Unfair dismissal - Case Round-Up: November 2018

In this month's case round-up, Mark Shulman, consultant solicitor with Keystone Law, looks at the twists and turns in four unfair dismissal appeals.

Mark Shulman**, Consultant Solicitor at Keystone Law
*What does giving "notice" mean? We learn from the case of [East Kent Hospitals University NHS Foundation Trust v Levy*]() UKEAT/0232/17/LA that the answer to this question is contextual.

The Claimant worked in the Records Department of the East Kent Hospitals University NHS Foundation Trust ("the Trust"). She received a conditional offer for a post within the Trust's Radiology Department, but this offer was subsequently withdrawn (due to the Claimant's poor absence record). By then, she had written to the hospital's Operation Manager saying: "Please accept one month's notice from the above date". The Operations Manager to whom this was addressed responded the same day accepting the Claimant's "notice of resignation" and referring to her last working day within the Records Department. He did not complete a staff termination form (which was only applicable for those leaving the Trust's employment and was not to be used for internal transfers) and no reference was made to the Claimant leaving her employment more generally.

After the job offer was withdrawn, the Claimant sought to retract her "notice of resignation" but the Trust refused to agree to this. The Operations Manager was advised by HR that there was no obligation to accept a retraction of a resignation. The view was taken by senior management within the Trust that as the Claimant's absence record was poor, she would not be offered a position with the Trust in open competition and so should not be permitted to retract her resignation. It confirmed her last day of service with the Trust and the Claimant contended that this was a termination by the Trust and constituted unfair dismissal.

*Unfairly dismissed
*An ET upheld the claim. It found that her letter had been ambiguous as to whether she was giving notice of leaving the Records Department or giving notice to leave her employment with the Trust. The ET concluded that "… an objective consideration of the letter would lead a reasonable observer to conclude that the Claimant was doing no more than informing [the Operations Manager] at the earliest opportunity of her intention to accept what was then a conditional offer of a new role: it was not a termination of her employment". It found that when the Operations Manager received the Claimant's letter of notice, he had not understand it as being a resignation from her employment with the Trust.

The Trust appealed, contending that the ET was wrong to find that the words used by the Claimant in her "resignation" letter were ambiguous.

Special circumstances
The EAT stated that in many circumstances the phrase "giving notice" might well be capable of only one meaning (i.e. the party giving notice is terminating the employment relationship). But the position in the present case was complicated by the fact that the Claimant was expecting to leave one job with the Trust to take up a new position in the Radiology Department.

The EAT referred to the fact that in special circumstances it might be unreasonable for words to be construed at face value. This possibility was addressed by the Court of Appeal's in [Willoughby v CF Capital plc]() [2012] ICR 1038:

"The "special circumstances" exception…is…a cautionary reminder to the recipient of the notice that, before accepting or otherwise acting upon it, the circumstances in which it is given may require him first to satisfy himself that the giver of the notice did in fact really intend what he had apparently said by it."

Therefore, the ET could permissibly conclude that the wording in the Claimant's letter was not clear and unambiguous. There were special circumstances so that it would be wrong to take the reference to "giving notice" at face value.

Objective test
In the light of the ambiguity in the wording of the letter, the question then had to be answered as to who really ended the contract of employment? Although the case law was "not entirely consistent" as to the approach to be adopted, the parties in the present case agreed that the ET was correct to adopt an objective test (i.e. how would the Claimant's letter have been construed by the reasonable recipient?). That was something to be determined in the light of the particular circumstances known to the reader at the time, bearing in mind that the objective observer has to be an "informed observer".

In that light, the EAT dismissed the appeal stating that the ET was entitled to find that the reference to giving notice was related to the Claimant's particular position in the Records Department and was not a resignation from employment with the Trust.

*Was it fair to dismiss a Royal Marines reservist without any warning when he had committed himself to attending a non-obligatory 7-week training exercise without his employer's approval? Yes, said the EAT in [Hawkes v Ausin Group (UK) Ltd ]()*UKEAT/0070/18/BA.

The Claimant was a Royal Marines reservist and sought his employer's approval for leave to participate in a training exercise abroad. However, he did not explain that he had volunteered for a seven-week non-mandatory exercise. It was presented to the employer as something that he had to do and the impression was given that he had been called up for active service and that that was something which the employer simply had to accept.

When the employer then made its own inquiries, it discovered that the exercise was voluntary and that there was no obligation on the employer to grant leave for it.

The employer then called the Claimant to a meeting to explain that it was not sustainable for the business to have the most experienced person in sales out of the business for 7 weeks and that his employment was being terminated. The Claimant claimed his dismissal was unfair.

Reason for dismissal
The ET held that the reason for dismissal was "some other substantial reason" rather than a "reason relating to conduct". The primary concern of the employer was not whether the Claimant had behaved improperly, but whether it could continue to employ someone in the Claimant's role at his salary if he was going to be absent for seven weeks at a crucial time for the business.

