Autumn 2021 Employment Law update: Part 3 - Focus on unfair dismissal

10 minute read
18 October 2021


Here, Gowling WLG's Employment, Labour & Equalities team brings you a quick round-up of the recent need-to-know employment law developments. In Part 1, we looked at COVID-19 related developments and in Part 2, family-friendly and equalities issues. Here in Part 3, we look at issues relating to unfair dismissal claims:

  1. Lack of an internal appeal does not automatically make a dismissal unfair
  2. Automatic unfair dismissal for asserting a statutory right
  3. Dismissal for criticising a colleague in relation to a protected disclosure not automatically unfair

In our final Part 4, we consider the latest developments concerning issues arising in relation to trade unions, enhanced redundancy terms, employment status and the National Minimum Wage.

1. Lack of an internal appeal does not automatically make a dismissal unfair

Generally, an employee who has two years' qualifying service has the right not to be unfairly dismissed. To establish that a dismissal was fair, the employer must not only have a fair reason for dismissal but also act reasonably in treating that reason as sufficient to justify dismissal. In order to act reasonably, an employer must follow a fair procedure when dismissing an employee. In most cases, allowing the employee a right to appeal a decision to dismiss will be required as part of establishing that a fair internal procedure has been followed. Indeed, the relevant ACAS Code of Practice requires that an employee be advised in writing of the right of appeal when the employer's decision is communicated. But does failing to allow a right to appeal inevitably mean the procedure followed is unfair? Two recent cases illustrate that a lack of an opportunity to appeal a decision to dismiss does not automatically result in an unfair dismissal, although employers should consider their overall process very carefully before deciding to risk not offering an appeal.

In Moore v Phoenix Product Development, the Employment Appeal Tribunal ("EAT") confirmed that procedural fairness does not always require the employer to offer an internal appeal against dismissal. Under the Employment Rights Act 1996, whether a dismissal is fair or unfair depends on whether, "in the circumstances", including the size and administrative resources of the employer's undertaking, the employer acts reasonably or unreasonably in treating the reason for dismissal as a sufficient reason for dismissing the employee. Although an appeal will normally be part of a fair procedure, that will not invariably be so. In this case the circumstances included:

  • the employee held a senior position and was a board-level director;
  • the employee himself had brought about an 'irreparable breakdown' in trust and confidence considered to be 'destructive', destabilising and a 'drag-factor' for the company;
  • the employee was unrepentant about his conduct and attitude; and
  • the employee had not shown any sign that he was likely to change.

Fairness will usually require that an employee is given the right to appeal internally, with any such appeal being heard, if possible, by a manager who was not involved at the dismissal stage. It will rarely be the case that procedural fairness will be made out where this doesn't happen. However, this case is an example of such a rare situation when it is quite clear that nothing further can be done to improve the relationship and so an appeal would be futile.

In Gwynedd Council v Barratt and anor, the Court of Appeal also confirmed that in a redundancy situation, the absence of an opportunity to appeal does not "of itself" make a redundancy dismissal unfair; absence of an appeal is one of many factors to be considered in determining fairness. If the original selection for redundancy was in accordance with a fair procedure, the absence of an appeal is not necessarily fatal to the employer's defence. As ever the touchstone is the reasonable responses test with the absence of an appeal one of the many factors to be considered in determining fairness. On the facts of this case, the dismissals for reason of redundancy were held to be unfair due to a number of factors, not simply because there was no right to appeal.

2. Automatically unfair dismissal for asserting a statutory right

If an employee can establish that the reason, or principal reason, for their dismissal was asserting a statutory right, their dismissal will be deemed to be 'automatically unfair', according to section 104 ERA 1996. In addition, the two year service requirement to bring an unfair dismissal claim will be disapplied.

It is settled law that to succeed in a complaint of automatically unfair dismissal for asserting a statutory right, there must have been an infringement of a statutory right, not merely an anticipation or threat of future infringement.

In Simoes v De Sede UK Ltd, an employee with one month's service was instructed to cover her manager's holiday absence. She complained that this would result in her working 14 consecutive days in breach of regulation 11 Working Time Regulations 1998 (WTR). The employer refused to provide any temporary cover and despite her complaints, she worked the hours in question as instructed. Two days after her manager returned from holiday, she was dismissed.

The tribunal found the main reason for her dismissal was her complaint in relation to her working hours. Nevertheless, the tribunal dismissed her claim for automatic unfair dismissal on the basis that, at the time of her complaint, the breach of the EAT had not yet occurred (she had not yet worked the extra days). On appeal, the WTR held she had been automatically unfairly dismissed. The matter crystallised when she was instructed to work in breach of the WTR. It was the instruction that breached her working time rights. It was not necessary for the relevant shift or work pattern to have been completed for the alleged infringement to have occurred.

A useful reminder of the importance of being aware of, and complying with employees' statutory rights, and clarification that a request in breach of statutory rights can be the trigger for an automatically unfair dismissal.

3. Dismissal for criticising a colleague in relation to a protected disclosure not automatically unfair

If an employee raises an issue with their employer that discloses any legal wrongdoing, this may amount to a protected public interest disclosure. The employee will gain protection as a whistle-blower, which will mean that if they are dismissed as a consequence it will be regarded as automatically unfair and have a significant impact on the potential compensation that can be awarded, as the cap that applies in relation to ordinary unfair dismissal claims will not apply.

In Kong v Gulf International Bank Ltd, the EAT has upheld a tribunal decision that an employee who was dismissed for questioning a colleague's professional competence in relation to the subject matter of a protected disclosure was not automatically unfairly dismissed. The manner in which the employee criticised her colleague was properly separable from the protected disclosure as the reason for dismissal.

In this case, Ms Kong (Head of Audit) produced a report and spoke to her colleagues, including Ms Harding (Head of Legal), about her concerns around how suitable new financial products were. (It was agreed that these concerns were 'protected disclosures' for the purpose of whistleblowing legislation.) This led to a confrontation between Ms Kong and Ms Harding, during which Ms Kong questioned Ms Harding's legal awareness of the relevant issues. Their working relationship soured, and Ms Harding complained to senior leadership that Ms Kong had questioned her professional integrity. The Head of HR and CEO, who were aware of other incidents involving Ms Kong's interaction with colleagues, then dismissed her due to her behaviour and manner towards colleagues.

The tribunal held that while the protected disclosures were a material part of Ms Harding's complaint, those who took the decision to dismiss were not motivated by the protected disclosures. While Ms Kong succeeded in her ordinary unfair dismissal claim due to procedural failures, her claim for automatic unfair dismissal for having made a protected disclosure failed, significantly impacting the compensation she was claiming. In an ordinary unfair dismissal case, the award is subject to the caps on basic award (currently £16,320) plus compensatory award (currently £89,493), whereas whistleblowing automatic unfair dismissal compensation is uncapped (she was seeking £2.6 million in her Schedule of Loss).

This judgment is an example of where the reason for dismissal was separable from the disclosure. Although the subject of the protected disclosure was connected to the criticism of the Head of Legal, the two issues could be properly distinguished as the criticism was not a necessary part of the disclosure. The management decision to dismiss had been taken because they viewed the personal attack on a colleague as unacceptable rather than the disclosure itself.

If you have any questions relating to unfair dismissals, or about employment law in general, please contact Connie Cliff.

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