The various tests to conduct to check the

The
following report will outline in detail the differences between the wrongful
and unfair dismissal. In the UK alone, every year, thousands of dismissal claim
are made every year. Case studies will be utilised to demonstrate how current
regulations and legislations can be implemented in real life scenarios.  In addition to this, detail explanations will
be provided about various remedies available to the employee depending on the
type of dismissal. Lastly, a step-by-step procedure will be outlined such that
employee can make a claim against unlawful actions. 

 

Contents
Abstract. 1
1.      Introduction. 2
1.1
Employment Law.. 2
1.2
Historical Development. 2
1.3
Introduction to dismissal 2
2.     Type of Employment Status. 3
3.1     Wrongful dismissal 4
3.2     Remedies
for wrongful dismissal 4
4.1     Unfair dismissal 5
4.2     Remedies
for unfair dismissal 8
5.      Conclusion. 9
6.      Cases. 9
7.      Acts. 9
8.    References. 10
 

 

List of figures

Figure
1: showing the various way a contract can be ended.

Figure 2: showing
the various tests to conduct to check the status of an individual

 

List of tables

Table 1: showing
reasons for automatic unfair dismissal

Table 2: showing
reasons for potential unfair dismissal

Table 3: showing
reasons for automatic unfair dismissal

Table 4: showing
the basic award calculation based on age

Table 5: showing
factors that attributes to the compensatory award

 

 

Title of the essay

Define what is meant by ‘wrongful dismissal’ and by
‘unfair dismissal’ and explain what the routes for seeking remedies are and
what remedies are available

 

1.      Introduction

1.1 Employment Law  

Employment
law is a branch of the law that regulates affairs among the employer, employee
and trade unions. It ensures that matter such as employment contracts, minimum
wages, working hours, sick pay, holiday pay, redundancy, discrimination,
disability, parental leave and any disciplinary processes are not unlawfully
exploited. 1 This law facilitates the cooperation of three
fundamental relationships: 
employee-employer, employer-trade union and trade-union member. 2

In the past, employment law used to protect the employers
from the employees, but in the modern society it is primarily operated to
protect the employee from discrimination, health, and safety and to prevent
work disruption for unfair reasons. When issues arise between the two parties,
then an independent judicial body, the Employment tribunal, analysis the
situation and provide remedies to the damages occurred to the employee. 3

 

1.2 Historical Development

The very first law protecting the
worker from the unfair dismissal was introduced in the UK about 40 years ago
(1963).4 In particular, the Blue metal v Hughes case proposed the
first feasible notice period required to terminate an employment contract.  Such case led to the formation of three
legislations that protects the worker from unlawful dismissal. The three acts
are labelled as follows:

–         
Contract of Employment (1963)

–         
Redundancy Payment Act (1965)

–         
Industrial relations act (1971)

The contract of employment (1963)
was the first legislation that was produced from the Hughes case.  This act state
the minimum period of notice required between the employer and the employee
before an employee can be dismissed. The second act, the Redundancy Payment
Act, allowed the worker to receive a
compensation network in case of job loss. The third act, mainly the
Industrial relations act (1971), protects the worker from unfair
dismissal.  This act is particularly
important, as for the first time, it allowed the worker to appeal to the
tribunal. 5

 

1.3 Introduction to dismissal

Dismissal
can be defined as the termination of the contract, performed by the employer
against the employee, with or without providing valid justification. 6 This might lead to loss and
damages to the employee. In fact, employment law requires the employer to
follow a certain standard and procedure before terminating the employment
contract, such that least amount of damage is affected to the employee. There
are various ways to terminate a contract as shown in the image in Figure 1 underneath.

Figure
1: showing the various way a contract
can be ended (Employee Rescue, 2018) 7

 

2.Type of Employment Status

Employment
law can be ruled, only when an individual is actually an employee of a company.
It is required to identify and define whether an employee is a worker, a self
–employer or a sub-contractor. According to The ERA 1996, S.230 (1), the
employee is defined as following “an
individual who has started work or worked under a contract of employment”. 8 In order to make any claim for
wrongful or unfair dismissal, the worker must be a fully qualified employee.

