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

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The new statutory disciplinary and dismissal procedures

6 04 2009

For T.S Eliot, April was the cruellest month.  For employment lawyers it can be the busiest because of the plethora of new legislation and statutory instruments being introduced.  This year is no different and today sees The Employment Act 2008  come into force, replacing the discredited Employment Act 2002 (Dispute Resolution) Regulations 2004.  In The Wasteland, TS Eliot wrote “what are the roots that clutch, what branches grow out of this stony rubbish?”.  Admittedly Eliot was talking about the human condition and the moral and spiritual bankruptcy of modern society, rather than the 2004 regulations, but there is even so great  resonance in those words for employment lawyers. Few people have had anything good to say about the rules and today they are abolished, replaced by a set of rules that are much less rigid but will give rise to other problems in the future.

The main change in the new regulations is that an ACAS Code of Practice has been introduced and it has statutory force. It is brief, only ten pages long, but it sweeps the old system aside.  The Code is supplemented by an ACAS Guidance booklet of approximately 80 pages long and which is advisory rather than legally binding. The main changes are these;

1. It replaces the old system of extensions of time for issuing proceedings if disciplinary processes are still ongoing, or where a grievance has been raised.  There is no longer a 28 day stay on proceedings before an ET being issued after the grievance has been raised. Now ET proceedings can be issued even if a grievance hasn’t been issued.

2. There will no longer be an automatically unfair dismissal where there has been a failure (any failure) to follow the rules.  There will be no consequential 10 – 50% increase/decrease in the amount of compensation following failure by one party to abide by the rules.  Instead an ET will have a discretion, where it is just and equitable to do so,  to increase/reduce an award of compensation by up to 25% where (1) a relevant code of practice applies, and (2) there was a failure to follow the code and (3) that failure was unreasonable.  In my view although this is more flexible than the old rules, it will lead to uncertainty because different ETs will take different views on what constitutes an unreasonable failure.

3.  The “modified” procedures in both disciplinary and grievance procedures is swept away, meaning there is no duty on an employer to hold these procedures for ex-employees.  This is welcome.

4. The new rules do not apply to redundancy processes and it is debatable whether they apply to ill-health/incapacity dismissals.   Also they don’t apply to dismissals upon expiry of fixed term contracts. In my view ETs will probably look to the Code of Practice when considering the fairness of the procedure used by employers in these situations, so it would be a rash employer that decided to ignore them in redundancy/expiry of fixed term and ill health situations. In the case of collective redundancies (ie more than 20 persons selected in a three month period) employers are required to consult with employees anyway, but the issue may arise in small scale redundancies of less than 20 people.

In judging whether an employer has acted unreasonably, an ET will have regard to the size and resources of the employer.  In other words, more will be expected of bigger employers than smaller outfits when considering if they have acted reasonably.

However, it is not goodbye to the old rules just yet.  A complex system of transitional provisions exist and close regard has to be had to them when deciding whether the old rules apply at the moment, or the new.  Basically, if the “trigger” event (being the disciplinary issue or grievance) occurred before the 6th April then the old rules will apply.  If the trigger event occurs on or after the 6th then the new rules apply.  Where matters get complicated is where (in grievance cases) the act complained of started before the 6th but continues after that date.  If that situation applies to you, seek legal advice.

I’ll deal with more aspects of the new rules in later posts.  In the meantime if you have any queries please do not hesitate to contact me on 0207 464 8433 or email at michaelscutt@dalelangley.co.uk

A slightly different version of this post will appear in the Docklands and Peninsula newspapers week commencing April 14th





There may be trouble ahead …

26 02 2009

And whilst there may well be music and moonlight and love and romance somewhere,  HR bods and employment lawyers probably won’t  be looking forward to facing the music (or dancing for that matter) when it comes to dealing with the Employment Act 2008.  It comes into force (or should that be farce?) on the 6th April and repeals the hugely criticised Employment Act 2002.   In fact, there definitely will be trouble ahead.