*ET - dismissal not unfair
*In the light of that reason, was the dismissal unfair? No, the ET concluded. The Claimant had made it clear that he was going to be absent from work in the period of the exercise and nothing was going to make him change his mind about that. The Claimant had signed and returned an Additional Duties Commitment form to the Army and by doing so, had committed himself to attend the exercise. The employer had been in business for only one year and was not performing as well as had been expected. It only had four employees (the Claimant was the most senior and the most expensive.) It was coming up to the busiest time of the year for the business and the Claimant's absence would have an impact on the business beyond the period of his absence. A small, new, not very successful business could not continue to employ a Business Development Manager at a salary of £70,000 a year if that manager was going to be away from work for seven weeks at a crucial time.

The ET also concluded that it was difficult to see what a meeting before the decision to dismiss was made would have achieved. The parties had come to an impasse. The Claimant was going to attend the training exercise for seven weeks. The employer could not continue to employ him if he was going to be away for that length of time. Therefore a "parting of the ways" was inevitable and in those circumstances the dismissal was not unfair. Even if there was any procedural flaw (e.g. the failure to hold a meeting before deciding to dismiss), no compensation would have been awarded on the basis that rectifying that flaw would not have had any impact on the outcome.

The Claimant appealed, arguing the ET had impermissibly conflated matters that were relevant to a Polkey reduction with matters that were relevant to substantive unfairness. He also submitted that on the evidence, the ET was wrong to conclude that even if the Claimant had been warned that he would be dismissed, he would not have changed his mind about going to the training.

No conflation
In Polkey v A E Dayton Services Ltd [1988] 1 AC 344, Lord Bridge stated that:

"If an employer has failed to take the appropriate procedural steps in any particular case, the one question the industrial tribunal is not permitted to ask in applying the test of reasonableness posed by section 57(3) is the hypothetical question whether it would have made any difference to the outcome if the appropriate procedural steps had been taken."

Had the ET asked the impermissible question and conflated matters relating to a Polkey reduction (on compensation) with the test of unfairness under section 98(4)?

No, said the EAT. The EJ correctly considered the test under section 98(4) of the ERA 1996 as to "whether the Respondent acted reasonably in all the circumstances of the case…". Far from considering the hypothetical question of whether there would have been any difference to the outcome if a meeting had been held, the ET had in fact focused on whether the actual failure to hold a meeting before the decision rendered the dismissal unfair. As the Claimant's case was put on the basis that the failure to hold a meeting in advance of his dismissal was unfair, that was clearly something which the ET had to (and actually did) consider.

And the ET's separate Polkey analysis of whether taking the procedural steps (e.g. holding a meeting prior to dismissal) would have made any difference was done in the context of considering the alternative case had the dismissal been held to be procedurally unfair.

A change of mind?
The ET concluded that "There was nothing in the evidence to indicate that if the Claimant had been warned…he would have changed his mind". On appeal the Claimant argued that this finding was wrong and that as it was central to both unfairness and the Polkey reduction, that conclusion must be considered unsafe.

However, the EAT also rejected this ground of appeal. The difficulty for the Claimant was that there was substantial evidence to support the ET's conclusion that the Claimant was committed to the exercise and was not going to change his position. In view of "the numerous findings of fact supported by unambiguous evidence", there was no basis for suggesting the ET erred in law in coming to the conclusion that it did.

The Claimant had less than 2 years' qualifying service but was able to being an unfair dismissal claim because the reason for his dismissal was connected with his membership of a reserve force. Accordingly, pursuant to section 108(5) of the ERA 1996, the ET had jurisdiction to consider his complaint.

**Disparity of treatment
*Had an ET grappled with the allegation by a Claimant that his dismissal was unfair because there had been a disparity of treatment when compared to another employee? No, said the EAT in [Doy v Clays Ltd]()* UKEAT/0034/18/DA.

*The Claimant was dismissed for gross misconduct relating to threatening behaviour. His ET1 contended that losing his job was "disproportionate unfair dismissal". He described various incidents where no action had allegedly been taken against other employees by management. One such incident related by the Claimant concerned an occasion where the shift manager had seen a woman employee punch another employee in the face. A few weeks later she hit another worker. She still had her job and did not even receive a verbal warning.

Dismissal not unfair
The ET found that the Respondent had dismissed the Claimant for serious and persistent verbal threats and harassment against his line manager and his family and the dismissal was not unfair. The Claimant appealed on the grounds that the ET had not dealt with the Claimant's argument about disparity of treatment.

*Why had the Claimant lost?
*Had the ET grappled with the Claimant's argument that he had been treated differently from a woman employee who was not disciplined for either of two incidents of physical violence? No, said the EAT. The Claimant had raised this point in his ET1 and the Respondent had made submissions to the ET about it at the hearing. But the ET's Decision had not explained to the Claimant why he had lost on this point. There were various reasons why he might have lost:

* the ET might have made negative findings of fact on various issues; * the ET's assessment might have been that the incidents happened, but were not sufficiently similar to support a finding of materially disparate treatment; or * despite recording the Respondent's submissions on this issue, the ET might have overlooked the issue when reaching its conclusions.

