SOS Kinderdorf International v Bittaye¹ it was held that an employee who improperly lent funds held by his employer for charity purposes to a friend was guilty of a gross breach of trust and that, accordingly, the employer had not wrongfully dismissed him by dismissing him summarily.

¹ [1996] 1 WLR 987.

However, the breakdown of trust and confidence must be with the employee in question, not any employee connected to them. In the case of Wadley v Eager Electrical Limited,¹ the EAT ruled that a husband could not be dismissed for the actions of his wife although, if it could be shown that this had led to a loss of confidence in the husband by customers, it may amount to a fair dismissal for some other substantial reason.

¹ [1986] IRLR 93.

In the notorious case of Neary and Neary v Dean of Westminster¹, a Special Commissioner appointed by the Queen was asked to consider whether the Dean of Westminster Abbey had been entitled to dismiss summarily the organist and his wife, the part-time concert secretary. Dr Neary received a salary and was, in addition, entitled to fees in respect of broadcasts or other special events in which he took part. The Abbey consisted of twelve lay vicars and ten boy choristers. In April 1994, the Inland Revenue wrote to the Abbey and said that fees paid to their employees for concerts etc. should be taxed at source under Schedule D. In order to preserve the Schedule D position, Dr Neary arranged that fees for which they were not contracted to sing in the Abbey should be paid to a separate account operated by Mrs Neary.

¹ [1999] IRLR 288.

In October 1997, a company 'NML' was created with Mrs Neary as sole shareholder and director. Mrs Neary received fixing fees of over £11,900 from events involving the lay vicars in addition to her salary as concert secretary. She also received a dividend of over £11,900 from events involving the lay vicars in addition to her salary as concert secretary. She also received a dividend of £1,500 from NML. Neither Dr or Mrs Neary disclosed the taking of fixing fees to the Abbey authorities.

In March 1998, the Abbey discovered the payments and dismissed them both for gross misconduct. They appealed under a special procedure to the Queen, who appointed a retired Law Lord as Special Commissioner to consider the matter. Lord Jauncey stated that, since the Abbey was a religious institution, the senior members of that institution are entitled to expect from one another a degree of openness and integrity which might not be expected in a commercial organisation.

Lord Jauncey rejected a submission put forward by Dr and Mrs Neary that gross misconduct justifying summary dismissal must involve dishonesty. He said that the correct test was whether the employees' conduct so undermined the trust and confidence that the employer should no longer be required to retain the employee in his employment. Lord Jauncey found that by not disclosing the arrangement for several years and by Dr Neary seeking an increase in salary for Mrs Neary without mentioning the fact that she was receiving a sizeable sum in fees, they were both in breach of their duty of fidelity and therefore the Abbey were justified in summarily dismissing the employees.

Key Points to Remember

[C1.91]

A breach of trust and confidence between the employer and employee may make the working relationship impossible.

Generally, the more senior an employee, the greater the emphasis on trust and confidence.

However, a dismissal is often described as being by reason of a breakdown in trust and confidence in order to curtail the procedures to be followed. In these circumstances, the dismissal is likely to be unfair unless appropriate procedures have been followed.

Dismissal of a Spouse

[C1.92]

The dismissal of an employee's spouse will not necessarily give a good reason to dismiss the employee. Without exceptional reasons justifying the dismissal it is likely to be held to be unfair and may also be held to be discriminatory.

In the case of Alboni v Ind Coope Retail Ltd,¹ Ms Alboni and her partner, Mr White, were jointly employed as managers of a pub. The terms of the contract of employment stated that employment was inextricably bound to that of their partner and, therefore, if the employment of either of them terminated, the other person's contract would automatically terminate. Ind Coope accepted the resignation of Mr White as the resignation of both parties and wrote to the employees accordingly. Ms Alboni asked them to consider her application on a single basis to run the pub. Ind Coope agreed to do this provided that the application was submitted with a business case supporting it. Although Ms Alboni submitted such an application, it was not received and accordingly Ms Alboni's termination went ahead as originally planned. The Court of Appeal held that Ms Alboni had been dismissed for some other substantial reason and that in the circumstances it was fair.

¹ [1998] IRLR 131.

Dismissal Because of Spouse's Employment

[C1.93]

Where an employee is dismissed because of the position or job that their spouse holds, this would be a dismissal for some other substantial reason.

There have been occasions where an employee is dismissed because their spouse works for a rival company and the two companies fear an exchange of confidential information. There have also been cases where a company operates a policy where employees cannot be employed by the same organisation when they are married or in a relationship. Although there is case law justifying such dismissals, employers will need to ensure that they do not infringe the EqA 2010 in doing so.

The case of Skyrail Oceanic Ltd v Coleman¹ involved an employee who worked for a travel agency. She was dismissed because she was engaged to be married to an employee at a competing travel agency business. The two companies discussed the position with each other and agreed that the female employee would be dismissed. The EAT accepted that, in principle, the dismissal could be fair for 'some other substantial reason', although it found that the dismissal was unfair because the employers had failed to follow a fair procedure.

¹ [1980] IRLR 226, [1981] ICR 250.

Similarly, in Scottish Newcastle Retail Ltd v Stanton, Stanton, Durrant and Durrant¹, the husband and wife were employed as joint licensees of a public house. The contract of employment expressly stated that dismissal of one employee would result in the dismissal of the other. In that case, the wife was dismissed, not because the husband had resigned but because he had been dismissed. The husband's dismissal was found to have been unfair and it was held that in a case such as this the wife's dismissal was, as a result, unfair dismissal.

¹ EAT 1126/96.

Automatic Unfair Dismissal

[C1.94]

In most cases, the employment tribunal will consider whether the employer had a sufficient reason to dismiss an employee and that it was reasonable for the employer to dismiss taking into account all the circumstances. In certain cases, a dismissal for a particular reason will be automatically unfair and there cannot be circumstances justifying the employer's decision to dismiss. Moreover, with the exception of dismissals by reason of a transfer of undertaking referred to at [C1.97] below, the main difference between the automatically unfair reasons and the other reasons is that the employee does not have to show that he/she had a year's continuous employment that the other dismissals require. These particular reasons are detailed below.

The employee may make a complaint to an employment tribunal within three months of the effective date of termination although the employment tribunal has a discretion to hear cases after the time limit where it was not reasonably practicable for the employee to present the complaint in time.