Apart
from this, there are other benefits that employee can claim, such as protection
right, sick pay, holiday pay and many more. To determine the status of the
employer several tests can be conducted. These tests are: integration test,
control test, economic reality test, mutuality test and multiple test as shown
in Figure 2.

Figure 2: showing
the various tests to conduct to check the status of an individual 9

Depending on circumstances, the type of job and the
nature of the work these tests can be implemented to assess the nature of the
employment. In some cases, multiple test needs to be carried out, which
consists running all the test mentioned above together.

 

3.1 Wrongful dismissal

Wrongful dismissal is a type of dismissal that occurs
when the contract is breached. In order for a dismissal to be wrongful, the
following conditions need to be met:

1-     
No
prior or sufficient notice has been provided by the employer to terminate the
contract

2-     
The employer has not provided a valid reason for
termination of the contract 

The length of the notice period depends on the contract
and on the nature of the job. This can be agreed between the employer and
employee when signing the contract. However, if this is not explicitly stated,
then the common law states to “imply a
minimal period of reasonable notice, which is reliant on the circumstances of
the employment in question”.10However,
recently the common law has changed the regulation regarding the minimum period
of notice.

The current legislation states that if the length of the
employment is between one week and to two years, then the notice period should
be one week. If the length of the employment is more than 12 years, then the
notice period should be 12 weeks. Hence, it is possible to state that for every
year of employment there is a week of the notice period is added. In addition
to this, it is worth mentioning that the notice period also depends on the
level of the employee. In fact, a senior employee can demand more prolonged
period of notice. 11

When this occurs, the employee can take the case to the
Employment Tribunal. The employment law facilitates the assessment in Tribunal
by analysing the employment contract and current legislation. Hence, it
required to assess whether such contract was breached.

However, in some cases, the employer can dismiss the
employee without any prior notice, such condition is known as Summary
Dismissal. This occurs when the employee commits gross misconduct such as
theft, criminal act, and acts that are against the conventional norm. 12

A worth mentioning case, is the case Hanley v Pease (1915) where the employee was dismissed for being
absent from work without authorisation from the Employer. Since no clear
agreement was made in the contract regarding the suspension, the employee
managed to obtain the salary for the day. In this case, the employer could have
simply dismissed for the reason mentioned above, but an unpaid day, helped the
employee to win the case. 13

 

3.2 Remedies for wrongful dismissal

The employee can claim damages for
wrongful dismissal. However, no damage claim can be claimed if the employee was
dismissed for gross misconduct or gross negligence.

Damages caused by the wrongful
dismissal are usually calculated based on the pay rate of the employee. There are
two types of damages can be demanded: lost in salary (working days that
employee can claim if the dismissal did not occur in the first place) and lost
in work day due to “notice to quit” (loss in working days due inappropriate
notice period). 14

To make these claims, cases needs
to be taken to the tribunal. Generally,
a tribunal consists of three core individual: the employment judge, the
employer expert, and a worker form the union. 15 Before proposing to the tribunal, the employee must contact
the Advisory Conciliation and Arbitration Service (ACAS). This is the first
stage where the employee and the employer can come to an agreement without the
intervention of the court.

The employment tribunal can make
only claims that are no more than £25,000. For any amount above this threshold,
claims need to be approved by the High Court. 16

There are some advantages to take
the case to the High Court. Firstly, an employee can have up to 6 years to make
a claim. Secondly, High Court civil procedure is utilised to maintain the
claim. This means that the losing party will have to pay the legal fees for the
winning individual. 17

Analysing the Smith
V Trafford Housing Trust case, it is possible to observe that such
damages can be low. In this case, a housing trust humiliated a manager for
making comments about opposing gay marriages in church on his Facebook page. For
this reason, the worker claimed for damages for wrongful dismissal by utilising
the case of Hogg v Dover College. 18 This case is particularly
important as the employer agreed to a new contract after a demotion. Hence, the
damage paid in this case was the difference between the contractual salary and
the new role, which was £98.

