How (not) to sack someone

14 09 2009

As an employer, if you want to avoid your name appearing in the Metro or any of the other free papers, try to avoid sacking employees suffering from cancer by email.  This is the moral from the recent report concerning Melinda Bolnar, a 27 year old teacher suffering from bowel cancer and who had just endured seven months of chemotherapy and given a 30% chance of survival.  According to the report it is alleged that her private school sacked her by email.  I should point out that the case is due to be heard at an Employment Tribunal later this year and the above report are merely the employee’s allegations against her employer and not the proven facts.

The report probably doesn’t give the whole story but it certainly gives the impression that Melinda was sacked without any form of disciplinary or capability procedure.  If that genuinely is the case the school might find themselves in difficulty when the case does reach the ET.

So (assuming that is what happened) what should an employer do if it wants to terminate the employment of an employee suffering from long-term illness?

The first and most important question is why should the employer want to terminate the employee’s employment?  This will be at the heart of any subsequent litigation that may arise.  The usual answer given by employers is that they could not afford to keep the position empty whilst the employee was away or that temporary cover could not be extended indefinitely.  Much will depend upon the role performed by the employee and the extent to which it is reasonable for the employer to reach the conclusion that dismissing the employee was reasonable in all the circumstances.  The size and resources of the business will be important too. What action might be reasonable for a small employer to take will be greatly different from a multi-national PLC or, for example, the NHS. How the employer treated other staff in similar circumstances on other occasions will be relevant: what are the contractual sick pay provisions, if any?

There are only a limited number of grounds on which dismissing an employee will be fair.  They include capability to do the job.  This can mean lack of ability of the employee to fulfil their role (i.e. incompetence) or it could include inability to do the job through sickness.  Problems can arise for an employer when the employee takes lots of short periods of time off sick (whether genuinely or otherwise) but when, as in the type of case under discussion here the employee is off for weeks or months.   

A prudent employer will properly investigate the reasons for the employee being absent and will try and establish when they might return.  This will need to be done with sensitivity and tact, which means good communications between employer-employee are going to be vital to make this work.  It will probably need medical evidence to be obtained and a well-drafted contract of employment should include a clause which allows the employer to send the employee to a doctor of its own choosing.  If the medical evidence suggests that the employee will be fit to return to work, even if on a gradually stepped basis at first, in a fairly short space of time, the business will need to think long and hard before dismissing.  On the other hand, if the absence looks like being lengthy then the employer may be justified in bringing the employment relationship to an end, provided it does so on grounds of (in)capability.

Where difficulties arise (as in Melinda Bolnar’s case) is where the employee feels there are other grounds for dismissal.  The Metro report states that she is suing for disability discrimination.  Much will depend, as usual, on who said or did what and when.  To avoid difficulties of this sort an employer needs to act clearly and openly about what it is doing and why. 

It needs to follow a proper process, as laid down by the ACAS Code of Practice introduced this April. In brief this means the employer investigating properly, inviting the employee to a meeting to discuss the issues, allowing them to be accompanied by a work colleague or Trade Union representative and to make their point.  Finally, the employee should be informed of their right to appeal the decision if it goes against them.  If the employer gets it wrong they can not only face a claim for unfair dismissal (with the potential for the award to be increased by up to 25% if they are deemed to have acted unreasonably) but also a claim for disability discrimination.  Claims under the DDA are not capped at the £66,200 maximum compensatory award, as with unfair dismissal cases.

Of course, all the above leaves aside the moral issue of whether it is the right step to take but and Courts/Tribunals don’t make judgments on moral grounds: the newspapers do that.

If you are an employer or employee requiring further advice on any of these issues, please get in touch with me at michaelscutt@dalelangley.co.uk or on 0207 464 8433





Constructive Dismissal – recent developments

24 07 2009

This post isn’t about Freddie Flintoff bowling 5-92 to defeat the Aussies at Lords (a very constructive dismissal in my view) but, sadly, is about some recent cases on the law relating to constructive dismissal.  The recent case of Bournemouth University Higher Education Corporation v Buckland [2009] EAT whilst not being as newsworthy as this week’s actions at Lords is, nevertheless, important stuff on the difficult topic of constructive dismissal.  In my experience few topics cause as much confusion or are as overused as constructive dismissal.  Every second client thinks they have or are about to suffer it.

So, what is it about? The definition provided by the Employment Rights Act 1996 s.95(1)(c) is that constructive dismissal occurs when an employee “resigns in circumstances such that he is entitled to terminate his [contract of employment] without notice by reason of the employer’s conduct”. In other words the employer commits an act (or even fails to do something that he said he would) and the employee’s response is to resign in protest. The breach doesn’t have to be of an express term of the policy (like a failure to pay salary, for instance): implied terms can be breached and the usual one that gets raised with constructive dismissal is that the employer has breached the implied term of trust and confidence.