Before I get into the nuts and bolts of the new legislation though, how did we get into this situation for those who haven’t been keeping up, or haven’t had the misfortune to get entangled in the current web of appeals, grievances, rights of appeal, extendable deadlines and percentage uplifts/reductions  for non-compliance?  Simply because the government became concerned in the closing years of the last century and the early ones of this that the number of cases being filed at Employment Tribunals (E.T) was increasing rapidly, threatening to swamp the system (see footnote below on this).   So they decided, not unreasonably, that it would be better if employers and employees could settle their differences without needing to bother the E.Ts.  Additionally, many smaller employers did not have grievance or disciplinary procedures in place, so the introduction of statutory disciplinary and grievance procedures helped to establish necessary internal procedures for dealing with disputes was a good plan. It was stipulated that in any disciplinary situation there would be a three stage process – a letter from the employer setting out the alleged disciplinary fault, a meeting to discuss and then a right of appeal.  A grievance by an employee would follow the same basic process but at the employee’s instigation.  So far so good.

Unfortunately, the system introduced with this laudable aim, by the Employment Act 2002, and the Employment (Dispute Resolution) Regulations 2004 made the whole situation much more complicated than it needed to be.  There have been two central difficulties.  Firstly, the rules allowed for an extension of time for issuing ET proceedings, in certain cases, up to six months from the usual three. This seemed simple until you were faced with a claimant with multiple claims.  Secondly, if an employer did not follow the disciplinary process religiously then they risked a finding of automatically unfair dismissal if the claim ever got to an ET which could result in the ET increasing the award it made to the employee by between 10 – 50%, depending on the heinousness of the procedural failure.  The end result of all this was that lawyers on both sides got involved much sooner, disputes became more entrenched and the number of cases filed at ETs kept on rising.

The government commissioned the Gibbons review, which led to the Employment Simplification Bill, which itself became simplified to the Employment Act 2008. It  relies heavily on a new ACAS Code of Practice, which will be legally binding, albeit it is still in draft form.  In turn the Code of Practice is supplemented by a Guide (called “Discipline and grievances at work: The ACAS Guide”) which is purely a guide and not law.  The main changes this structure brings about are as follows:  Firstly the extendable limitation periods for issuing claims will go.  From the 6th April 2009 in the vast majority of cases, there will only be three months from the dismissal or the event giving rise to the claim in which to issue proceedings at the ET. Extensions will only be possible if “just and equitable” (for discrimination claism) or “not reasonably practical” (for unfair dismissal claims), both of which are stiff tests.  Also, the automatic increase in ET awards for failure to follow the correct procedure will also be replaced by a discretionary system.  The ET will be able to award up to a 25% increase if it considers it just and equitable to do so if the Code of Practice applies and either the employer or employee has unreasonably failed to comply with the terms of the code. 

This will lead to confusion as ETs around the country decide on what act or omission was a failure to comply and, whether the offending party had a reasonable excuse.  This is further complicated by the ET being allowed to take into account the size of the employer when considering what it would be reasonable for them to do.  In other words a failure to comply with a provision of the Code  may be unreasonable for, say, a company with of the size and resources of BP, but not for a small firm of builders without any HR or legal resources.  On the face of it this is common sense, but it does mean that advising clients in the future will become harder and advice necessarily more uncertain.

My favourite amendment though concerns the new Grievance procedures. Under the rules currently in force, a grievance must be submitted in writing and failure to follow the grievance process can lead to increased/reduced awards as with the disciplinary process.  It is also necessary for 28 days to have passed between the grievance being lodged with the employer and filing proceedings at the ET (failing which the claimant cannot proceed).  The new Act sweeps all this away and doesn’t even provide that a grievance must now be in writing.   Madness! The new Code defines a grievance as any “concerns, problems, or complaints that employees raise with their employers”. The effect of this is that the system will be open to abuse from all sides: employees will be able to claim that the conversation with their line manager by the coffee machine at 4.55 one Friday afternoon x weeks ago was, in fact, a grievance.  Unscrupulous employees can then “reverse engineer” history to suit themselves.  Similarly employers will be able to claim never to have been made aware of the grievance.  In one sense this doesn’t have the impact that it would if the statutory uplift for non-compliance was still in force, but it will lead to a good deal of confusion and dispute and will do nothing to promote harmony in the workplace. 

There are many other aspects to the new rules which I shall write about in the forthcoming weeks as issues arise and get resolved, or as major confusion arises.  Watch this space. 

 

 

 

 

 Footnote

In 1999-2000 according to the ET’s own figures, 104,000 cases were filed.  There was a slight dip (bizzarely) in 2002/03 to 98,617 and then an increase to 115,039 in 2005/2006 after the new system was brought in.  In 2006/07, the last year for which figures are available there were 132,577.  Even the ETs own figures don’t show a relentless year on year rise – in 2004/05 the numbers declined to 86,181.