To qualify to make a complaint to an employment tribunal, the employee does not need to satisfy any length-of-service requirement.

The remedies for dismissal on this ground are as for ordinary cases of unfair dismissal (see D1: remedies). In some specific cases minimum basic awards apply and interim relief is available.

Pregnancy and other Family-related Reasons

[C1.95]

ERA 1996, s 99 makes it automatically unfair to dismiss a women because she is pregnant or for any reason connected with the pregnancy.

The dismissal will also be automatically unfair if the reason is because:

she has given birth to a child;

she took ordinary, compulsory or additional maternity leave; or

she was suspended from work on health and safety reasons due to her pregnancy.

Any assertion of the statutory rights protecting pregnant women and women on maternity leave resulting in dismissal will be an automatically unfair dismissal.

In the case of Caledonia Bureau Investment and Property v Caffrey,¹ Mrs Caffrey could not return to work after maternity leave on the due date because she was suffering from post-natal depression. The contract of employment was extended beyond the end of the maternity leave period by virtue of the employer continuing to pay Mrs Caffrey. Her dismissal was held by the EAT to be automatically unfair because the illness was pregnancy-related and arose during the maternity leave period. The EAT accepted that this might mean an employer keeping a sick employee on its books for some time to avoid this type of claim.

¹ [1998] IRLR 110.

The Maternity and Parental Leave Regulations 1999 (SI 1999 No 2213), reg 20 also makes it automatically unfair to dismiss for the following reasons or a reason relating to the following:

ordinary or additional adoption leave;
parental leave;
paternity leave;
time off for dependants.

Under ERA 1996, s 104C, employees are also protected against being dismissed on the ground that the employee:

made or proposed to make an application under the right to request flexible working;
exercised or proposed to exercise a right under the statutory request procedure;
brought proceedings against his/her employer in respect of an application to work flexibly; or
alleged the existence of any circumstances which would constitute a ground for bringing such proceedings.

Health and Safety

[C1.96]

Section 100 of the Employment Rights Act 1996 states that an employee is to be regarded as having been unfairly dismissed if the principal reason for the dismissal was one of a number connected to health and safety in the workplace (see above at [C1.68]).

Transfer of an Undertaking

[C1.97]

Regulation 7 of the Transfer of Undertakings (Protection of Employment) Regulations 2006 ('TUPE') makes a dismissal connected with a transfer of an undertaking automatically unfair unless it is for an economic, technical or organisational reason entailing a change in the workforce ('ETO reason') (see [A2.16] above). This protection only extends to employees who have sufficient continuity of service to bring a claim for unfair dismissal.

The most common ETO reason is a genuine redundancy (above at [C1.52]). Provided that there is indeed a genuine redundancy and the employer dismisses fairly (including following a fair procedure) the dismissal of an employee prior to or following a transfer will not be unfair.

In the case of Berriman v Delabole Slate Limited,¹ the Court of Appeal held that in order for there to be an ETO reason entailing a change in the workforce, that there must be a change in either the size or composition of the workforce, for example, a reduction in numbers or a change in the profile of jobs.

¹ [1985] IRLR 305.

Whether the dismissal was 'by reason of the transfer' is a question of fact for the tribunal to consider. Case law has debated whether the dismissal needs to be because of the transfer which occurred or whether it is sufficient that the dismissal was because there was likely to be a transfer. Many transfer-related dismissals occur in cases where the transferor is an insolvent company and the liquidator or receivers of the company are attempting to achieve a sale of the business.

In Ibex Trading Company Limited v Walton¹ the tribunal held that a dismissal would only be automatically unfair if the dismissal was because of 'the' transfer. The tribunal held that dismissals made before there was even any offer for the business could not be caught by TUPE 1981. However, the case of Harrison Bowden Limited v Bowden² held that a dismissal by reason of a proposed transfer was automatically unfair even though the identity of the transferee was not known at the time. This was confirmed by the EAT in 2010 in Spaceright Europe Ltd v Baillavoine.³

¹ [1994] IRLR 564.

² [1994] ICR 186.

³ UKEAT/0339/10.

It is, therefore, safest to assume that where it is proposed to transfer a business, dismissals are likely to be caught by TUPE 2006 and will be automatically unfair unless the employer can show a genuine ETO reason.

Union Membership or Non-Membership

[C1.98]

The Trade Union and Labour Relations (Consolidation) Act 1992 (TULR(C)A 1992), s 152 states that it is automatically unfair to dismiss an employee if the reason or principal reason was:

that the employee was or proposed to become a member of an independent trade union;

that the employee had taken part or proposed to take part in the activities of an independent trade union at the appropriate time;

that the employee had made use, or proposed to make use, of trade union services at an appropriate time;

that the employee had failed to accept an inducement made in contravention of ss 145A (inducements relating to union membership or activities) and 145B(inducements relating to collective bargaining);

that the employee was not a member of any trade union or of a particular trade union, or had refused or proposed to refuse to become or remain a member of an independent trade union.

These provisions prevent both a closed shop and an anti-trade union stance. See further [C1.113] below.

TULR(C)A 1992, s 153 prevents selection for redundancy on the above grounds.

Activities at an Appropriate Time

[C1.98A]

In terms of protection against dismissal for taking part in trade union activities, the protection only applies where the activities occur at an 'appropriate time'. This is defined in the legislation as being a time outside the employee's working hours or a time within working hours where the employer has agreed or consented to the activity taking place.¹ 'Working hours' is defined as any time when an employee is required to be at work under his/her contract of employment.

¹ TULR(C)A 1992, s 152(2).

The courts have taken a robust view in identifying whether the employer has consented to the activity taking place. For example, in Bass Taverns Limited v Burgess,¹ the Court of Appeal rejected an employer's argument that a particular shop steward's behaviour was so 'over the top' that his behaviour took him outside the employer's consent. Mr Burgess, a trainer manager and union representative, had a union recruitment 'slot' on an induction course for new employees. During his presentation he made disparaging remarks about the employer. The employer felt that he had abused his privilege. He admitted that he had 'gone over the top' and the employer dismissed him. The employer argued that it did not object per se to the employee being involved in the trade union activity. Rather it had objected to the manner of his involvement which was outside the terms of the employer's consent. The Court of Appeal refused to accept that the employer's consent was subject to an implied limitation that the union would not criticise the company, such that the employee fell outside the protection ofTULR(C)A 1992, s 152. The Court of Appeal thought this was unrealistic. In this case, the Court also said that as there was no suggestion that Mr Burgess had acted in bad faith or dishonestly, he came within the protection.