The employer must be said to have committed a repudiatory (i.e. fundamental) breach of contract – it must be more than just unreasonable behaviour by the employer: it just go to the heart of the employment contract.  This is called a WRONGFUL dismissal (which is NOT the same as an UNFAIR dismissal).  If the employee then resigns in response to this breach he is said to have ACCEPTED the repudiatory breach.  The contract is then discharged and the employee is free of all obligations under that contract.  On the other hand, if the employee doesn’t accept the breach or resigns over some unrelated issue he may be said to have AFFIRMED the breach.

For an employee claiming constructive dismissal is a big step.  The burden of proof is on the employee to (1) show that the employer was in breach, (2) that it was a fundamental breach, and (3) that he (the employee) resigned in response and (4) the employee mustn’t delay in acting.  Effectively the employee resigns and walks out without his notice monies or any other compensation because the employer won’t pay notice monies to an employee who walks out.   I often call it, perhaps rather melodramatically, the “nuclear option”. 

A constructive dismissal is not always an unfair dismissal. It will be if the employer cannot show a potentially fair reason for the dismissal. The ERA lays down five potentially fair reasons – (1) redundancy, (2) capability, (3) conduct, (4) frustration of contract and (5) some other substantial reason.  The employer needs to show that the action he took or threatened comes within one of these five categories. If he can’t then the dismissal is unfair.  If he can show that the reason for dismissal was within one of these categories then he must then prove that he (the employer) acted reasonably in relying upon that reason for the dismissal.

How is that established? The case of Buckland (above) dealt with this issue.  In most unfair dismissal cases before an Employment Tribunal the ET will be asked to consider whether employer’s actions were within the “band of reasonable responses” test – which is not where the ET decides what decision it would have taken if it had had to make that decision but whether the action the employer took was a reasonable response to the employee’s situation.  Buckland confirms that the band of reasonable responses test is NOT relevant in cases of constructive dismissal.  This has been an issue for some time in this area.  What is the relevance to employees?  This decision confirms that “mere” unreasonable conduct by the employer is not sufficient to establish constructive dismissal: there must be a breach of contract that goes right to the root of the employment contract and shows that the employer no longer wished to be bound by its terms.  This raises the bar for Claimants in an already difficult area.

The second recent case that grabbed my attention is Wishaw and District Housing Association v Moncrieff EAT.  It illustrates another aspect of the constructive dismissal situation: what if you don’t have one particular act or event constituting the repudiatory breach, but a series of events leading up to a “final straw”?  This case dealt with that issue and confirmed that the final incident has to be more than trivial.  The cumulative effect of all the breaches has to amount to a fundamental breach of contract. 

I would urge any employee contemplating claiming constructive dismissal to get legal advice as a matter of urgency before taking (of failing to take) any action.  Don’t rely on this post either!  Constructive dismissal is a complex subject and you need to look carefully at each case on its own merits before deciding what to do.





Will Court decision lead to an increase in dismissals?

16 06 2009

The House of Lords (HL) has finally handed down judgment in the case of Stringer v HMRC.  To say this decision has been keenly anticipated is an understatement.  I posted on it a little while ago.

The decision confirms that employees are entitled to accrue holiday pay whilst on long-term sick leave.  Some commentators have suggested that employers will want to dismiss those employees to avoid incurring even greater costs caused by the employee’s absence.  This will undoubtedly happen in some cases, but the risk to employers in adopting such a course is risky.  In doing so, they will risk the employee claiming for disability discrimination as well as unfair dismissal.  An employee on long term sick leave may well be able to successfully argue that they are disabled under the DDA.  Both employees and employers also need to bear in mind, of course, that one of the potentially fair reasons for terminating a contract of employment is capability (which includes incapacity to through illness/injury).  Any employer contemplating terminating an employee’s employment because of ill-health needs to proceed very cautiously.

The other main point of this decision is that employees who have previously been denied holiday pay whilst sick can renew their request for unpaid holiday pay for any period within the last six years.  This is because they will be able to argue that the employer has been in breach of contract and in the civil courts it is possible to sue for breach of contract for up to six years after the breach.  Employees will also be able to claim (in the Employment Tribunal) unpaid holiday pay as an unlawful deduction from wages. 

If you need further advice on this subject please contact me.





TUPE

7 04 2009

Apart from the post below I haven’t touched upon these regulations, mainly because they are not the most interesting regulations in the world to read.  However, I have been spurred on by posting on the case of Royden & others v Barnetts  (see below) and TUPE comes up quite a few times on the search engines as a keyword.  In future posts I will look at the TUPE issues on the insolvency of the employer as well as the consultation obligations imposed upon employers by TUPE.

So, what do the Transfer of Undertakings (Protection of employment) Regulations 2006 (TUPE) actually do?

It protects those employees where the employing business changes hands, by;

 (1) protecting them from dismissal because of the transfer,

(2) by requiring the employer to inform and consult those employees affected, and

(3) transferring all rights  liabilities and obligations from the transferor company (“oldco”) to the transferee (“newco”).  

