Submitted by: Thomas Brangam.
Question for Section B: For the past 14 years, Barry has worked in the despatch office of Deliver to Your Door Parcels Ltd, a company that specialises in the delivery of bulky and awkward packages to consumer and business recipients. He has always been the most honest of employees although never a particularly efficient one. In the years he has worked for his employer he has made many costly mistakes in the delivery of parcels, and at the beginning of 2020 was on his final warning. In March 2020, a valuable parcel went missing and another employee of Deliver to Your Door Parcels Ltd (George) informed Harry, the senior manager in charge of the despatch office, that Barry had stolen it. This was false and was an allegation made up by George to divert attention from the fact that it was his mistake that resulted in the loss of this parcel. When Harry learned of this allegation he lost his temper, started swearing at the top of his voice, summoned Barry into his office, and immediately dismissed him. Advise Barry as to whether he might have any claim for redress against Deliver to Your Door Parcels Ltd on account of the above events.
Introduction
This case concerns the law of unfair and wrongful dismissal. In particular, the principal issue is whether Harry’s summary dismissal of Barry was justified, and subsequently, if vicarious liability may be imposed upon the respondent, Deliver to Your Door Parcels Ltd (DYDP). Barry may claim for unfair and wrongful dismissal in tandem, however, he cannot avail of double damages if both claims succeed. These claims will be addressed sequentially.
Equally, mediation is not advised in this case, as the Advisory, Conciliation and Arbitration Service (ACAS) regards it as inappropriate where ‘a decision about right or wrong is needed.’[1] Thus, because Barry was dismissed on the basis of George’s false allegation, and no disciplinary or investigative procedure occurred, mediation may prove unsuitable.
Unfair Dismissal
First, the Employment Rights Act 1996[2] provides employees with statutory protection against unfair dismissal.[3] In light of his employment with DYDP, Barry enjoys this protection. Notably, however, Barry’s case does not constitute automatic unfair dismissal, as it does not satisfy the relevant criteria.[4] Therefore, if he is to succeed in his claim, he must prove that he was dismissed, and begin legal proceedings within three months of his employment contract’s termination.
On the facts, dismissal would seem evident, as Harry summoned Barry into his office and ‘immediately dismissed him.’ Still, it is not stated when this dismissal occurred, or what was said during this encounter. Indeed, given Harry’s anger at the time, the words spoken to Barry may have been ambiguous. Hence, further information on this issue would be beneficial, as it may clarify the date of termination of Barry’s employment contract.
Moreover, Barry should be aware that his 14 years working at DYDP satisfies the requirement of two-years continuous service.[5] Therefore, DYDP would likely assert before an employment tribunal that Barry’s dismissal occurred on the basis of his conduct.[6] Indeed, stealing a valuable parcel from one’s employer almost certainly constitutes gross misconduct, which is an admissible reason for summary dismissal. However, the employment tribunal would have to be satisfied that DYDP acted reasonably in treating this conduct as a sufficient reason for dismissal.[7]
In this case, however, it would not be equitable to find that the respondent’s decision was justified, as no disciplinary or complaints procedure was provided, and no attempt was made to examine or obtain further evidence. ACAS recommends a reasonable investigation into allegations of misconduct and a disciplinary hearing where allegations may be challenged by the accused employee.[8] Equally, the Labour Relations Agency advises the same for employers based in Northern Ireland.[9] Thus, although these codes of practice are not binding, the relevant tribunal would take them into account when determining whether DYDP’s decision to summarily dismiss Barry was fair.[10]
Still, an evidential issue may arise, as the House of Lords held in Devis v Atkins[11] that an employer’s decision must be judged on what they knew or ought to have known at the time of dismissal.[12] Applying this, it may be contended that Harry’s decision was justified, as it is unlikely that he was aware that George’s allegation was false and that he had mistakenly lost the parcel. Moreover, given Barry’s ‘many costly mistakes’ and the fact that he was on his last warning at the beginning of 2020, it was perhaps not so unreasonable for Harry to summarily dismiss him.
That being said, it is unlikely that this argument would hold water as Harry did not investigate George’s allegation. This is particularly relevant, as Barry has always been ‘the most honest of employees.’ Hence, Barry may contend that Harry ought to have known at the time that George’s allegation was suspect, as it contrasted with his record of honesty. Therefore, it would seem likely that Barry would succeed in claiming for unfair dismissal, as it would be anomalous for such a claim to fail against an employer who completely ignored the disciplinary and complaints procedure.
