Employment Cases Update

Unfair dismissal - Case Round-Up: September 2020

Date published: 28/09/2020

Mark Shulman, Consultant Solicitor with SW19Lawyers, looks at three unfair dismissal cases

In this month's round-up of cases, Mark Shulman, Consultant Solicitor with SW19Lawyers, looks at unfair dismissal cases covering:

 

UNFAIR DISMISSAL

Constructive dismissal

Is a constructive dismissal always unfair? Claims of constructive dismissal can be more complicated. The onus is on a Claimant to establish that they have been dismissed. And even if they have been dismissed, there is still the question as to whether the dismissal was unfair. In Argos Ltd v Kuldo UKEAT/0225/19/BA, the ET did not appear to address this crucial question of fairness.

Background
For restructuring purposes, Argos had a 70:30 rule for "mapping". A role could be mapped to a new role if there was a difference of not more than 30% between the two roles. In a restructuring exercise, the Claimant (K) was put at risk of redundancy. However, Argos sought to "map" K into a newly created role of "Central Costs Manager", contending that this was sufficiently similar to the Claimant's original role and so there was no risk of redundancy.
K considered that the new role was unsuitable because in her view it had lower status, fewer senior responsibilities, as well as a change of job content. She did not believe that it was 70% similar to her existing job. K resigned in protest, claiming constructive unfair dismissal, wrongful dismissal and a redundancy payment.

Repudiatory breaches
The ET found that K had been unfairly constructively dismissed because:

  • Argos had not carried out any individual consultation with K or undertaken a proper analysis of the mapping of roles (i.e. had not assessed the 70:30 mapping rule in relation to K's original and new roles); and
  • the difference between the two roles exceeded 30% and K should not have been mapped into the new role (which was "much diminished in status and responsibilities").

Separate question of fairness
Argos appealed on various grounds, including that the ET had assumed that because there was a constructive dismissal, it must have been unfair. Argos argued that the ET had not made findings about the reason for dismissal, or whether Argos had acted reasonably in all the circumstances.


The EAT confirmed that "As a matter of principle, where there is a constructive dismissal there remains a separate question as to whether that dismissal was unfair".

Had the ET done so? The EAT was not sure as to whether or not the ET had "made the assumption that because this was a constructive dismissal it was by definition unfair by reason of that fact alone". The ET's Reasons moved rapidly from the finding that there was a constructive dismissal to the conclusion that there was an unfair dismissal, without directly addressing the reason for the dismissal or whether it was fair.

The ET had therefore erred in failing directly to address the question of the unfairness of the constructive dismissal and/or failed to give proper reasons for its conclusion that the dismissal was unfair.

Even though the ET failed expressly to address the reason for K's dismissal, there was no point in remitting that question as there was no dispute about the reason (i.e. redundancy). The EAT accordingly found that the ET would inevitably have found that redundancy was the reason for dismissal. But as the question of fairness would be a "highly fact sensitive question", that issue was remitted to the same ET for a decision on that issue.

Time limits
The EAT's judgment in Rathbone & Roche Ltd v Madureira UKEAT/0185/19/RN, is a helpful reminder about the "corresponding date" rule in relation to the unfair dismissal time limit and the extension of time under section 207B of the ERA 1996 (which allows for early conciliation by ACAS prior to ET proceedings being started).

Background
M's ET1 claimed unfair dismissal and stated that her employment had ended on 29 November 2017. R agreed the end date from the ET1 and contended that the time limit for M to present her claim expired on 26 April 2018. As she appeared to have lodged her ET1 on 27 April 2018, R argued that the claim was out of time (subject to any issues of reasonable practicability on whether the claim could have been presented in time).

During a preliminary consideration of jurisdiction, M then asserted that her EDT was not 29 November (as previously stated), but was 30 November. This later date was when she first became aware of her dismissal after receiving a dismissal letter by recorded delivery and an email from R on the same date informing her about the letter. R stated that "If [the EDT] was 30 November 2017 then the Claimant was in time".