Employer's knowledge
An essential preliminary to evaluating the disparity issue was reasoned findings of fact on the allegations in the Claimant's ET1. What, if anything did the comparator do? Did any of the Respondent's managers know about the comparator's conduct? What action, if any, did any of the Respondent's managers who knew about the conduct of the comparator take in response to the comparator's conduct? This ET made no such findings. And if the ET had found that the conduct alleged by the Claimant occurred in the other instances and that the Respondent knew about it, the ET would have been required to make a comparison between the conduct of the comparator employee and the Claimant's conduct.

A further potential issue identified by the EAT is what the managers knew about the "culture" of the workplace. Managers' knowledge of the "culture" of a workplace is potentially relevant to an argument about disparity of treatment and consistency of treatment meant that: (i) sanctions should be applied properly, and (ii) the categories of behaviour to which they are applied should be consistent.

The Respondent asserted that if the dismissing manager did not know about the allegedly comparable incidents, the treatment of the other employee was not relevant to the fairness of the Claimant's dismissal. The EAT stated that it was "not intuitively obvious" that an employer could insulate itself from a potential unfair dismissal claim by claiming that the managerial left hand did not know what the managerial right hand was doing. The Court of Appeal's decision in [Orr v Milton Keynes Council ]()[2011] EWCA Civ 62, [2011] ICR 704 was authority for the proposition that the relevant knowledge to be attributed to the employer is that of the person who was deputed to carry out the employer's functions under section 98 of the ERA 1996. Therefore, the EAT was bound by that approach (but see the Comment below).

Although the Claimant was representing himself at the ET, a potentially relevant point had been made which had been acknowledged by the Respondent's submissions to the ET. Therefore, the ET should have considered the disparity point and by failing to do so, the ET had erred in law.

After considering various options, the EAT decided that the fairest way of dealing with the argument and integrating the relevant findings with findings on the rest of the case, was to remit the case to a differently constituted ET for a complete rehearing.

The Court of Appeal's decision in Orr v Milton Keynes Council [2011] EWCA Civ 62, [2011] ICR 704 bound both the EAT and the ET. However, the issue of an employer's state of knowledge may in due course be considered by the Supreme Court which has given permission for an appeal against the decision of the Court of Appeal in [Royal Mail Ltd v Jhuti ]()[2017] EWCA Civ 1632, [2018] ICR 982.*

**Failure to adjourn disciplinary hearing
*Did the failure to postpone an internal disciplinary hearing (to enable the Claimant to be accompanied), make the subsequent dismissal unfair (even though there was no breach of the statutory right to be accompanied)? Yes, said the EAT in [Talon Engineering Ltd v Smith ]()*UKEAT/0236/17/BA – the question was whether the failure to postpone itself made the dismissal unfair.

The Claimant was summarily dismissed for gross misconduct after her employer came to the conclusion that she had sent out unprofessional emails, including content referring to an unnamed colleague as a "knob" and a "knob head".

In considering the Claimant's unfair dismissal claim an ET found that although the Respondent had shown a potentially fair reason for dismissal (i.e. conduct), the decision to dismiss was unfair in that it was procedurally unfair and fatally flawed. This was because of the Respondent's refusal to postpone a disciplinary hearing to enable the Claimant to be represented by her trade union official.

"Interesting argument"
The employer appealed, seeking to attack the ET's finding that it was unreasonable not to postpone the disciplinary hearing. As part of that ground of appeal the EAT had to consider what it described as an "interesting argument". The employer argued that as there had been no breach of section 10(5) of the Employment Relations Act 1999, the dismissal could not have been procedurally unfair: they were entitled by section 10 – so it was argued – not to postpone the meeting as the Claimant's chosen companion was not available to attend a reconvened meeting within five working days.

The EAT disagreed. The Respondent seemed to have thought that given the union representative's inability to attend a reconvened hearing within five working days, they were under no obligation to consider the adjournment of the hearing. If the claim had been for breach of the accompaniment rights under section 10, then there would have been no error in that approach, but the claim was for unfair dismissal. Whilst a breach of the section 10 right at a dismissal meeting "could well, and perhaps almost always will", result in a finding of unfair dismissal, the corollary did not follow. This case was not a claim for breach of section 10, but a claim of unfair dismissal: compliance with other obligations did not necessarily answer whether a dismissal was, or was not, unfair. The provisions of section 10 did not act as a fetter on the ET's discretion or circumscribe the meaning of the words of section 98(4) Employment Rights Act when considering whether a dismissal was fair or unfair.

The ET had directed themselves correctly by reference to the statutory test when considering whether it was reasonable or not to dismiss. It had been entitled to conclude that the Respondent's decision not to postpone the hearing for a short period of time was too impatient and hasty and fell outside the range of reasonable responses, thereby rendering the dismissal unfair.

Mark Shulman is a Consultant Solicitor with Keystone Law and an accredited workplace and employment mediator.

Published: 12/11/2018 10:26

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