Unfair Dismissal Remedies
Accordingly, the relevant employment tribunal would first consider the potential for reinstatement or re-engagement.[13] Still, it is unknown if Barry wishes to return to DYDP, or if he has achieved alternative employment in the interim. Equally, the conduct of George and Harry may incentivise him not to return to the despatch office. However, if Barry’s unfair dismissal claim succeeds, Harry and George would likely face disciplinary action, or even termination.
Indeed, George’s dishonesty may even allow Barry to seek a civil remedy for slander,
and ‘swearing at the top of his voice’ may also lead to Harry losing his job as senior manager. Moreover, although Barry should be aware that such orders are exceedingly rare, the Supreme Court recently upheld an employment tribunal’s order for reinstatement of a fingerprint officer in McBride v Scottish Police Authority.[14] Significantly, Lord Hodge also acknowledged the argument that reinstatement does not require ‘the recreation of the precise factual conditions at the point of dismissal.’[15]
Thus, there is some potential for Barry to be reinstated with additional benefits or responsibilities as compensation. Yet even if such an order was granted, a tribunal cannot force DYDP to take Barry back as an employee. It may also not be practicable for DYDP to reinstate him, as we do not know if his position at the despatch office has since been occupied. This would be a further factor for the tribunal’s consideration.[16]
Therefore, it is most likely that the employment tribunal would grant Barry compensation. This would consist of a basic redundancy award capped at £15,750, alongside a compensatory award capped at one year of his gross pay which would seek to recompense him for the benefits that he has lost.[17]
Accordingly, the appropriate amount for Barry’s basic award would be one and a half weeks’ pay for a single year of employment in which he was not below the age of forty-one.[18] Alternatively, if Barry was not below the age of twenty-two during this time, he would be granted one week’s pay per year,[19] or half a week’s pay for each year he was below the age of twenty-two.[20] Likewise, Sir John Donaldson held in Norton Tool Co v Tewson[21] that the compensatory award reflects the benefits that an employee has lost because of their dismissal. Hence, in Barry’s case, considerations may include the earnings that he may lose in the future, or the unethical manner in which he was dismissed.
Barry should also be aware that the tribunal is likely to adjust his compensatory award by up to 25 percent on the basis of DYDP’s unreasonable failure to comply with the ACAS Code.[22] The same will also apply if the despatch office is based in Northern Ireland, in which a tribunal may even adjust the award by up to 50 per cent to reflect the respondent’s failure to adhere to the relevant Code.[23]
Wrongful Dismissal
Second, if Barry wishes to claim for wrongful dismissal, he must show that his dismissal breached his employment contract. Barry should also be aware that wrongful dismissal concerns the common law and does not require evidence of a minimum length of service. Equally, claims of up to £25,000 must be brought before an employment tribunal within three months of his contract’s termination, yet if his claim proves more valuable, he may bring it to the county court or High Court.
Nevertheless, in order to ascertain his contractual rights in the event of termination, Barry’s contract of employment should first be examined. However, the details of which are not stated in this case, and thus one cannot be sure as to what Barry’s contractual rights are. For example, Barry may be contractually entitled to a sum payable on termination, and thus further information is needed to clarify this point.
However, the first requirement for a wrongful dismissal claim is that that employer terminated the employee’s contract without providing adequate notice.[24] Applying this, Barry would be entitled to 12 weeks minimum notice, as he worked at DYDP for 14 years.[25] Though this statutory minimum would not apply in this case, as at common law, it is possible for an employee to be dismissed summarily. On this point, Lord Evershed MR held in Laws v London Chronicle[26] that summary dismissal is justified where the employee disregarded a fundamental term of the contract.
As previously stated, Barry’s summary dismissal may be justified on the basis of his alleged gross misconduct. Again, this potentially raises an evidential issue regarding what Harry knew at the time of the dismissal. However, if the tribunal found that DYDP was not justified in summarily dismissing Barry, the respondent would be required to provide Barry with his notice pay. Still, a difficult issue may arise if Barry was entitled to a bonus which he would have received but for his contract’s termination.
Here, the case of Société Générale, London Branch v Geys[27] is of relevance, in which the managing director of a bank was one day escorted from his work and told not to return.[28] Significantly, the Supreme Court held that the claimant was entitled to his bonus, as his employment contract did not automatically end due to this repudiatory breach, but ended when the bank exercised its contractual right to dismiss two months later.[29]
Therefore, if Barry was entitled to a bonus despite his many costly mistakes, it may be argued that this judgment would allow him to choose between affirmation of his contract or acceptance of its termination. Still, it is difficult to state whether Société Générale[30] would apply, as it is potentially confined to its own facts. Indeed, as Sarah Leverton has commented, it would be exceedingly rare for a case concerning the date of employment contract termination to carry ‘such huge financial implications as it did in the present case.’[31]
Consequently, the application of this judgment to Barry’s case remains ambiguous, and even so, it would seem unlikely in light of his record for Barry to be entitled to a bonus. Equally, even if Barry was granted the choice to affirm, he should be aware that specific performance of his employment contract cannot be granted,[32] and thus the relevant court or tribunal could not order DYDP to take him back. Thus, for these reasons, Barry should primarily pursue a claim for an unfair dismissal instead.