After a preliminary hearing, the ET decided that the EDT was 30 November and appears to have assumed (in the light of R's statement of issues) that the claim was brought in time (but the ET did not itself check by undertaking the necessary calculation required by section 207B).


Out of time?
On appeal to the EAT, R argued that, even with an EDT of 30 November, (which was a factual finding by the ET not appealed), the ET1 was still submitted a day late. Although at the sift stage R's appeal was refused permission to proceed, after a review hearing it was allowed to proceed to a full hearing on the basis that arguably:

  • The EDT was 30 November 2017. Applying the corresponding date rule to the three- month period, that time limit would have expired on 28 February 2018.
  • Under section 207B of the ERA 1996, Day A was 26 February 2018. Day B was 26 March 2018. Applying section 207B (3), the extension period of 27 February - 26 March inclusive, was 28 days.
  • Therefore, the extended three-month period would have expired on 28 March 2018.
  • Applying section 207B (4): one month after day B was 26 April 2018. As time would have expired during the period from day A to that date, it instead expired on that date.
  • Therefore, it was arguable that the claim (presented on 27 April 2018), was one day late.

Corresponding date
At the EAT appeal hearing, R relied on Tanveer v East London Bus and Coach Company UKEAT/0022/16/RN for the proposition that, in determining the date of "one month after Day B", the corresponding date rule in Dodds v Walker [1981] 1WLR 1027 (HL) applied.

The EAT agreed and in upholding R's appeal, confirmed that:

"The effect of the corresponding date rule is that a period a month 'from', or, 'after' a particular date ends on the corresponding date in the following month. As Day B in the present case was, it is common ground, 26 March 2018, one month after that date is 26 April 2018. As the claim was received by the Tribunal on 27 April 2018, it was one day out of time".

Time could not be extended to allow M's claim to proceed as the ET had previously determined that it had been reasonably practicable for M to have presented her claim in time.

Striking out
Is it an abuse of process to allow an unfair dismissal claim to proceed when there is no prospect of a financial award or any other remedy? This question arose in Evans v London Borough of Brent UKEAT/0290/19/RN when an ET struck out Dr E's unfair dismissal claim having found that there was no reasonable prospect of him recovering any compensation (either as a basic or compensatory award).

Background
Dr E was a Deputy Head teacher at a school. He was informed about a disciplinary hearing at which more than 800 pages of paperwork were to be considered following an audit investigation. Dr E sought an adjournment of the disciplinary hearing on two grounds: (i) he wanted the same person to accompany him as had been with him during the earlier disciplinary investigation meeting (but she was due to be abroad on the date arranged for the disciplinary hearing); and (ii) Dr E considered that he had not been given sufficient time to master the paperwork.

The request for a postponement was refused and the disciplinary hearing proceeded in Dr E's absence. Dr E was dismissed for alleged misconduct in relation to his receipt of unlawful bonuses and other payments and his participation in payment of allowances relating to another member of staff.

Dr E claimed unfair dismissal. The Respondent local authority (Brent) defended the claim on the basis that Dr E was guilty of gross misconduct and there was a fair dismissal. Alternatively, if there had been any unfairness, there should be a 100% reduction under Polkey and/or by reason of Dr E's contributory conduct.

Other proceedings
Pending other proceedings, the ET claim was stayed. First, there were criminal proceedings against Dr E and others. These were concluded against Dr E with no evidence being offered against him.
Brent then issued proceedings against Dr E (and others) in the High Court. The judgment included a finding that Dr E had received over £250,000 in overpayments (although the majority of Brent's claims relating to this sum were time-barred). The judgment also answered the Polkey point - it was inevitable that a fair procedure would have resulted in Dr E's dismissal.

The ET stay was lifted and the matter was set down for a Preliminary Hearing to decide whether:

(i) Dr E's unfair dismissal claim should be struck out under Rule 37 of the ET Rules); or


(ii) Deposit Orders should be made pursuant to Rule 39.

