Unfair dismissal developments

Employers will be aware that failing to manage dismissals fairly can result in costly and lengthy proceedings. Some recent EAT decisions have considered the tricky issues of dismissal for gross misconduct and misconduct where there had been no previous disciplinary warnings as well as the effect of the statutory minimum notice period on the qualifying period of service for an unfair dismissal claim.

Dismissal for misconduct with multiple issues

In Mbubaegbu v Homerton University Hospital, the Employment Appeal Tribunal (EAT) considered whether it was fair to dismiss an employee for misconduct arising from a series of issues, none of which were gross misconduct.

Misconduct is one of the five potentially fair reasons for dismissing an employee, under section 98(2)(b) Employment Rights Act 1996 (ERA 1996). In determining whether a dismissal for misconduct is fair the Employment Tribunal will consider whether in the circumstances, the employer acted reasonably in dismissing for that reason. This often results in an Employment Tribunal questioning whether the employer undertook a fair investigation in reaching the decision to dismiss and whether the employer acted reasonably in treating the misconduct it identified as a sufficient reason for dismissal.

Background

The Claimant (a consultant orthopaedic surgeon of black African origin), who had no previous disciplinary warnings, was dismissed by reason of gross misconduct. New department rules and responsibilities had been introduced and consultants were advised that their compliance with them would be monitored. An external HR investigator carried out an investigation and found that the Claimant, alongside four other consultants, had not complied with the new rules and regulations. Disciplinary proceedings were taken against four consultants, including the Claimant. During the investigation, the Hospital found other failings on the Claimant’s part and concluded there had been a breakdown of trust and confidence and he was dismissed. The others were sanctioned but not dismissed.

The Claimant brought claims of unfair dismissal, wrongful dismissal (which relates only to an employee’s entitlement to notice of dismissal) and race discrimination in the Employment Tribunal and they all failed. The Claimant applied to have the decision reconsidered after the General Medical Council decided, in separate proceedings, that no action should be taken against him on the basis that the evidence did not support a conclusion that his conduct or practice was likely to result in a finding of impaired fitness to practice. The Employment Tribunal refused the reconsideration application and the Claimant appealed to the EAT.

EAT decision

The EAT agreed with the Employment Tribunal that it was not necessary for there to be one particular act of gross misconduct in order for a summary dismissal to be fair. It concluded that it was “quite possible for a series of acts demonstrating a pattern of conduct to be of sufficient seriousness to undermine the relationship of trust and confidence between employer and employee”. There is no authority to suggest that there must be a single act amounting to gross misconduct before summary dismissal would be justifiable or that it is impermissible to rely upon a series of acts, none of which would, by themselves, justify summary dismissal. The EAT also saw “no reason why an employer would be acting outside the range of reasonable responses were it to dismiss an employee in whom it had lost trust and confidence in this way”.

Comment

This decision highlights that conduct which undermines the implied term of mutual trust and confidence in the employment relationship could amount to gross misconduct. Additionally, although summary dismissals are not usually the outcome of a first disciplinary hearing, it does not mean that it constitutes a rule to be applied in every case as there will be occasions where it is reasonable and proper to summarily dismiss, as it was in this case. This emphasises the importance of making decisions on a case-by-case basis.

However, the EAT in this case held that the test for wrongful dismissal was different to the test for unfair dismissal and the Employment Tribunal should have considered whether the Claimant committed a “repudiatory breach of contract” rather than looking at “fairness”. The Employment Tribunal in this case failed to specify whether the breaches which were found to have occurred were sufficiently serious to amount to a repudiatory breach and so the EAT remitted the case back to the same Employment Tribunal to make the necessary findings in relation to wrongful dismissal.

Dismissal for misconduct, without prior warnings, can be fair

In Quintiles Commercial UK v Barongo, the EAT similarly considered whether dismissal for “misconduct” as opposed to “gross misconduct” can be fair, even without prior warnings.

Background

The Claimant failed to complete mandatory training courses and was subsequently subjected to disciplinary proceedings by his employer. The dismissing manager concluded that trust and confidence had been broken and dismissed him, with notice, for “gross misconduct”. The Claimant appealed his dismissal and, on appeal, the employer re-categorised the misconduct as “serious”, but still upheld the decision to dismiss. The Employment Tribunal held that the dismissal was unfair on the basis that prior warnings should be given before “serious” misconduct could justify dismissal.