Another worth mentioning
case is the Malik v Bank of Credit and Commerce
International (BCCI),
where the employee was working for a fraudulent bank and it was eventually shut
down. After closure, the worker had difficulty to find an alternate job in the
same industry due to the previous reputation. For this reason, a case was made
against the employer due to economic loss caused by the wrong reputation. 19

 

Injunction: an alternative to damage

An alternative remedy for
damages is injunction. Injunction can be defined as an order from the court
that persuades or forces the employer to continue with the contract.
Injunctions are approved or requested by the court in rare cases when it is
difficult to establish a feasible solution to the case. If the circumstances
allow, the Court needs to grant an injunction as a remedy for the wrongful
dismissal. An injunction, in order to be effect, must follow the following
conditions:

–         
Damages would not be an alternative remedy (e.g.
employee working in health sector)

–         
There must be reciprocal trust between the
worked and employee such that employment relationship is not weaken beyond
repair.

–         
Employee must claim protection for statutory
rights. 20

A worth mentioning case of
an injunction is the Hill v CA Parson & Co Ltd, where the employee, Mr Hill, after providing 30 years
of service decided to join a trade union not recommended by the company. For
this reason, the worker was dismissed with a one-month notice. Consequently, Mr
Hill claimed for the injunction. The Court awarded him six months’ notice
before ending the contract. In this case, providing financial compensation
would have been inappropriate since there is still mutual trust and confidence
between the employer and the employee. 21

 

4.1 Unfair dismissal

Unfair dismissal can be defined as a statutory right;
hence it occurs when there is a breach of the statues. Unlike the wrongful dismissal,
the fairness of the dismissal is judged based on the reason provided by the employer.
This concept was first introduced in the Industrial Relations Act 1971 and is
now endorsed by section 94 of the
Employment Rights Act 1996.

Certain jobs, such as share fishermen, police service and
people who are employed outside the Great Britain like the armed forces and
Crown employee cannot claim for the unfair dismissal. In addition, those in an
illegal employment contract cannot make any claim. 22

In order to make claim for unfair
dismissal, there are key three requirements that needs to be follow.  Those requirements include being in contract
during the dismissal, be employed for at least one year and claim the dismissal
within three months from the dismissal date. 23

A dismissal can be refereed as fair when the employer
dismisses the employee under the regulations provided by the Employment Rights
Act 1996. Those conditions include:

–         
The employee fails to complete the job to the
desired standard. This also implies not be able adapt to new changes and
integrating with co-workers.

–         
Persistent long term illness that affects work
performance

–         
Statutory restriction

Hence, if the employee gets
dismissed for any of the reasons mentioned above, then unfair dismissal cannot
be claimed.

A compelling case is the Martin v Yeoman Aggregates LTD: EAT 1983, where the argument between the
employer and employee led to the dismissal of the employee. However, after a
short period of time, the employer withdrew the dismissal when he was
thoughtful and less angry. In this case, it is important to observe that the
dismissal was mentioned in a “moment of heat”, hence, it was ineffective. 24

In contrast, discrimination or
dismissal based on the age of the employee, for instance, is certainly
unlawful. Age related discrimination is regulated by the Employment Equality (Age) Regulations
1. This
regulation states the employee dismissed at the age below 64 can be claimed as
unlawful. However, depending on the job circumstances, it can be fair to
dismissed at a different age. A good example of this, is the Payne v Royal and Sun Alliance Group plc case
where the employer provided a valid reason to the employee to retire on time.
In fact, Mr Payne’s could retire at age 62 instead of 65 without any permission
from the employer.

Hence, the worker claimed
both for unfair and wrongful dismissal. This is due to the breach of contract
as well as breach of the statue. Since there is no legislation that allows
early retirement, the Employment tribunal agreed to keep the contract open.

According to the Employment
Rights Act 1996, the reasoning behind the unfair dismissal can be classified
into three categories:

–         
Automatically fair reasons

–         
Automatically unfair reasons

–         
Potential fair reasons

 

Automatically fair reasons occur when the employee takes
unofficial industrial action and hence threats the national security. In this
case, it is reasonable to dismiss the worker. Thus, unfair dismissal cannot be
claimed.

In contrast, automatically unfair reasons include a list
of situation where the dismissal is unlawful, such as:

Automatic unfair
dismissal 

·        
Pregnancy related issues
 

·        
Health and Safety issues (e.g.
unable to work due to the safety of the environment)
 

·        
Spent conviction
 

·        
Trade union issues
 

·        
Fixed-time employees’ or
part-time employees’ regulations contravention
 

·        
Asserting a statutory right

 

Table 1: showing
reasons for automatic unfair dismissal 25

For the reasons mentioned above, it is not required for
the employee to have one year of service, hence it can be taken into court for
the claim.