¹ [1995] IRLR 596.

Other cases which have established significant points are:

Ridgeway and Fairbrother v National Coal Board¹ – protection applies where the employer's purpose is to prevent an employee from being a member of a particular trade union; and
Port of London Authority v Payne² – employees were unfairly selected for redundancy where the employer believed, on the basis of past trade union activities, that they would be disruptive in the future.

¹ [1987] IRLR 80, CA.

² [1992] IRLR 447, EAT.

The authorities relating to protection against dismissal on the grounds of trade union membership are closely related to the highly complex legislation arising in connection with an employee's right not to suffer action short of dismissal on the grounds of trade union membership or activities, which is outside the scope of this publication.

In practice, there are substantial risks for an employer proposing to dismiss employees where the introduction of trade union membership or the use of union services is a background factor, even if not the main reason for dismissal. In these circumstances, employers should seek specialist advice before proceeding with such dismissals.

Remedies

[C1.98B]

The right to protection against dismissal on trade union grounds applies irrespective of length of service.

An employee who has been dismissed on one of the prohibited grounds can make a complaint of unfair dismissal to an employment tribunal within three months of the action complained of. However, employees dismissed on such grounds may also apply for interim relief but this application must be made within seven days of the effective date of termination (see further [A2.5] above).

The employment tribunal also has powers to award an enhanced basic award (before any reduction is made on the grounds of contributory conduct or any other statutory ground) which is calculated in the normal way but is subject to a current minimum figure of £5,000.¹ The compensatory award is calculated on the same basis as ordinary unfair dismissal complaints (see [D1.35] et seq. below for further details).

¹ Figure effective from 1 February 2011: Employment Rights (Increase of Limits) Order 2010 (SI 2010 No 2926).

The employment tribunal also has the power to order that the employer reinstate or re-engage the employee (see [D1.27] et seq. below). In considering whether it was practicable for an employer to comply with an order for reinstatement or re-engagement, the employment tribunal is expressly precluded from taking into account the fact that the employer has engaged a permanent replacement unless the employer can show that it was not practicable for the employer to arrange for the employee's work to be done without engaging apermanent replacement.¹

¹ ERA 1996, s 116(4) and (5).

If the tribunal orders reinstatement or re-engagement and the employer fails to comply without good cause, then the tribunal has the power to order payment of a basic award, a compensatory award and an additional award of between 26 and 52 weeks' pay (the latter is subject to a current maximum of £400 per week¹). See [D1.27] below for further details of those remedies.

¹ Figure effective from 1 February 2011: Employment Rights (Increase of Limits) Order 2010 (SI 2010 No 2926).

Interim Relief

[C1.98C]

An employee who makes a complaint to a tribunal that he/she has been dismissed and that the reason or the principal reason for the dismissal was on the grounds of trade union membership or activities can apply for 'interim relief' against dismissal.¹ This right does not apply where the employee complains that he/she has been selected for redundancy on such grounds. The available interim relief is an order for reinstatement, re-engagement or for the continuation of the terms and conditions of employment (thereby preserving continuity, pay and benefits).

¹ TULR(C)A 1992, s 161.

Interim relief is a unique remedy applicable to a very limited class of situations. The employee must act swiftly to make an application and there are strict conditions attaching to it.

In short, the application must be made to the employment tribunal within seven days of the employee's effective date of termination of employment (see [A2.5] above for a definition).

For complaints made in connection with dismissal on the grounds of being a member of a trade union or taking part in trade union activities, the employee's trade union must present a certificate to the tribunal signed by an authorised official. The certificate must state that on the date of the dismissal the employee was, or had proposed to become, a member of the union and that there appears to be reasonable grounds for proposing that the reason for dismissal, or if more than one, the principal reason, was a reason prohibited by TULR(C)A 1992, s 152.

The employment tribunal is obliged to hear an application for interim relief promptly and is obliged to consider the merits of the case to determine whether the application is likely to succeed. In Taplin v C Shippam Limited,¹ the EAT said that the test for the tribunal was whether the employee had a 'pretty good' chance of succeeding in establishing that the dismissal was on grounds of union membership, activities or non-membership which it described as being a higher degree of certainty than a 'reasonable prospect of success'.

¹ [1978] IRLR 450.

Whilst applications for interim relief are rare, it is even rarer for cases that have succeeded at the interim relief stage to proceed to a full hearing. This is because, for the tribunal to award interim relief, it must determine that there is a likely prospect that the employee will succeed and employers tend to settle because they know there is a serious prospect of losing at the full hearing. Similarly, if the employee loses the application, there is little incentive to proceed to a full hearing.

Dismissal Rights of Employees Taking Industrial Action

[C1.98D]

At common law, an employer is normally entitled to summarily dismiss an employee taking industrial action because the employee usually fundamentally breaches his/her contract of employment by virtue of the action taken. Unfair dismissal legislation, however, places some limitations on this right and the employees' protection was significantly enhanced by the ERA 1999.¹

TULR(C)A 1992, ss 237, 238 and 238A contain the rules governing the dismissal of employees for taking industrial action. An employee's rights depend on whether he/she was taking unofficial or official industrial action and, if official, whether the dismissal occurred within a defined 'protected' period. Employees who are dismissed for taking lawful official industrial action within this protected period have the right to claim they have been automatically unfairly dismissed.¹

¹ ERA 1999, s 16 and Sch 5, which came into force on 24 April 2000.

Official Industrial Action

[C1.98E]

Where the reason or, if more than one, the principal reason for dismissal is that the employee is taking or took protected industrial action, the dismissal will be automatically unfair.¹ Protected action means lawful industrial action within the meaning of TULR(C)A 1992, s 219, ie where the union has immunity from liability in tort for the industrial action. To have immunity, the action must be authorised by the union, having given the employer valid notice of the industrial action, and have the support of a valid ballot.

¹ TULR(C)A 1992, s 238A(2).

A dismissal will only be automatically unfair if it takes place within the relevant specified time periods, namely:

within a twelve-week period of the start by the employee of protected official industrial action;
after the end of the twelve-week period if the employee had stopped taking the industrial action before the end of that period; or
after the end of the twelve-week period, where the employee had not stopped taking part in the industrial action before the end of that period but the employer had not taken suchprocedural steps as would have been reasonable for resolving the dispute to which the protected action relates.

