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DISMISSAL - FAIR AND UNFAIR : A GUIDE FOR EMPLOYERS (PL714
Rev 13 - URN 05/1912)
Third-party
pressure for an employee's dismissal
Pressure by
a third party (for example, a trade union) by the calling or threatening
of industrial action cannot be taken into account in the determination
of whether a dismissal is fair or unfair by a tribunal. However,
where pressure is exerted on the employer to dismiss an employee
because the employee is not a member of a trade union, a party
exerting pressure can be joined (in Scotland, sisted) by either
the employer or the employee in proceedings before a tribunal
and may be required by the tribunal to pay some or all of any
compensation awarded.
Effective
date of termination
The effective
date of termination for the purpose of calculating length of service
is, in general, the date on which dismissal takes effect, except
where the employee has not been given the required statutory notice,
in which case the effective date of termination is the date on
which that notice would have expired if it had been given.
Notice
period
The required
statutory notice is one week if the employee has been employed
for one month but less than two years, two weeks for two years,
three weeks for three years and so on up to 12 years. After 12
years' service the period of notice required is 12 weeks. The
employee may be entitled to longer notice under the contract of
employment. If a business is transferred from one person to another,
the period of employment of an employee in the business at the
time of the transfer counts as a period of employment with the
transferee and does not break the continuity of the period of
employment.
Interim
relief
Employees
may make an application to a tribunal for interim relief if they
consider that the reason or principal reason for their dismissal
was:
-
trade union membership, trade union non-membership, trade union
activities or proposed activities, or use or proposed use of
trade union services; or
-
failure to accept an unlawful inducement by an employer to
relinquish trade union rights or to
disapply
collective agreements; or
-
failure to accept an offer made by an employer to induce the
employee to be a trade union member; or
-
refusing to make a payment in lieu of union membership, or
objecting to their employer deducting a sum from their wages or
salary to make such a payment; or
- that they
performed or proposed to perform any functions they had as health
and safety representatives or committee members or as employees
designated to carry out workplace health and safety activities;
or
- that they
performed or proposed to perform any functions they had as an
occupational pension scheme trustee; or
- that they
performed or proposed to perform any functions they had as an
employee representative for consultation about redundancy or
business transfers or as a candidate to be a representative
of this kind or that they participated in the election of such
a representative; or
- that they
performed or proposed to perform any functions they had as a
representative of members of the workforce or as a candidate
to be a representative of this kind for the purposes of the
Working Time Regulations 1998; or
- that they
made a protected disclosure within the meaning of the Public
Interest Disclosure Act 1998; or
- that they
exercised or sought to exercise rights relating to trade union
recognition procedures; or
- that they
exercised or sought to exercise their right to be accompanied
to a disciplinary or grievance hearing or that they accompanied
or sought to accompany a fellow worker to such a hearing.
If at the
interim hearing, the tribunal decides that they think it likely
that at the full hearing the employee will be found to have been
unfairly dismissed for one of these reasons, they may make an
order that the employer temporarily reinstate or re-engage the
employee or for the contract of employment to be continued until
the complaint of unfair dismissal has been finally settled by
agreement or decided at a tribunal hearing.
Applications
for interim relief must be received by the tribunal within seven
days of the effective date of termination.
Order
for reinstatement or re-engagement
In deciding
whether to make an order that the employer should reinstate the
employee in the same job or re-engage the employee under a new
contract of employment, the tribunal will take into account:
- the employee's
wishes;
- whether
it is practicable for the employee to return to work for the
employer (there may, for example, be circumstances in which
it is not practicable because relationships at the work place
have been seriously damaged);
- in cases
where the employee was partly to blame for the dismissal, whether
or not it would be just to make such an order.
From 1
October 2004, where a tribunal orders the reinstatement or
re-engagement of an employee who was dismissed without statutory
dismissal and disciplinary procedures having been followed by the
employer, and where failure to follow them was wholly or mainly
the employer's fault, it will also award four weeks' pay to the
employee (unless it considers that this would result in injustice
to the employer).