The potential fair dismissal, instead is based on how the
employer handled the dismissal. Examples of potential fair dismissal might fall
in the following group:

potential unfair
dismissal

·        
Capability or qualifications
 

·        
Conduct
 

·        
Redundancy
 

·        
Statutory bar
 

·        
Some other substantial reason
 

 

Table 2: showing
reasons for potential unfair dismissal 26

The first in the list refers to the capability and
qualification of the employee to perform the task at the desired standard.
Statutory bar applies when the employee has no right to due to the expired work
permit. Lastly, misconduct relates to the breach of the contract due to the
break of the rules imposed by the employer.

A worth mentioning case is the The British Waterways Board (T/A Scottish Canals) V Smith. In this
case the employee, Mr Smith was dismissed for publishing negative comments on
Facebook about his work and his manager. In addition, he published pictures of
himself consuming alcohol in the work environment. The case was eventually
taken to court and at the end Mr smith was dismissed due to the act of
misconduct. This case demonstrates that action can be taken later for misconduct
and it Is important to keep a social media policy. ref Other possible reasons
for potential fair dismissal includes:

1-     
Refusal
to an agreement to amend the terms and conditions when considered mandatory by
the manager

2-     
Employee
unable to be employed at the termination of the fixed term contract

3-     
An
individual external forces for the dismissal of the employee (. e.g. customer)

 

4.2 Remedies for unfair dismissal

As a remedy for unfair dismissal, the following can be
granted by the court:

Remedies for
unfair dismissal  

·        
Compensation
 

·        
reinstatement
 

·        
Re-engagement
 

·        
decleration
 

Table 3: showing the remedies available for unfair dismissal 27

Compensation occurs when a monetary payment is provided
to the employee for the unfair dismissal. Reinstatements refers to the
re-allocation of the employee to the previous job such that the employee was
never dismissed. Re-engagement, similar to reinstatements, offers the employee
its previous job, but with different role or conditions. Compensation is
calculated mainly in two ways: basic award and the compensatory award.

Basic award is calculated as follows:

Basic award calculation  

·        
If over age 41, entitled to
have 1.5 week’s pay for every year of the service completed
 

·        
If age between 22 and 41,
entitled to have 1 week’s pay for every year of the service completed
 

·        
If age between 18 and 22,
entitled to have 0.5 week’s pay for every year of the service completed 7
 

 

Table 4: showing
the basic award calculation based on age 28

 

There is a limitation in this which consists in receiving
a maximum of £280 a week for 20 years of work. 
This implies that the maximum compensation granted for unfair dismissal
is £8,400. Nevertheless, the number has now changed to £489 weekly if the weekly
gross exceeds £489. This will only apply if the dismissal was caused after 6th
April 20174.

The compensatory award, in contrast, is not fixed and is
based from case to case. ref. In this compensation financial compensation of
up $80, 541 (for dismissal after 6th April 2017) is provided due to
the loss caused by the dismissal. Calculations are made based on the following
elements

compensatory award

·        
Loss of earning (i.e. due to
the dismissal)
 

·        
Loss of future earning (i.e.
losses after the hearing)
 

·        
Any expenses (i.e. to find
alternative jobs)
 

·        
Loss of statutory rights
(e.g.  unable to claim  sick pay)
 

·        
Loss of pension rights
 

Table 5: showing
factors that attributes to the compensatory award 29

 

This compensation, however, might be reduced if the
employee contributed to the dismissal, failed to source alternative jobs or
claimed benefits after the dismissal. 30

 

5.     
Conclusion

Overall,
any employee after an unlawful termination of the contract has the right to
claim for either wrongful or unfair dismissal. It is critical to know the
differences between the two before making any claim. Based on the damage,
different remedies are available. For wrongful dismissal damages and injunction
are the possible remedies while for unfair dismissal, compensation reinstatement,
re-engagement or a declaration might be award to the employee. Decision are
made from case to case, on the nature of the job and by stipulating the true
intention of the employer and employee

1 Employment Equality (Age) Regulations
2006 (SI 2006/1031)

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