In this article...

• The background
• Compensation uplifts
• Right of appeal
• What does it mean for me?

Two recent decisions of the EAT have shed light on the factors that tribunals should take into account when assessing the amount of the uplift for an employer’s failure to follow the statutory dismissal procedures. There has also been some guidance on the requirements for notifying an employee of his or her right of appeal. Jodie Sinclair reports.

The background

Since 1 October 2004, employers have been obliged to comply with the statutory dismissal and disciplinary procedures (DDPs). The standard DDP, which applies when an employer wishes to dismiss an employee or take action against him or her on grounds of conduct or capability, consists of three steps:

		Step 1 – a written statement of grounds for action and an invitation to a meeting.
		Step 2 – a meeting, after which the employer must inform the employee of its decision and notify him or her of the right of appeal.
		Step 3 – if necessary, an appeal.

In most cases it will be automatically unfair for an employer to dismiss without completing the statutory procedure. In this situation, an employment tribunal must increase any award of compensation by 10 per cent (unless there are exceptional circumstances) and may increase the award by up to 50 per cent if this is just and equitable.

Compensation uplifts

Two recent decisions of the Employment Appeal Tribunal (EAT) have addressed the factors that tribunals should take into account when assessing the amount of the uplift for an employer’s failure to follow the statutory DDPs.

In Aptuit (Edinburgh) Ltd v Kennedy the employer decided to make a number of redundancies. In November 2004 Mrs Kennedy was told that her job was at risk. She subsequently received a letter confirming that fact and a meeting took place.

The next day, the employer wrote to Mrs Kennedy stating that she would be made redundant. There was no mention of a right of appeal, although Mrs Kennedy did subsequently attend a meeting with a representative from the company’s HR department.

An employment tribunal found that Mrs Kennedy’s dismissal was automatically unfair because her employer had not offered her an appeal as required by the standard DDP. It applied a 40 per cent uplift to her compensation on the basis that the employer was a large organisation; there appeared to have been no consultation whatsoever; and Mrs Kennedy was a long-standing employee who had been treated in a shoddy manner.

The tribunal also found that the dismissal would have been unfair in any event, quite apart from the failure to follow the DDPs, because of the lack of consultation, the perfunctory nature of the meetings that had taken place, the absence of a right of appeal and the manner in which the employer had approached the question of alternative employment.

On appeal, the EAT held that the tribunal had failed to recognise that an uplift of more than 10 per cent is purely discretionary, based on a consideration of what is just and equitable in the circumstances. Furthermore, the tribunal had taken into account irrelevant circumstances in reaching its decision on compensation.

The factors identified by the tribunal – including the size of the organisation and the “shoddy” manner in which Mrs Kennedy had been treated – should not have influenced the uplift since they did not relate to the failure to complete the statutory DDPs.

In another recent case, CEX Ltd v Lewis, an employment tribunal found that an employee had been automatically unfairly dismissed by reason of the employer’s failure to follow the statutory DDPs and uplifted his compensation by 10 per cent. The employer appealed against the award and the employee cross-appealed, arguing that the tribunal should have applied a higher uplift.

The EAT rejected the cross-appeal. It declined to give general guidance but did comment that the tribunal, in limiting the uplift to 10 per cent, had been entitled to take account of the fact that the employer’s failure to comply with the statutory DDPs resulted from ignorance rather than deliberate disregard.

Right of appeal

A separate issue that arose in the case of Aptuit (Edinburgh) Ltd v Kennedy was whether the employer had breached the statutory DDPs by failing to set out in writing the employee’s right of appeal.

The EAT held that it had not. It took the view that the statutory DDPs do not require the right of appeal to be communicated in writing and that the tribunal had erred in holding that the employer must “offer” the employee an appeal.

The DDPs merely require the employer to communicate the existence of such a right, whether verbally or in writing. It is then for the employee to inform the employer that he or she wishes to exercise that right.

What does it mean for me?

		A recent decision of the EAT suggests that employment tribunals, in assessing the amount of the uplift for an employer’s failure to follow the statutory DDPs, should only take into account matters that relate to that failure. Thus, factors such as the size and resources of the employer and the manner in which the dismissal was handled are irrelevant. While this is good news for employers, the decision is open to question since there is nothing in the statutory wording to limit the “just and equitable” test in this way.
		Another recent EAT case suggests that, while each case will turn on its facts, an employer’s ignorance of the statutory DDPs may support a tribunal’s decision to limit the amount of the uplift. Again, this is a questionable decision since an employer’s failure to inform itself of the law might be thought to support a higher uplift.
		In the interests of clarity, an employer will normally wish to notify an employee of his or her right of appeal in the dismissal letter itself. However, an employer who omits to do this, and who gives verbal notification instead, does not thereby breach the statutory DDPs.