It is also automatically unfair to select an employee for redundancy on the grounds that the employee took lawful official industrial action and one of the conditions listed above apply.

The employment tribunal must take the following factors into account when deciding whether the employer has or has not taken reasonable steps to resolve the dispute, namely whether the employer or union has:

complied with agreed dispute resolution procedures;
offered or agreed to start or resume negotiations after the start of the industrial action; and
after the start of the action, unreasonably refused a request that conciliation services (eg ACAS) or mediation services be used.

Whilst it is for the employer to show that it has acted reasonably in not taking procedural steps to resolve the dispute, the employment tribunal will also have regard to the union's actions.

The employment tribunal must not take into account the merits of the dispute in considering whether all reasonable procedural steps have been taken for resolving the dispute.¹

¹ TULR(C)A 1992, s 238A(7).

The Employment Relations Act 2004 inserted s 238B into TULR(C)A 1992 and this contains detailed provisions intended to define more closely the actions which tribunals should have regard to when considering whether employers and unions have undertaken reasonable procedural steps to resolve industrial disputes where the parties have agreed to use a conciliator or mediator. These relate to procedural matters including conduct before during and after meetings, etc.

Enforcement

[C1.98F]

There is no minimum service requirement for the right to make such a claim. The time limit for filing the complaint with the employment tribunal is six months from the effective date of dismissal (unlike the usual three-month time limit applicable in unfair dismissal cases). Where the tribunal is satisfied that it was not reasonably practicable for the employee to lodge the complaint within that time, the complaint must be lodged within such further period as the tribunal considers reasonable.¹

¹ TULR(C)A 1992, s 239(2).

Dismissal Outside the Protected Time Period

[C1.98G]

Recent official statistics show that only a very small percentage of industrial action disputes last for more than a few days. In practice, therefore, most employees who are dismissed for taking protected official industrial action will have the right to claim that they have been automatically unfairly dismissed.

However, where the employees have been dismissed outside of the protected period (being twelve weeks), and the employer is able to demonstrate that it did take all reasonable procedural steps in relation to the dispute, the employees' rights to claim unfair dismissal are much more limited.

Under TULR(C)A 1992, s 238, such employees are excluded from the right to claim unfair dismissal unless they can show that they have been treated selectively by the employer. If the employee can show that another employee at the same establishment who was taking part in the dispute was not dismissed, or that within three months of his/her dismissal such an employee was re-engaged by the employer and he/she was not, then the right to claim unfair dismissal is restored.

However, in these circumstances the employee can only claim ordinary not automatic unfair dismissal. Further, the employee must meet the usual length of service qualifying criteria for the right to claim unfair dismissal (see [A2.18] above).

The effect of s 238, therefore, is that outside the protected period, as long as the employer has taken all reasonable steps to resolve the dispute, it may dismiss employees taking part in official industrial action provided it dismisses all the employees at a particular establishment taking part in the dispute. If it acts selectively and dismisses some but not all employees taking action, those employees who are dismissed can claim ordinary unfair dismissal. If the employer dismisses all the employees taking part in the dispute he/she can re-engage all of them but not some of them. If the employer only wishes to re-engage some of the dismissed employees, he/she must wait three months before re-engaging those he/she wishes to return.

The time limit for submitting a claim under s 238 is six months (unlike the usual three month time limit applicable in unfair dismissal cases). In practice employees are likely to make a complaint under both ss 238 and 238A.

Dismissal Whilst Taking Unofficial Industrial Action

[C1.98H]

Employees who are dismissed whilst taking unofficial industrial action (ie action which is not authorised by the union or where the union has repudiated it) cannot claim unfair dismissal even if the employer has selectively dismissed or selectively re-engaged those taking part in the industrial action. However, this protection for the employer only applies where the employee is dismissed whilst taking part in the industrial action.¹

¹ TULR(C)A 1992, s 237.

There is a brief period of protection for employees taking such industrial action. Where a union repudiates the industrial action, the employees will not be regarded as taking unofficial industrial action (and, therefore, not at risk of selective dismissal/re-engagement) until the end of the next working day after the day on which the repudiation takes place (that is, midnight on the working day following the day the repudiation takes place).¹

¹ TULR(C)A 1992, s 237(4). See also Balfour Kilpatrick Ltd v Acheson [2003] IRLR 683, EAT.

Union Recognition

[C1.98I]

ERA 1999, Sch A1, s 161 introduced an automatically unfair reason for dismissal relating to the compulsory trade union recognition proceedings.

Dismissal will be unfair if the reason was that:

the employee acted with a view to obtaining or preventing recognition;

the employee indicated that he/she did or did not support the recognition of the union;

the employee acted with a view to securing or preventing the ending of recognition;

the employee influenced or sought to influence the way in which votes were cast;

the employee influenced or sought to influence other workers to vote or to abstain from voting;

the employee voted in the ballot; or

the employee proposed or failed to do any of the above.

Key Points To Remember

[C1.98J]

Dismissal for trade union membership or taking part in trade union activities is automatically unfair.

Where the reason for dismissal, at least in part, relates to use of trade union services it will be automatically unfair.

If involvement in trade union activities occurs within working hours and without the employer's consent, the provisions protecting employees from dismissal on trade union grounds will not apply.

Those dismissed on trade union grounds may be able to claim slightly higher awards of compensation and interim relief.

Employees who are dismissed for taking lawful official industrial action have the right to claim they have been automatically unfairly dismissed if they are dismissed within the specified time period.

Employees dismissed for taking official industrial action which is not protected will only have the right to claim ordinary unfair dismissal if they have been selectively dismissed or selectively not re-engaged.

Employees who have been dismissed whilst taking unofficial industrial action have no right to claim unfair dismissal even if they have been treated selectively.

These provisions are very complicated and, in view of the potential consequences, an employer considering dismissing employees for taking industrial action should obtain legal advice before taking any action.

Spent Convictions

[C1.99]

It is automatically unfair to dismiss an employee because he has been convicted of an offence or failed to disclose an offence which is 'spent' in the terms of theRehabilitation of Offenders Act 1974 (see also [C1.20] above).¹

¹ ROA 1974, s 4(3)(B).

Dismissal for Asserting Statutory Right

[C1.100]

Section 104(1) of the Employment Rights Act 1996 states that the dismissal of an employee will automatically be regarded as unfair if the reason or principal reason for it was that the employee brought proceedings against the employer to enforce a relevant statutory right of his/hers.

