Back to the Future with the Trade Union Bill?
For most employers in the private sector, trade unions and industrial action are not a major concern. However the Government has decided to prioritise a significant tightening up of industrial action law designed to make calling a strike harder than it has ever been. The Trade Union Bill is likely to come into force next year. It builds on the changes made by the Conservative Governments of 1979 – 1997 by requiring all strike ballots to have a turn-out of at least 50 per cent and – in key services such as health education and transport – requiring the ‘yes’ vote to amount to at least 40 per cent of those entitled to vote. This presents a serious challenge for trade unions as strike ballots have to be conducted entirely by post – which tends to lead to a low turn out.
Other changes are just as significant however, with a new rule requiring a fresh strike ballot to be held every four months and a requirement for unions to give 14 days’ notice of any industrial action (up from the current 7 days’ notice requirement). The wording on the ballot paper will have to give details of the dispute – which might scupper the ballot entirely if the employer then changes its offer – and the rules on pickets are likely to be tightened significantly. Some have argued that the Government is trying to address a problem that was solved twenty years ago and it is certainly true that the number of days lost to industrial action is now just a small fraction of what it was in the mid-80s. The trade unions are absolutely outraged by the proposals – but the Government seems determined to press ahead. A cynic might suggest that those two facts are not completely unrelated.
Unfair dismissal and consistency of treatment
Central to most people’s understanding of fairness is the idea of consistency – that similar cases should be treated in a similar way. In MBNA Ltd v Jones the employer organised an evening at Chester Racecourse for a number of its employees. It was made clear that this was a work event and that normal standards of conduct would apply. Mr Jones and Mr Battersby had both been drinking for some time when they arrived. They needled each other from time to time over the course of the evening, culminating in Mr Jones punching Mr Battersby in the face. Later in the evening Mr Jones went to a club. Mr Battersby followed him and sent him a number of text messages inviting him to join him outside where he would “rip your [expletive deleted] head off”. Luckily, as the EAT later observed, he “never carried out his threats” and Mr Jones did not even see the messages until the next day.
When the employer investigated the incidents Mr Jones was dismissed but Mr Battersby was only given a final written warning, despite the employer taking the view that his threatening text messages had amounted to gross misconduct. The employment tribunal held that if both Mr Jones and Mr Battersby had been sacked then the dismissals would have been fair. However, by treating the two employees differently the employer had acted unreasonably and the dismissal of Mr Jones was rendered unfair.
The EAT overturned this decision. It was the fairness of the decision to dismiss Mr Jones that was in issue, not whether it was reasonable of the employer not to dismiss Mr Battersby. While inconsistency of treatment could lead to a finding of unfair dismissal, employment tribunals had to be aware that the circumstances of two cases were rarely identical. In this case, the employer had drawn a distinction between an actual punch which took place at a work event and a threat that was made later that evening but not carried out. The cases were not so similar that it was unfair of the employer to treat them differently and so the EAT reversed the employment tribunal’s finding.
Whistleblowing and the public interest
Employees are given special protection when they make what is called a ‘public interest disclosure’ that someone has engaged in wrongdoing. A dismissal for such “whistleblowing” will be automatically unfair and there is no cap on the amount of compensation that a employment tribunal can award.
Public interest disclosures can relate to any breach of a legal obligation as well as other areas of wrongdoing such as the commission of criminal offences or breach of environmental standards. Since June 2013, however, there has been a requirement that the person making the disclosure must reasonably believe that the disclosure is ‘in the public interest’.
This raises the question of what ‘public interest’ means. In Underwood v Wincanton Plc Mr Underwood and (three colleagues) raised an internal complaint about the allocation of overtime and the behaviour of management. When he was dismissed he claimed that the dismissal was because of that complaint and was therefore automatically unfair. The employment tribunal held, however, that the internal complaint about the allocation of overtime was simply a dispute about the terms and conditions of employment and a disclosure made in respect of it could not be said to be ‘in the public interest’. That part of the claim was accordingly struck out.
The EAT reversed this decision on appeal. There was nothing to prevent a dispute about terms and conditions of employment being the subject of a public interest disclosure – and the requirement that the disclosure be in the public interest simply meant that it should not concern the individual employee alone. In this case, the complaint was made on behalf of a number of drivers and a group of employees could be regarded as a section of the public. The case will now have to be decided on its merits. In particular the employment tribunal will have to decide whether the disclosure that was made was indeed the reason for the dismissal of Mr Underwood.
