Employment Law E-Bulletin

Cases: Nov 07

Belief that continued employment is illegal can be ‘some other substantial reason’

Earlier in the year we  reported on the case of Klusova v London Borough of Hounslow in which the EAT decided that Hounslow had not unfairly dismissed Ms Klusova when they failed to follow the Statutory Disciplinary and Dismissal Procedure (“SDDP”) but this decision has now been overturned by the Court of Appeal.

Ms Klusova was dismissed because Hounslow wrongly thought that it was illegal to continue to employ her because her work permit had expired. Ms Klusova had in fact applied for an extension but failed to produce any evidence of the application to her employer. As Hounslow thought they could not legally continue to employ Ms Klusova they terminated her employment without following the SDDP because this is not required for a section 98(2)(d) dismissal (dismissal on the grounds of illegality).

However, the Court of Appeal has now decided that in order for the employer to have a potentially fair reason to dismiss under section 98(2)(d) of the Employment Rights Act 1996, there needs to be an actual statutory bar on the employment and not just a belief of it.

A mistaken belief as to the illegality of continuing to employ someone could be a potentially fair reason for dismissal under section 98(1)(b), in that it could be classified as ‘some other substantial reason’. However, for a ‘some other substantial reason’ dismissal the employer must follow the SDDP and therefore Ms Klusova’s dismissal was automatically unfair because Hounslow had not done so and were wrong in their belief that it was illegal to continue to employ Ms Klusova.

As we noted at the time, although this case is a good reminder that there are some circumstances in which the SDDP does not apply, it is a good example of a situation where the employer believed that they were entitled to dismiss without following the SDDP with the courts later finding otherwise and consequently turning what could have been a fair dismissal into an automatically unfair one because of the decision not to use the SDDP. The case should serve as a stark warning as to why it is always advisable to follow the SDDP.

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Age cases stayed to await the Heyday decision

The Johns v Solent SD Limited is another case which we reported upon earlier in the year but which has been overturned on appeal.

This case concerns a claim for age discrimination and unfair dismissal by an employee over the age of 65. Mr Johns asked the Employment Tribunal to stay his case pending the outcome of the Heyday litigation which is challenging the government’s decision to allow employers to have a mandatory retirement age of 65.

Even though the decision in the Heyday case is currently waiting for a ruling by the European Court of Justice, the Employment Tribunal originally refused to stay Mr John’s claim. However the EAT has now ruled that proceedings brought by employees over 65 should be stayed until the issues in Heyday have been decided, as cases such as this turn on the ECJ’s decision.

Solent has been given permission to appeal this decision, so we may be reporting on this case again in the future!

New evidence not allowed at appeal

The case of Todd t/a Hygia Professional Training v Mr Cutter should serve as a warning to all employers when investigating disciplinary allegations after Mr Cutter won his claim for unfair dismissal despite the fact that the EAT was presented with ‘very powerful evidence’ in support of the employer.

Mr Cutter had been employed as a training consultant but was dismissed in December 2005 because he was suspected of poaching clients for a proposed new company.

Mr Todd did not present any witnesses statements to the original Tribunal to support his contention that Mr Cutter had been poaching clients whilst still working at Hygia and, partly because of this lack of evidence, the Tribunal found in favour of Mr Cutter, awarding him £13,400 for unfair dismissal.

Following the decision Mr Todd then began to gather evidence against Mr Cutter. He collected witness statements which amounted to strong evidence that Mr Cutter had been poaching clients and indicated that a 100% reduction in compensation because of Mr Cutter’s actions may have been appropriate in this case.

The EAT held that even though the evidence against Mr Cutter was very strong, this evidence had come before them too late and that they could not consider it as they were ‘entirely satisfied that the evidence could have been available (to put before the Employment Tribunal) by the taking of reasonable steps’.

It was held that it was in the interests of justice that matters were, as far as possible, heard once and only once and that parties should not get a second bite of the cherry. As a result Mr Todd was unable to rely on the evidence even though it was compelling.

This case should serve as a warning to all employers of the need to investigate as fully as possible prior to the disciplinary hearing or before making the decision to dismiss because evidence that is collected after this point may well be inadmissible no matter how damning it may be.

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Unacceptable behaviour cannot be ignored simply because it can be excused by illness

In the case of Sinclair v Wandsworth Council the EAT has held that is wrong for Employment Tribunals not to look at the unacceptable conduct of an employee merely because the behaviour can be excused with reference to an underlying illness.

In this case Mr Sinclair was an alcoholic, who was disciplined and then dismissed for drinking/being under the influence of alcohol whilst at work. Mr Sinclair had been offered help to deal with his addiction but was reluctant to engage with the help that his employers were offering him and he was therefore dismissed.

There were problems concerning the manner of the dismissal (in particular Wandsworth Council’s failure to follow its own policy on alcohol misuse) and as a result the dismissal was found to be unfair. However, the Employment Tribunal held that there should be a 25% reduction in the compensation awarded to Mr Sinclair because of his behaviour prior to the dismissal.

The employer appealed for a number of reasons one of which was that the reduction in the compensation awarded to Mr Sinclair should have been higher than 25% on the basis that not enough consideration had been given to the previous occasions on which he had turned up to work whilst under the influence of alcohol or had been found drinking at work.

The EAT agreed and held that just because the reason underlying the conduct was illness, this did not mean that the conduct should be tolerated by the employer. This is a useful decision for employers who are facing what is a very difficult situation. The ruling effectively means that, whilst employers should be sympathetic towards those suffering with addiction, any misconduct which arises as a result can be dealt with in the usual way and does not have to be tolerated when it would not be tolerated in other cases.

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For further information on how these cases might affect you, contact the employment law team of Burnetts Solicitors on 01228 552222.

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