It does not matter whether the employee had the actual right or whether it was infringed provided that the complaint was made in good faith (see Mennell v Newell & Wright (Transport Contractors) Ltd¹).

¹ [1997] ICR 103.

It is not necessary for the employee to actually have the right that he/she is asserting if he/she genuinely believes that he/she does and is dismissed as a consequence of attempting to assert that belief. However, the employee must have made an allegation that his/her rights have been infringed; it is not enough for the employee to say retrospectively that the employer could have infringed the right.¹ A relevant right is any right conferred under the ERA 1996 (for which the remedy is a complaint to an employment tribunal), which includes:

the right to a written statement of particulars;
the right to an itemised pay statement;
the right not to suffer an unlawful deduction from pay;
rights to a guarantee payment, minimum notice rights and time off for certain purposes;
Sunday working rights;
the right not to be unfairly dismissed (eg where terms and conditions have been changed and an employee claims (on the basis of Alcan Extrusions v Yates) that he/she has been unfairly dismissed);²
rights not to suffer a detriment on the grounds of health and safety, or other grounds in ERA 1996, Part V, etc;
rights granted to trade union members and officials under TULR(C)A 1992 (in respect of deductions from pay, union membership or activities and time off); and
rights under the Working Time Regulations 1998.

¹ Mennell v Newell & Wright (Transport Contractors) Ltd [1997] IRLR 519, CA.

² [1996] IRLR 327.

Disclosure of Information

[C1.101]

Under ERA 1996, s 103A, a dismissal for making a protected disclosure under the provisions of the Public Interest Disclosure Act 1998 or other relevant provisions will be automatically unfair (see further [C1.81] and [C1.83] above).

Working Time

[C1.102]

A dismissal for refusing to comply with any requirement or refusing to forego a right conferred on him/her by the Working Time Regulations 1998 or for failing to sign a workforce agreement is automatically unfair.

Employees are protected from being dismissed in connection with their rights under the Working Time Regulations 1998 ('WT Regs').¹

¹ SI 1998 No 1833.

It is automatically unfair to dismiss,¹ or select an employee for redundancy² where that employee:

refused (or proposed to refuse) to comply with a requirement which the employer imposed (or proposed to impose) in contravention of the WT Regs;
refused (or proposed to refuse) to forgo a right conferred on him/her by the WT Regs;
failed to sign a workforce agreement for the purposes of the WT Regs, or to enter into, or agree to vary or extend, any other agreement with his/her employer which is provided for in the WT Regs; or
being:
- a representative of the workforce for the purposes of a workforce agreement; or
- a candidate in an election to be such a representative,
  
  performed (or proposed to perform) any functions or activities as such a representative or candidate.

¹ ERA 1996, s 101A.

² ERA 1996, s 105.

Remedies

[C1.102A]

In relation to ERA 1996, s 101A, there is no qualifying period of service applicable.¹ A complaint must be presented to the employment tribunal within the usual three-month time limit.

¹ ERA 1996, s 108.

In addition to the normal basic award and compensatory award available in unfair dismissal cases, the employment tribunal also has the power to award a minimum basic award of £5,000¹ (before any reduction is made on the grounds of contributory conduct or any other statutory ground) for a dismissal where the employee acts or proposes to act in the capacity of a representative. The remedy of interim relief is also available to such employees.²

¹ ERA 1996, s 118(3). This is the figure applicable from 1 February 2011.

² ERA 1996, s 128(1).

Shop Workers and Sunday Trading

[C1.103]

Shop workers and betting workers who refuse to work Sundays are protected from dismissal. If they are dismissed for refusing to work the dismissal will be automatically unfair.¹

Shop workers and workers in betting offices cannot be compelled to work on Sundays. In relation to this matter, employees are either 'protected workers' or 'opted out workers'.

¹ ERA 1996, s 101.

An employee will be protected if they have a contractual right to refuse to work on Sundays or if the contract existed before 26 August 1994 for shop workers or 3 January 1995 for betting shop employees.¹

¹ ERA 1996, s 36(7).

An employee will lose the protected worker status if they volunteer to work on Sundays.¹

¹ ERA 1996, s 36(5).

An employee will be an 'opted out worker' if they give their employer formal notice to the effect that they object to working on a Sunday. The opting out notice normally has to be three months. An employee will be specifically protected from victimisation or any other detriment by giving or proposing to give an opting out notice or by virtue of being protected workers.¹

¹ ERA 1996, s 45.

Where an employee is a protected worker, he/she is protected from victimisation for refusing or proposing to refuse to do shop work on a Sunday. Dismissal for any of these reasons would constitute victimisation (see further [A2.19] above).

Pension Scheme Trustees

[C1.104]

The Pensions Act 1995, s 46(5) introduced the section which is now contained in ERA 1996, s 102. An employee's dismissal will automatically be unfair if the reason or principal reason for it is that the employee is a trustee of a scheme which relates to his/her employment or the employee performed or proposed to perform any functions as such a trustee.

Employee Representatives

[C1.105]

ERA 1996, s 103 means that it is automatically unfair for an employee to be dismissed if the reason or principal reason for it is that the employee is an employee representative for collective redundancy or transfer of undertakings purposes, or is a candidate for election in such an employee representative position or that he/she performed or proposed to perform any functions or activities as such a representative.

Remedies

[C1.105A]

Pension scheme trustees and employee representatives may make a complaint of unfair dismissal to an employment tribunal within three months of the effective date of termination, although the employment tribunal has a discretion to hear cases after the time limit where it was not reasonably practicable for the employee to present the complaint in time.

To qualify to make a complaint to an employment tribunal, the employee does not need to satisfy any length-of-service requirement.

As with trade union representatives, the employee representatives can apply for interim relief: the claim must be filed within seven days of the effective date of termination (see [C1.98C] above for details of the procedure). Where the employment tribunal makes an award of compensation, this will be calculated in the same way as an award for dismissal on the grounds of trade union activities or membership (see [C1.98B] above).

Right to be Accompanied to a Disciplinary or Grievance Hearing

[C1.105B]

This ground for automatically unfair dismissal applies to both the employee who is the subject of the disciplinary hearing or the bringer of the grievance and their work colleagues who attend the hearing with them.¹

¹ ERA 1999, s 12(4).