It has to be said that this finding does not sit easily with the intention expressed by the government when the “public interest” condition was introduced and as a matter of logic, it is not obvious that a dispute about internal workplace issues is a matter of public interest. A whistle-blowing claim has often seemed to be the weapon of choice for a disgruntled employee to bring a “nuisance” claim – on account both of not needing two years’ service and not having a limit on compensation. This decision goes a long way to reversing a change which was ostensibly introduced (in part) to clamp down on such spurious claims and so is unwelcome news for employers.
Wrongful and unfair dismissal
Surely the prize for the ‘most head-scratching’ employment tribunal decision of the year must go to the Employment Judge in the case of British Heart Foundation v Roy. Ms Roy was accused by her employer of stealing money. Following an investigation and a full disciplinary process she was summarily dismissed – that is, dismissed without notice. The employment tribunal found that the dismissal was fair because the employer had followed a fair procedure and reached the honest and reasonable conclusion that she was guilty. In fact the employment tribunal went further and found that even if the dismissal had been found to be procedurally unfair they would have awarded no compensation because she was guilty of stealing and so was 100 per cent to blame for her own dismissal.
So far so good. But at this point the wheels fell off the judgment wagon, so to speak. As well as unfair dismissal, Ms Roy was claiming wrongful dismissal – a claim based on the failure to give her the notice due under her contract of employment. It is accepted that there is no requirement to give notice if the employee is guilty of gross misconduct because gross misconduct is a fundamental breach of the contract of employment. Since the employment tribunal had found that Ms Roy was indeed guilty of theft you might have thought that it would also dismiss her wrongful dismissal claim.
Oh no. In fact the employment tribunal upheld her claim finding that the employer’s disciplinary policy did not make it sufficiently clear that stealing money could lead to dismissal without notice. On an application for review, the employment tribunal ruled that in any event, by choosing to hold a disciplinary hearing the employer had ‘affirmed’ the contract and lost the opportunity to dismiss without notice.
Not surprisingly the EAT overturned this decision calling it ‘totally flawed’. Theft was so clearly an act of gross misconduct that there was no need for the contract itself to spell out that the penalty was summary dismissal – although the disciplinary procedure did in fact make that clear. Nor was the decision to hold a disciplinary hearing an indication that summary dismissal was off the table. During a disciplinary hearing the future of the employee is in the balance and the employer is in the process of deciding what to do. In this case the employer was clearly entitled to dismiss without notice.
False allegations of race discrimination
Direct discrimination occurs when one person is treated less favourably than another because of a protected characteristic – such as race. However discrimination is only unlawful when it involves less favourable treatment in specific circumstances such as deciding who to employ, dismissing someone or subjecting them to a detriment. The distinction is illustrated by the odd case of Cordant Security Ltd v Singh. Mr Singh was sent home one morning because his boss thought that he smelt of alcohol. Afraid of potential disciplinary proceedings, Mr Singh accused his boss of making racist remarks to him – although the employment tribunal later found that this allegation was completely false and rejected his subsequent complaint of racial harassment.
The employment tribunal went on to find, however, that the employer had discriminated against Mr Singh by failing to investigate his – completely false – complaint. The employment tribunal reasoned that the complaint against Mr Singh, made by a white manager, was investigated fully, whereas the employer had done nothing to investigate the complaint made by Mr Singh. The employer failed to explain this difference in treatment and the employment tribunal concluded that it was based on race. They went on to make a declaration of race discrimination but awarded no compensation because Mr Singh had not actually suffered any injury.
The EAT overturned the finding of discrimination. To succeed in his claim Mr Singh needed to show not only that he was treated less favourably because of race, but that he was subjected to some sort of detriment as a result. Since his complaint was false, the failure to investigate it did not cause him any detriment and it therefore followed that there had been no unlawful discrimination.
Disability Discrimination – absence dismissals
An employee who is dismissed for continued ill-health will often have also been dismissed because of something arising in consequence of a disability – so the employer may face not only an unfair dismissal claim but a disability discrimination claim as well.