 

 

There must be more than a transfer of shares.  All employees employed by oldco at the point of transfer automatically move across to newco with the same terms and conditions of employment.  This means that if newco tries to provide amended terms and conditions to transferred staff they will be in breach of contract and may end up facing claims for constructive dismissal.

Furthermore, if newco dismisses transferring staff for a reason connected with the transfer that will be an automatically unfair dismissal , although if newco can argue that there were “economic, technical or organisational” reasons entailing changes in the workforce of either the Transferor or Transferee”  for the dismissal, it won’t be automatically unfair.  It might still be an unfair dismissal if the reason for the dismissal (not being the transfer) was also unfair. 

An ET would look at all the circumstances of the dismissal before making its finding.  In particular the ET will consider whether the employee was likely to have been dismissed even if the transfer had not occurred.  If yes then the dismissal will probably not have been for reason of the transfer, but it might still be unfair (i.e perhaps unfair selection for redundancy, or maybe discriminatory reasons were involved; the list is long).   One of the potentially fair reasons for a dismissal under the Employment Rights Act 1996 is “some other substantial reason” (SOSR).  For an employer to escape liability altogether for the dismissal it will have to show that the reason for dismissal comes within SOSR and that it was reasonable for them to rely upon that as the reason for dismissal. 

If an employee is found to have been unfairly dismissed (whether automatically or not) the maximum amount they can recover from an ET (up to February 2010 anyway) is £66,200 plus a basic award of £350 (or £525 depending on age) per week per year of service.  The employee needs 12 months continuous employment experience with oldco to be able to claim unfair dismissal.

Claims involving TUPE can be complex and if you are concerned about your position or think you might need legal advice do call me on 0207 464 8433 or email me on michaelscutt@dalelangley.co.uk





What the dooce?

11 03 2009

I’ve got to admit my ignorance, I’ve only just discovered the verb “to dooce” and what a great word it is!  There are various definitions but most include “to lose your job because of something that you wrote on your blog”.   Rather incongruously, it can also mean to be afflicted with constipation, although if you were about to lose your job because you spilled the beans on your employer,  it’s unlikely that constipation would be your main concern. 

It was the recently reported case of Kimberley Swann, the 16 year old girl from Essex, who was fired from her job as an adminstrator because she described her job as “boring” on Facebook that brought me up to speed with  this addition to the language.  For those who missed the story, Miss Swann worked for a company called Ivell Marketing & Logistics in Clacton  which is, I’m sure, a  fun and exciting place to work.  She had only been there three weeks when she posted an entry on Facebook stating that her job was “boring”.  Remarkably she didn’t even name her employer and it was only her colleagues with access to her Facebook page that put two and two together  and informed the company.

She was sacked on the basis that her comments were a “display of disrespect and dissatisfaction [that] undermined the [working] relationship and made it untenable”.  In other words a breach of the implied term of  trust and confidence that needs to exist between employer and employee.  Tellingly Kimberley had only been employed for three weeks and therefore had not acquired her employment rights.  In particular, because she had not got 12 months continuous employment experience with the company, she could not sue them for unfair dismissal. 

In my view had she been able to sue them the employers would never have taken this action.  It was clearly unfair.  The comment was not made during work hours but when she got home, so there couldn’t have been any issue about her not having her nose to the grindstone whilst actually at work.  Furthermore she did not mention the company’s name  online so the effect of her words would be very limited indeed.  

Finally, from the reports I’ve read the employer did not undertake any investigation or disciplinary process. Under the current law (which  will change on 6th April next)   that makes for an automatically unfair dismissal (had she been eligible to apply).

Many employers now seem to have rules and policies about the use of social networking sites during working hours (Jobsworth, of course, has few friends so the issue doesn’t arise for him) and more general internet usage policies have been in the workplace for as long as we’ve had the internet.  Repeated breach of such a policy might be a cause for dismissal after a proper investigation and appropriate warnings had been given.  Using the company’s computers to download pornography would constitute gross misconduct.  Employers need to consider carefully how their internet usage/social networking sites policies operate and what sort of behaviour they want to prevent, but I cannot imagine any policy being able to prevent what is, after all, probably just fair comment made outside work hours and not using work equipment.

The employer’s actions were really a vast over-reaction.  The TUC General Secretary, Mr Brendan Barber, said employers needed to have thicker skins when dealing with comments on social networking sites and that they wouldn’t dream of following their staff to the pub to see if  they  “were sounding off about work to their friends”.  Quite right too.  However, having read the report of the story in The Mirror  I wonder if the key to the story isn’t with the sentiment contained in the comment but in the actual words she used.  Apparently she wrote “first day at work!! So dull … im so totally bord (sic)”. 

One further definition of dooce is “to write repetitively on a subject for at least four years”.  I’ll be bearing that in mind from now on.