Remedies

[C1.105C]

There is no qualifying period of service applicable to complaints under these provisions.

A complaint must be presented to the employment tribunal within three months of the effective date of dismissal, although the tribunal has a discretion to hear cases after the time limit where it was not reasonably practicable for the employee to present the claim in time.

The remedy of interim relief is also available to those claiming unfair dismissal on either the ground that they exercised or sought to exercise their right to be accompanied or that they had accompanied or sought to accompany a worker under these provisions.¹

¹ ERA 1999, s 12.

Asserting Rights under the Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000

[C1.105D]

If an employee is dismissed for bringing proceedings against his employer under the Part Time Regulations or for asserting any rights under those regulations, it will be automatically unfair.

Asserting Rights under the Fixed-term Workers (Prevention of Less Favourable Treatment) Regulations 2003

[C1.105E]

If an employee is dismissed for bringing proceedings against his employer under the Fixed-term Workers Regulations or for asserting any rights under these regulations, it will be automatically unfair.

Dismissal for being a Member of a Special Negotiation Board

[C1.105F]

If the reason or principal reason for an employee's dismissal is that they had carried out activities as a member of a special negotiating body or Employee Works Council or because he stood as a candidate for the roles of those positions, it will be automatically unfair under the Transnational Information and Consultation of Employees Regulations 1999, reg 28.

Dismissal for Enforcing or Securing a Benefit under the Tax Credits Act 2002

[C1.105G]

It will be automatically unfair if an employee is dismissed for enforcing or taking action to secure rights to benefits under the provisions of the Tax Credits Act 2002.

Dismissal for Enforcing Rights under the National Minimum Wage Regulations 1999

[C1.105H]

It will be automatically unfair if an employee is dismissed for enforcing or taking action to secure rights under the provisions of the National Minimum Wage Regulations 1999(SI 1999 No 584).¹

¹ ERA 1996, s 104A.

Dismissal for being Absent due to Jury Service

[C1.105I]

A dismissal will be automatically unfair where an employee is dismissed for being absent as a result of jury service unless the employee has unreasonably refused to apply for an excusal from or a deferral of jury service.¹

¹ ERA 1996, s 98B.

Education and Training

[C1.105J]

A dismissal will be automatically unfair where an employee is dismissed proposed to or did exercise his/her right to time off to participate in education of training.¹ It is also automatically unfair to dismiss an employee for making an application for time off for study and training or for any reason related to enforcing this right.²

¹ ERA 1996, s 101B.

² ERA 1996, s 104E.

Blacklists
[C1.105K]
A dismissal will be automatically unfair where the reason relates to a blacklist.¹ The Employment Relations Act 1999 (Blacklists) Regulations 2010 (SI 2010 No 493) make it unlawful to blacklist employees due to their trade union activities or membership. Dismissal will be unfair where an employer in dismissing an employee, breaches these regulations or relies on information supplied by those who the employer ought reasonably to know has contravened the regulations.

¹ ERA 1996, s 104F.

Dismissal for Enforcing Rights under the Agency Workers Regulations 2010
[C1.105L]
From October 2011, it will be automatically unfair to dismiss an employee for enforcing or taking action to secure rights or carrying out any other protected act, under the provisions of the Agency Workers Regulations 2010 (SI 2010 No 93).
Dismissal for a Reason Relating to the Pensions Act 2008, Part 1, Chapter 1
[C1.105M]
A dismissal is automatically unfair where an employee is dismissed as a result of action or proposed action taken to enforce the employee's rights under PA 2008, Part 1, Chapter 1relating to enrolment in a pension scheme. Dismissal due to concerns that the provisions of PA 2008, Part 1, Chapter 1 will, or may, apply to an employee will also be unfair.
Where an employer is prosecuted for an offence under PA 2008 as a result of action taken by an employee for the purposes of enforcing an employee's rights under PA 2008, Part 1, Chapter 1, it is automatically unfair to dismiss the employee concerned.¹

¹ ERA 1996, s 104D.

Key Points to Remember

[C1.106]

In certain cases, dismissal for particular reasons will be automatically unfair and the employer's reasons cannot justify the decision to dismiss.

The automatic unfair reasons are:

pregnancy and taking maternity or parental leave;

health and safety;

transfer of an undertaking;

union membership or non-membership and union recognition;

spent convictions;

dismissal for asserting a statutory right;

Sunday trading;

pension scheme trustees;

employee representatives;

making a protected disclosure;

dismissal for asserting rights under the Working Time Regulations 1998;

dismissal for taking part in protected industrial action;

dismissal for asserting rights under the Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000;

dismissal for asserting rights under the Fixed Term Workers (Prevention of Less Favourable Treatment) Regulations 2002;

dismissal for being a member or standing as a candidate for a special negotiatory body or European Works Council;

dismissal for enforcing a right under the National Minimum Wage Regulations 1999;

dismissal for enforcing a right under the Tax Credits Act 2002;

being absent due to jury service;

for a specified reason in connection with applications for time off for study and training;

for a reason in connection with blacklists;

for a specified reason in connection with the Agency Workers Regulations 2010 (beginning October 2011);

for a specified reason in connection with PA 2008, Part 1, Chapter 1;

The employer must be careful to treat all employees consistently.

Other Aspects of Grounds for Dismissal

[C1.107]

There may be other aspects which affect a dismissal.

Dismissing Replacement Employees

[C1.108]

Often, an employer will have to take on an employee to cover a period of maternity leave and the dismissal of a replacement employee who has been taken on specifically to cover the absence of another will not always be for a fair reason.

The dismissal of a replacement employee will be considered to be for some other substantial reason provided that the replacement employee has been informed in writing at the outset that their employment would be terminated on the resumption of work by the original employee. This section applies specifically to maternity leave cover and a situation where an employee is suspended on medical grounds.¹

¹ ERA 1996, s 106.

The employer still has an obligation to act reasonably in such cases and, therefore, if there was any alternative employment available at the time consideration should be given as to whether it could be offered to the replacement employee before dismissing.

In Rees v Apollo Watch Repairs plc¹ the replacement employee was found to be more efficient. The company therefore refused to take back the pregnant employee, preferring to keep on the replacement instead. The EAT held that the applicant had been directly discriminated against since the unfavourable comparison with the replacement employee had only arisen because of her absence on maternity leave.

¹ EAT 23/93.