No prospect of compensation
It was accepted that the High Court judgment was binding on the ET. The ET decided that on the substantive aspects of Dr E's unfair dismissal claim, there could be no reasonable prospect of Dr E succeeding in a claim of unfair dismissal. Even if he succeeded in showing unfairness on procedural grounds, the ET could not see any prospect of a financial remedy – it saw little prospect of contribution reductions of less than 100% for both basic and compensatory awards.

In striking out Dr E's claim, the EJ commented that he could "see no interests of justice in devoting further substantial judicial resource, or the public funds of Brent, to litigate these events any further". The ET went on to make clear that, had it not struck out the Claimant's claim, it would have made Deposit Orders.

Dr E appealed to the EAT in relation to the striking out of his entire claim.

Finding valuable in its own right
Even though the ET had decided there was no reasonable prospect of Dr E receiving any financial award (a point which was not appealed), was the ET right to have struck out the whole of Dr E's claim?

R contended that a claimant has no absolute right to pursue their claims as "A litigant has a right to have his case litigated provided it is not frivolous, vexatious or an abuse of the process. What may constitute such conduct must depend on all the circumstances of the case" (see Ashmore v British Coal Corporation [1990] IRLR 283).

The EAT reviewed various case authorities including Telephone Information Services Ltd v Wilkinson [1991] IRLR 148, where the EAT had held that:

"In our judgement, the respondent has a right … to have his claim decided by the Industrial Tribunal. His claim is not simply for a monetary award; it is a claim that he was unfairly dismissed. He is entitled to have a finding on that matter, and to maintain his claim to the Tribunal for that purpose."

The EAT also made reference to Gibb v Maidstone & Tunbridge NHS Trust [2010] EWCA Civ 678 where the reasoning in Wilkinson was citied with approval by the Court of Appeal.

On the same day when the Court's reserved judgment in Gibb was handed down, the EAT in Scotland gave judgment in Nicolson Highlandwear v Nicolson [2010] IRLR 859. In that case, Lady Smith held that:

"…the Employment Judge was wrong to approach matters on the basis that it is open to a claimant to pursue an unfair dismissal claim purely for the purpose of obtaining a declaration that he was unfairly dismissed…"

It is important to note that in Nicolson, the EAT was not referred to the earlier Telephone Information Services case. Nevertheless, part of the ET's reasoning for striking out Dr E's claim had been that "following the reasoning of Nicolson", Dr E had no reasonable prospect of success.

The EAT pointed out that the ET had not ruled out the prospect of Dr E establishing unfair dismissal on procedural grounds (despite there being no prospect whatsoever that he would receive any monetary award). As counsel for Brent had acknowledged at the EAT hearing, a mere finding of unfair dismissal could have value (as recognised in the Telephone Information Services and Gibb cases).

Was there an abuse of process?
Although the ET had taken a "wrong turn" in following the judgment of Nicolson, it was still necessary to look at how the ET had exercised its discretion and whether allowing Dr E's claim to proceed would amount to an abuse of process.

The EJ had failed to recognise that whilst the High Court decision effectively answered the substantive issues raised by Dr E's unfair dismissal claim (i.e. the reason for dismissal, whether there were reasonable grounds for the Brent's belief and whether there had been a fair investigation), there was still the remaining issue of procedural fairness (relating to the failure to adjourn the disciplinary hearing). The High Court had not been concerned with the question of procedural fairness and absent something more (e.g. an express finding of bad faith), it would not be an abuse of process for Dr E to pursue a claim of unfair dismissal purely on grounds of procedural unfairness. To that extent Dr E's appeal was allowed and the strike out set aside in relation to the part of the claim relating to procedural unfairness. But that did not affect the ET's strike out decision on the aspects of Dr E's claim relating to the substantive fairness of his dismissal.

Mark Shulman is a Consultant Solicitor with SW19Lawyers and an accredited workplace and employment mediator.