Conclusion
In conclusion, one cannot say whether a claim for wrongful dismissal is advisable, as too little is known about the contents of Barry’s employment contract. Therefore, on the known facts, a claim for unlawful dismissal would seem most reasonable, as it very likely to succeed. Accordingly, the remedy that Barry may wish to seek is dependent upon his own preference.
Whilst it is very unlikely that an employment tribunal would order reinstatement or reengagement, these orders remain a possibility. Still, a compensatory award would seem more probable. Yet, in order to accurately quantify the sum of damages that Barry would be granted, further information is required.
Bibliography:
Case Law:
Devis v Atkins [1977] AC 931
Laws v London Chronicle [1959] 1 WLR 698 CA.
McBride v Scottish Police Authority [2016] UKSC 27.
Norton Tool Co v Tewson [1973] 1 WLR 45.
Société Générale, London Branch v Geys [2013] 1 AC 523.
Journal Articles:
Leverton S, ‘Contracts of Employment: Repudiatory Breach Must Be Accepted to Terminate Employment Contract’ (2013) 967 IDS Employment Law Brief 5.
Legislation and Other Instruments:
Code of Practice in Disciplinary and Grievance Procedures (Labour Relations Agency 2011) <https://www.lra.org.uk/sites/default/files/2019-05/Code%20of%20Practice%20on%20Disciplinary%20and%20Grievance%20Procedures%20-%203rd%20April%202011.pdf> accessed 21 April 2020.
Discipline and Grievances at Work (ACAS 2019) <https://archive.acas.org.uk/media/1043/Discipline-and-grievances-at-work-The-Acas-guide/pdf/DG_Guide_Feb_2019.pdf> accessed 19 April 2020.
Employment Rights Act 1996.
Trade Union and Labour Relations (Consolidation) Act 1992.
Reports:
‘Dealing with Dismissal and Compensated No Fault Dismissal for Micro Businesses’ (Department for Business Innovation and Skills 2012) <https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/31536/12-626-dismissal-for-micro-businesses-call.pdf> accessed 23 April 2020.
[1] Discipline and Grievances at Work (ACAS 2019) <https://archive.acas.org.uk/media/1043/Discipline-and-grievances-at-work-The-Acas-guide/pdf/DG_Guide_Feb_2019.pdf> accessed 19 April 2020, p 9. [2] Employment Rights Act 1996. [3] ibid, s 94(1). [4] ibid, ss 100, 103A and 104. [5] ibid, s 108(1). [6] ibid, s 98(2)(b). [7] ibid, s 98(4)(a)-(b). [8] ACAS (n 29), p 16-17. [9] Code of Practice in Disciplinary and Grievance Procedures (Labour Relations Agency 2011) <https://www.lra.org.uk/sites/default/files/2019-05/Code%20of%20Practice%20on%20Disciplinary%20and%20Grievance%20Procedures%20-%203rd%20April%202011.pdf> accessed 21 April 2020, p 20. [10] Trade Union and Labour Relations (Consolidation) Act 1992, s 207. [11] [1977] AC 931. [12] ibid, [56]. [13] ERA (n 30), ss 114 and 115. [14] [2016] UKSC 27. [15] ibid, [34]. [16] ERA (n 30), ss 116(1)(b) and s 116(3)(b). [17] ibid, s 119. [18] ibid, s 119(2)(a). [19] ibid, s 119(2)(b). [20] ibid, s 119(2)(c). [21] [1973] 1 WLR 45. [22] ‘Dealing with Dismissal and Compensated No Fault Dismissal for Micro Businesses’ (Department for Business Innovation and Skills 2012) <https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/31536/12-626-dismissal-for-micro-businesses-call.pdf> accessed 23 April 2020, p 7. [23] LRA Code (n 37), p 30-31. [24] ERA (n 30), s 1(4)(e). [25] ibid, s 86(1)(c). [26] [1959] 1 WLR 698 CA. [27] [2013] 1 AC 523. [28] ibid, [9]. [29] ibid, [21]. [30] ibid. [31] Sarah Leverton, ‘Contracts of Employment: Repudiatory Breach Must Be Accepted to Terminate Employment Contract’ (2013) 967 IDS Employment Law Brief 5, p 8. [32] TULRCA (n 38), s 236.