Pressure from Third Party to Dismiss

[C1.109]

There are occasions where pressure may be put on an employer to dismiss by a third party, for example, a trade union or a customer.

Section 107 of the Employment Rights Act 1996 specifically states that the employer cannot use as an excuse any pressure by way of industrial action used against them to encourage them to dismiss. The case of Hazels Offset Limited v Luckett¹ established that even where the industrial action used to put pressure on the employer is not official trade union action it will still be subject to the provisions of s 107 and, therefore, cannot be brought into consideration as a reason for dismissal.

¹ [1977] 1RLR 430.

Where an employer is put under pressure by an external third party, for example, a customer, the dismissal may be fair depending on the circumstances. In the case of Scott Packing and Warehousing Company Limited v Paterson¹ a dismissal was held to be fair where an employee upset a major customer (see also [C1.28] above).

¹ [1978] IRLR 166.

It established that the employer cannot rely on the wishes of the customer alone but must also consider fully the injustice of the dismissal on the employee. The employer should fully take into account the length of service and performance record of the employee.

In the case of Davenport v Taptonholme for Elderly People,¹ the EAT upheld as fair the dismissal of Ms Davenport by the residential home at the insistence of the local authority who were responsible for supervising the operation of the home. The dismissal was held to be fair for 'some other substantial reason'. The tribunal were very critical of the procedure adopted by the Council but accepted that, as they were the responsible authority, they were in a position to dictate such matters to the home.

¹ Unreported, 14 January 1999 (EAT 559/98).

In the case of Stanley Wattam Ltd v Rippin,¹ the EAT, very unusually, upheld the employer's argument that the contract of employment had been frustrated. Ms Rippin was employed by Stanley Wattam Ltd to sort day-old chicks by their sex. Her services were hired out by her employers to one of their important customers to work in their Grantham hatchery. She had worked there since 1993. In 1997, on a visit to the site by representatives of a supermarket, the customer attempted to delay Ms Rippin's work so that they could watch her at work. As she was paid on a piece rate basis, she asked who was going to pay her for her wasted time. She became abusive and the customer had her excluded from the premises as they did not want a scene when the supermarket representatives were there. They then refused to have her back. Ms Rippin's employers offered her work at their other hatcheries in Suffolk and Norfolk but that was too far for her to travel.

The EAT agreed with the employer that her contract had been frustrated but commentary on the case is critical and suggests she should have been made redundant. In any event, the dismissal would be fair on the actions of the third party.

¹ Unreported, 29 October 1998 (EAT 355/98).

Statutory Bar

[C1.110]

The loss of a driving licence by an employee who needs to drive as part of his/her duties, if resulting in dismissal, will be a dismissal for a reason relating to a statutory bar as well as a capability reason. In such a case, the employer should consider whether there is any other suitable position which the employee could perform.

Other positions which may result in an employee being in breach of a statutory requirement are those which require a professional qualification in the circumstance where the employee loses that qualification or fails to gain it after a training contract (above at [C1.51]).

Consistency

[C1.111]

If employers treat employees in different ways by dismissing one employee for a particular act of misconduct but not dismissing another, they might find that an otherwise fair dismissal is considered to be unfair, for example, the case of Post Office v Fennell.¹ In the case of Hadjioannou v Coral Casinos Ltd,² it was pointed out by the Employment Appeal Tribunal that comparison was only relevant where the circumstances are truly similar.

¹ [1981] IRLR 221.

² [1981] IRLR 352.

Whilst it has been made clear that tribunals should not engage needlessly in what can become detailed comparisons of similar but different situations, it is very important for employers to consider how they have acted previously in dealing with particular performance or conduct problems and how they may act in the future.

Immigration Status

[C1.112]

The Asylum and Immigration Act 1996 makes it a criminal offence for an employer to employ a person aged 16 or over who does not have permission to live or work in the UK.

Although foreign nationals would have the right to complain of unfair dismissal if they were ordinarily employed in the UK, a contract of employment which is prohibited by statute is illegal and, therefore, unenforceable by either party. The dismissal of an employee because he/she did not have the right to work in the UK (for example, if their work permit expired) would be a potentially fair reason, in that the employee could not continue to work in a position in contravention of the Asylum and Immigration Act 1996.

Foreign nationals legally employed in the UK have the same statutory employment protection rights as their British counterparts.

[The next paragraph is [C1.114].]

Disciplinary Action Following a Previous Warning Relating to a Different Misdemeanour

[C1.114]

If an employee has received a prior warning in relation to one aspect of his/her performance and further poor performance of a different nature occurs, can the prior warnings be taken into account and used as the building blocks of a dismissal? In examining this issue in relation to misconduct, the Employment Appeal Tribunal held that one can take note of previous warnings even if they relate to separate subject matters.¹

¹ Auguste Noel v Curtis [1990] IRLR 326.

Whether a subsequent failure to perform in a different manner amounts to a good reason for either a further warning or a dismissal is likely to depend on:

the consequences of the most recent failure to perform;
the wording of the earlier warning;
the number of previous warnings;
the dates between the warnings; and
whether the most recent failure to perform is another indication that the employee is not capable of doing the job.

Employers do need to exercise caution if considering relying on an expired warning in reaching their decision. Relying on such a warning has been held to be fair¹ but in other cases it has been held to be unfair.² The particular circumstances must be examined carefully. The key issue is the purpose for which the expired warning is taken into account. It is more likely to be acceptable if it is only considered in relation to the sanction being imposed and if the nature of the misconduct was the same. The wording of warnings and disciplinary policies in relation to expired warnings will also be important. Employers should note that ACAS advises that expired warnings should be disregarded.

¹ Webb v Airbus [2008] IRLR 309.

² Diosynth Ltd v Thomson [2006] IRLR 284.

