In this article...

• Time limits
• Procedural fairness
• Calculating compensation
• Employment Bill – stop press

Sarah Lamont looks at three recent cases which clarify the approach the employment tribunals are taking towards claims of unfair dismissal.

Time limits

Royal Bank of Scotland v Bevan

Unfair dismissal claims must normally be submitted no later than 3 months after an employee’s last day of employment. This can be extended to 6 months, if an employee reasonably believes that a statutory disciplinary or dismissal procedure (“DDP”) is in progress. Claims lodged outside the time limits normally will be struck out, unless a claimant can show that it was not ‘reasonably practicable’ for them to have lodged their claim within time.

The Bevan case considered the application of the test of ‘reasonable practicability’ and the 3-6 month time limit, in slightly unusual circumstances.

Mr Bevan had appealed against his 12 January 2007 dismissal but by April 2007 no decision had been made. He therefore assumed that the dismissal procedure was ongoing; that he would be able to rely on the 6 month time limit; and that he did not need to lodge his claim within 3 months. Mr Bevan received a letter from the Royal Bank of Scotland confirming his dismissal and bringing the dismissal procedure to a close, at 7pm on 11 April 2007, hours before the 3 month time limit expired. He notified his solicitors the next day, by which time the 3 month time limit had passed, as had his opportunity to rely on the extended time limit. His solicitors lodged his claim seven days later, but would the tribunal accept that it had not been reasonably practicable for Mr Bevan to have lodged his claim within 3 months?

The Employment Appeal Tribunal (“the EAT”) sympathised with Mr Bevan’s predicament and held that it had not been reasonably practicable for him to have lodged his claim within 3 months. Although Mr Bevan had been advised by solicitors, and had taken a further seven days after the expiry of the original time limit to lodge his claim, the EAT felt that finding against him would have been contrary to the spirit of the statutory dispute resolution procedures.

Key point

If a DDP is being followed and that procedure is concluded very close to the expiry of the time limit for lodging a claim, a tribunal may allow an extension of time

Procedural fairness

Venniri v Autodex Limited
In this case, the EAT provided guidance on how tribunals should approach their assessment of the procedural fairness of a dismissal.

Section 98(A)(1) of the Employment Rights Act 1996 provides that employers must follow the DDPs (defined above) in order for a dismissal to be fair. If the relevant procedure is not followed, then the dismissal will be automatically unfair.

When Mr Venniri brought his claim to the Employment Tribunal, he failed to make reference to any procedural unfairness in relation to his dismissal and the Tribunal found that his dismissal had been fair. He appealed, including on the basis that the Tribunal had failed to make any finding as to whether the DDPs had been followed. The question for the EAT was whether a tribunal is under an obligation to consider whether a DDP has been followed, or whether a claimant needs to specifically bring this matter to a tribunal’s attention.

The EAT upheld his appeal, saying that, whenever tribunals consider whether a dismissal is fair, they must consider the issues raised by section 98(A)(1) and, in particular:

		whether there is an applicable procedure;
		whether that procedure has not been completed;
		whether any such failure is wholly or mainly the fault of the employer.

Key point

Unless non-compliance with the DDPs is conceded by the employer, tribunals are now required to consider this, regardless of whether or not the employee has raised it themselves. This exception to usual practice is reflective of the EAT’s view that section 98A(1) is part of the “essential fabric of unfair dismissal law” and must, therefore, always be considered.

Calculating compensation

Ros and Angel (t/a Cherry Tree Day Nursery) v Fanstone

Here the EAT adopted a robust approach towards the calculation of compensation, where an employee was dismissed 10 minutes before her employment would have terminated as a result of her resignation.

On a finding of unfair dismissal, a tribunal will usually make an award of compensation based on what it considers to be just and equitable in all the circumstances of the case. This is usually based the employee’s loss of earnings, caused as a result of the unfair dismissal. However, in certain circumstances, compensation can be “capped”; for example, if a dismissal would have occurred in due course or the employee was likely to have been dismissed on another ground.

Miss Fanstone was employed by Cherry Trees Day Nursery, but had handed in her resignation and her notice was due to expire on 15 May 2006. At 4.50pm on 15 May, the nursery summarily dismissed her and refused to provide her with a clean reference. A tribunal found that her dismissal was unfair and awarded her £4000 for loss of earnings. The nursery appealed the amount of the award. The EAT upheld the nursery’s appeal and decided that, as Miss Fanstone’s notice period was due to expire 10 minutes after she was dismissed, her losses stopped at that point.

Key points

		This case represents an extension of the circumstances in which claimants’ compensation may be capped.
		Compensation may be payable where an employee suffers a loss because of a change in the nature of the termination of their employment. For example, if a job offer was withdrawn because an employee was dismissed during their notice period.
		The EAT noted that, at worst, the nursery may have contributed to Miss Fanstone’s losses by failing to provide her with a reference, but there could be no compensation because there is no requirement for employers to provide references. If the facts had been slightly different in this case, and the nursery had given Miss Fanstone an unfair reference, then she may have been able to claim compensation in negligence. This case is, therefore, a useful reminder for employers to be wary of the risk of a claim for providing a negligent reference, particularly as there is no legal obligation on employers to provide a reference at all.

Employment Bill – stop press

On 7 December 2007, the Department for Business, Enterprise and Regulatory Reform published the Employment Bill. The main provisions are;

		the statutory dispute resolution procedures will be repealed in their entirety;
		the ACAS Code of Practice on Disciplinary and Grievance Procedures will be amended; and
		tribunals will have the power to adjust awards where parties have unreasonably failed to comply with the ACAS Code of Practice.

Other changes will include increasing the maximum penalty for underpayment of the minimum wage from a £5000 fine to an unlimited fine; amending the method for calculating minimum wage arrears; strengthening the powers of the Employment Agency Standards Inspectorate, and providing clearer rights for trade unions to determine their membership.

It is unlikely that these changes will take effect until April 2009 and we will keep you informed of the Bill’s progress.