EAT decision

The EAT upheld the employer’s appeal on the basis that under section 98(4) ERA 1996, there was no rule that dismissing an employee for conduct that fell short of gross misconduct, must be unfair, even if prior warnings have not been given. The question for the Employment Tribunal was therefore whether the actions and decisions of the employer fell within the range of reasonable responses that a reasonable employer in those circumstances and in that business might have adopted and this depends on the facts of each case.

In this case, the Employment Tribunal took a rigid view that where conduct fell short of gross misconduct, dismissal could only be appropriate if other warnings were in place. The EAT decided that the Employment Tribunal should have considered the entire circumstances of the case, including the ACAS Code of Practice on Disciplinary and Grievance Procedures and the employer’s disciplinary procedure. The Employment Tribunal had substituted its view for that of the employer which is impermissible. The case was remitted to a new Employment Tribunal for reconsideration.

Comment

This judgment demonstrates that just because misconduct is categorised as falling short of gross misconduct does not mean that a dismissal for that reason will be unfair, even if the employee has received no warnings. Similarly, if misconduct by an employee is categorised by the employer as gross misconduct, it does not mean that the dismissal of the employee will necessarily be fair.

This case is similar to Mbubaegbu regarding misconduct and a breakdown of trust and confidence being fair reasons for dismissal. Both decisions suggest that employers should carefully consider the circumstances of each case and whether the decision is within the band of reasonable responses. The EAT in this case held that an Employment Tribunal will often find that a dismissal in such circumstances falls outside the band of reasonable responses. Employers should also be cautious when considering dismissing employees for misconduct as they should still consider the ACAS Code, which indicates that warnings should generally be given first.

Additionally, the question of whether the employee’s actions amount to gross misconduct or misconduct will still be relevant for the purposes of a wrongful dismissal claim.

No extension of qualifying period for gross misconduct dismissal

In Lancaster & Duke Ltd v Wileman, the EAT considered whether an employee could extend the length of their qualifying service, by adding the statutory minimum notice period, in order to claim unfair dismissal in a case of gross misconduct.

The qualifying service period for employees to bring ordinary unfair dismissal claims under section 108(1) ERA 1996 is two continuous years where employment started on or after 6 April 2012. However, it is important to note that there are a number of unfair dismissal claims where no qualifying period of service is required, for example, whistleblowing claims.

Background

The Claimant was dismissed two days before she had accrued two years’ service. She claimed unfair dismissal and attempted to add the statutory notice of one week to her length of service, in order to have the requisite service for an unfair dismissal claim. One of the preliminary issues the Employment Tribunal had to decide was whether the Claimant had accrued the necessary two years’ continuous employment service by her effective date of termination (EDT). It  applied  section 97(2) ERA 1996 and concluded that where an employer dismisses an employee with less than the statutory minimum notice under section 86(1) ERA 1996, the EDT should be the date on which the statutory notice period (one week in this case) expires, thereby meaning the Claimant had continuous service of two  years and five days. Subsequently, the Employment Tribunal went on to conclude that she had the requisite service to bring an unfair dismissal claim and that she was unfairly dismissed.

EAT decision

The employer appealed and argued that under ERA 1996, they were entitled to dismiss the Claimant without statutory notice because of her alleged gross misconduct and therefore, she did not have the requisite service to bring an unfair dismissal claim.

The EAT upheld the employer’s appeal and held that the extension of the termination date by the statutory minimum notice period does not apply in cases where the employer is entitled to summarily dismiss by reason of the employee’s conduct, applying section 86(6) ERA 1996.

Similarly to the Mbubaegbu and Barongo cases, the question of whether the employee’s actions amount to gross misconduct or something less will also still be relevant for the purposes of a wrongful dismissal claim. As the Claimant had not brought a wrongful dismissal claim in this instance, the Employment Tribunal did not make a finding about whether she had committed gross misconduct and so the case was remitted to the Employment Tribunal for further findings.

Comment

Although this rationale has often been assumed in previous decisions, there has not been a definitive determination until this case so it is now clear that where employees are dismissed by reason of gross misconduct, and without notice, they will struggle to rely on the addition of their statutory notice period to extend their length of service when attempting to bring an unfair dismissal claim in the Employment Tribunal.

One of the EAT’s considerations was the application of section 86 ERA 1996 a whole, and that each clause should be considered equally and not displace one another (as the Employment Tribunal had suggested). This demonstrates the importance of carefully construing clauses in legislation.