C1: Appendix 1

Case	Reason for Dismissal	Fair/Unfair	If unfair, why?
Associated Tyre Specialists (Eastern) Ltd v Waterhouse[1976] IRLR 386, EAT	Supervisor informed of complaints from staff about her and given four weeks to improve. She requested a review at the end of the period but was not given one. She was not informed of further complaints. When staff in her office walked out she resigned and claimed unfair constructive dismissal.	UNFAIR	Failure to give the employee the support to which she was entitled as a supervisor was a breach of contract entitling the employee to resign. The employer had put forward no reason why the dismissal was fair.
British Telecom v Rodrigues (EAT 854/92)	The employee was dismissed for accessing part of the company's computer system without authority but for work-related reasons.	UNFAIR	The company policy did not make it clear that such misuse would result in dismissal.
Castledine v Rothwell Engineering Ltd[1973] IRLR 90	Applicant's duties had been extended eight months before dismissal. Employer said dismissal was either for redundancy or incapability at the 'new' job.	UNFAIR	It was not a redundancy situation as the 'new' job continued after the dismissal. The employer could not produce evidence of incapability and had provided a good reference which contradicted the incapability argument. The employer had, therefore, not shown a fair reason for dismissal.
Cook v Thomas Linnel & Sons Ltd[1977] IRLR 132, EAT	Manager from 'non-food' part of the employer's business promoted to be manager of food department. Dismissed for poor performance following fall-off in trade. Employee turned down equivalent alternative post back in 'non-food'.	FAIR
Davison v Kent Meters Ltd [1975] IRLR 145	As assembler was dismissed after 471 of 500 components assembled by her were faulty. The employee said she was assembling them as the supervisor had instructed; the supervisor denied having instructed her in correct assembly at all.	UNFAIR	1. Lack of supervision – if the supervisor had not shown the employee the correct method of assembly, he should have. He should also have checked her work at an early stage. the employee was not warned in writing and was not told her job was at risk. 2. The employee was unfairly denied an appeal to higher management.
Denco Ltd v Joinson[1991] ICR 172	The employee was dismissed for accessing part of the company's computer system without authority.	FAIR
Dunn v IBM United Kingdom Ltd (Case No 2305057/98)	Employee dismissed for accessing pornography and other non-business material on company computer.	FAIR
Macari v Celtic Football and Athletic Co Ltd [1999] SLT 138	Employee dismissed for failing to obey the employer's instructions, even though they were given maliciously.	FAIR	Provided the failure to follow the instructions was sufficiently serious, it did not matter that the instructions were not given in good faith.
Meiszner v Hart Timber Preservation Ltd (EAT 691/97)	Dismissal for one piece of shoddy work after receiving only one other warning in six years' service.	UNFAIR	Because the breach was not considered to go to the root of the contract and unless it did so, there should be adequate warning.
Neary and Neary v Dean of Westminster[1999] IRLR 288	Employees dismissed for taking fees from external promoters in respect of events involving the choir of Westminster Abbey.	NOT UNFAIR DISMISSAL CASE. HELD TO BE GROSS MISCONDUCT.	Undermined trust and confidence.
Parr v Derwentside District Council(Case No 2501507/98)	Employee dismissed for accessing pornographic material on computer at work.	FAIR	Employer had carried out thorough investigation and had decided that the employee was guilty of violating established codes of conduct.
Woods v Olympic Aluminium Co Ltd[1975] IRLR 356	Assistant accountant dismissed for lack of management ability in that he couldn't do as he was told and was unable to supervise or co-operate with staff.	UNFAIR	Employee may have lacked dynamism but had not been employed as a manager and should not have been expected to perform as such. No real evidence to show lacking in capability to perform the job he was employed to do.

DRUG	EFFECT
Cocaine	Damage to lining of nose (through sniffing).
	Breathing problems and chest pains (when smoked).
	Anxiety, paranoia.
	Risk of dependence.
Ecstasy ('E')	Effects not yet fully understood.
	Causes depression, panic, anxiety, possibly brain damage.
	Kidney and liver damage, internal bleeding.
	Permanent red marks left on the skin.
Amphetamines	Heart rate dramatically increased and can lead to heart failure.
	Risk of psychotic mental illness.
	Increases blood pressure, red spots on face, liver damage.
	Risk of dependence.
LSD ('Acid')	Alters perception.
	Hear, feel and taste things that are not there.
	Distorts vision, can permanently damage eyesight.
	Can trigger serious mental illness.
	Flashbacks without warning at any time years after original trip.
Cannabis	Impairs concentration and memory.
	Increases accidents.
	Risk of dependence.

Thursday 27 December 2012

employment law

C1: Grounds for Dismissal

Termination of Employment

Part I. C: Grounds & Procedures

C1: Grounds for Dismissal

Establishing the Reason for Dismissal

Poor Performance

Continuing Poor Performance

Following Procedure Versus a Quick Decision

Gross Misconduct and Gross Negligence

Gross Misconduct

Gross Negligence as Gross Misconduct

Cumulative Misconduct as Gross Misconduct

Weight to be Given to Mitigating Circumstances

Relationship Between Express Terms of Disciplinary Rules and Gross Misconduct

Offers of Alternative Employment After Gross Misconduct Allegation

Bad Timekeeping

Misconduct and Dishonesty

Dismissal on Suspicion of Theft

Dishonesty Outside Work

Criminal Charges

Criminal Act Committed Outside Work

Awaiting Trial

Effect of Conviction

Discovery of Previously Undisclosed Criminal Convictions

Conduct Outside Work

Physical and Verbal Abuse of Customers and Other Employees

Harassment

Sexual Harassment

Racial, Religious and Disability Harassment

Harassment related to Sexual Orientation or Belief or Religion

Harrassment related to Age

Harassment Other than by Discrimination (Including Bullying)

Not Complying With Lawful Instructions

The Terms of the Contract

Hours of Work

Location

Holidays

Unauthorised Absence

Poor Attendance Record and Ill Health

Conduct

Capability

Long-term Sickness Absence

Disability Discrimination

Qualifications

Redundancy

Redundancy on Changing Working Hours

'Bumped' Redundancies

Fairness of the Dismissal

Grounds for Selection

Disclosure of Selection Criteria

Suitable Alternative Employment

Consultation

Statutory Redundancy Payment

Not Fitting In

Refusal to Perform Changed Duties

Refusal to Retrain

Failure to Agree New Terms and Conditions

Health and Safety

Remedies

Company Policies

Smoking Policies

Computer Abuse

Drug and Alcohol Dependencies

Drugs To Be Aware Of

Signs of Alcohol and Drug Abuse

Misconduct Under the Influence of Drink and Drugs

Alcohol and Drug Abuse Outside Working Hours

Breach of Confidentiality

Confidential Information/Whistleblowing

Terms of the Contract

Whistleblowing

Civil Service

Private Sector

Disclosure Required by Law

Assisting Competitors

Breakdown of Trust and Confidence

Dismissal of a Spouse

Dismissal Because of Spouse's Employment