In Monmouthshire County Council v Harris, Ms Harris went off sick with a severe stress related illness and the prognosis from Occupational Health was that her condition was chronic. There was no indication of when – if ever – she might be fit to return to work. She was then dismissed in circumstances that the employment tribunal found to be unfair – she had not been properly consulted on the prospects for her return and the employer had not made it clear to her that it was considering a dismissal. The employment tribunal also found that the initial trigger for her illness had been the employer’s failure to honour agreements it had made with Ms Harris to allow her to work from home for part of the week. That amounted to a failure to make reasonable adjustments – although the employment tribunal rejected the claim in respect of that issue because it was presented after the time limit for submitting a claim had expired. Nevertheless, the employment tribunal found that the employer could not justify the decision to dismiss because if it had allowed Ms Harris to work at home as agreed she may not have been absent at all. It awarded Ms Harris the eye-watering sum of £238,216.37.
The EAT held that this was wrong. While the employer’s initial failure to allow Ms Harris to work at home was relevant, the employment tribunal should have asked itself how long the employer could be expected to wait before deciding to dismiss. The fact was that Ms Harris was unfit for work and likely to remain so for the foreseeable future. There was no reasonable adjustment that could have been made at the time of the dismissal that would have resulted in her returning to work and the employment tribunal should have taken these factors into account in deciding whether the decision to dismiss was justified. The case will have to be sent back to the employment tribunal for this point to be considered afresh and – at the very least – it is to be expected that the damages awarded to Ms Harris will be reduced dramatically.
Indirect discrimination takes place when the employer applies a ‘provision, criterion or practice’, which places people who share a protected characteristic at a particular disadvantage. For example a practice of insisting that employees work full time has been held to amount to indirect discrimination against women on the basis that women are more likely than men to have caring responsibilities that require them to work part-time.
In Bethnal Green and Shoreditch Educational Trust v Dippenaar the employee was a 39 year old PE teacher with over 12 years’ service. Despite always being rated highly in performance appraisals, a new manager decided that her performance was not satisfactory and began performance management procedures. Ms Dippenaar felt that she was being forced out in an attempt to replace her with a cheaper, and inevitably younger, employee (a newly recruited PE teacher would start on just half of her current salary). She eventually resigned and claimed constructive dismissal and indirect age discrimination.
The employment tribunal upheld her claims, finding that there was no justification for describing her performance as unsatisfactory and that the way in which she was treated amounted to a breach of the implied term of mutual trust and confidence. The employment tribunal also found that the employer had adopted a practice of replacing experienced members of staff with less experienced ones in order to save on wage costs. Since the new, less experienced staff would generally be younger, this amounted to indirect age discrimination.
The EAT upheld the findings on constructive dismissal, but allowed the appeal in relation to age discrimination. There was not enough evidence that the employer had actually adopted a practice of replacing experienced staff. There was a rumour amongst staff that senior teachers were being replaced by more junior ones and there was some statistical evidence that older teachers were more likely to leave the school than younger ones. That in itself was not surprising, however, and did not come near to showing that the way in which Ms Dippenaar was treated was more than an isolated incident. A practice had to be applied more widely before it could form the basis of an indirect discrimination claim.
An employer should normally follow a fair disciplinary procedure before dismissing an employee for misconduct. Generally that means that the employee should be fully informed of the allegation that has been made, have a fair opportunity to put forward his or her side of the case and then have the matter considered in a fair and impartial way. Not every procedural failing, however, will render a dismissal unfair. The employment tribunal is entitled to look at all of the surrounding circumstances of the case.
In Sharkey v Lloyds Bank plc, Ms Sharkey worked in a customer contact centre and was dismissed for allegedly terminating customer calls in order to avoid work. A crucial question was whether the data showing the high number of calls that were cut-off could have been the result of a system error rather than Ms Sharkey effectively hanging up on customers. The manager conducting the disciplinary hearing did not deal with this issue, but the manager who conducted the appeal did make enquiries and received ‘conclusive’ information that showed that a system error would not have been recorded in the same way as the employee terminating a call deliberately. Ms Sharkey was not however able to respond to this evidence because it was only obtained at the appeal stage.
The employment tribunal held that the dismissal was fair and this conclusion was upheld by the EAT. Although it was a potentially serious failing not to allow the employee to respond to an important piece of evidence, the fact that the evidence was so conclusive that no response was possible meant that on balance the dismissal was not unfair. This was a close-run thing, however and the EAT made it clear that the employment tribunal would have been entitled to make a finding of unfair dismissal. Best practice is for employers to ensure that the initial investigation is as thorough as possible – relying on an appeal process to tie up any loose ends is risky, but it can be helpful as it can sometimes “save” an otherwise flawed process.