If the employer
fails to comply with the terms of an order for reinstatement or
re-engagement the tribunal, on being notified of the failure,
will make an award of compensation calculated in the ordinary
manner provided for in the legislation (subtracting, from 1
October 2004, the award of four weeks' pay described in the last
paragraph). Also the tribunal will
make an additional award of compensation to be paid by the employer,
unless the employer satisfies the tribunal that it was not practicable
to comply with the order for reinstatement or re engagement as
the case may be.
How
awards of compensation are worked out
Basic award
The basic award is calculated by adding up the following amounts,
but only continuous employment within the last 20 years can count:
- 1½ weeks'
pay for each complete year of employment when an employee was
between the ages of 41 and 65 inclusive;
- 1 week's pay for each complete year of employment when an employee
was between the ages of 22 to 40 inclusive;
- ½ week's pay for each complete year of employment when an
employee was below the age of 22.
The maximum
number of weeks' pay that may be awarded is 30. There is also
a maximum week's pay that can be used to calculate the award.
(The limit on a week's pay may vary from year to year: the current
figure is given in the document Limits
on Payments (PL827).)
- In trade
union, health and safety, employee representative, workforce
representative and occupational pension scheme trustee cases
(see Interim Relief), there is a minimum figure for the
basic award. (This minimum may vary from year to year: the current
figure is given in the document Limits on Payments
(PL827).)
The basic
award, including the minimum award in trade union and health and
safety cases, can be reduced if the employee:
- contributed
to some extent to the dismissal, or his or her conduct prior
to the dismissal otherwise justified the reduction;
- was within
a year of age 65 at the effective date of termination (see Those
who may not complain of unfair dismissal);
- unreasonably
refused an offer of reinstatement or unreasonably prevented
the employer from complying with an order of reinstatement;
- has already been awarded or has
received a redundancy payment;
- has been
awarded any amount in respect of the dismissal under a designated
dismissal procedures agreement.
From 1
October 2004, where an employee has been dismissed without
statutory dismissal and disciplinary procedures having been
followed where they should have been (if failure to follow them
was wholly or mainly the employer's fault) and the amount of the
basic award is less than four weeks' pay (before any reduction for
the last two reasons above), the tribunal will increase it to four
weeks' pay unless it considers that this would result in injustice
to the employer.
Compensatory
award
This award compensates the employee for the loss suffered as a
result of the dismissal insofar as the employer is responsible
for this loss. As well as covering loss of earnings between the
dismissal and the hearing and an estimate of future loss, the
tribunal will also consider matters such as loss of pension and
other rights and any reasonable expenses incurred by the employee
as a result of the dismissal.
The compensatory
award is an amount the tribunal considers just and equitable in
the circumstances, but there is a maximum compensatory award
except in cases where the reason for the dismissal is that the
employee made a protected disclosure under the Public Interest
Disclosure Act 1998 or took action relating to health and safety. (The maximum compensatory award may
vary from year to year: the current figure is given in the document
Limits on Payments
(PL827).) The tribunal will reduce the award if it finds that the
employee was partly to blame for the dismissal or the employee
did not mitigate his or her loss: for example, by failing to make
a reasonable effort to obtain another job. Certain payments made
by the employer to the employee, for example wages in lieu of
notice or an ex gratia payment, will normally result in
a reduced compensatory award. The compensatory award will also
be reduced by the amount of the employee's earnings from any other
employment between the dismissal and the tribunal hearing.
Since 1999, tribunals have had the
power to reduce the compensatory award where the employee has not
made use of an internal appeals procedure whose existence he or
she was informed of at or shortly after the time of dismissal.
Similarly, the tribunals have been able to make supplementary
award, subject to a maximum of two weeks' pay, where an employer
has not allowed the employee to use an appeal procedure provided
by him or her. These provisions will be replaced on 1 October
2004, when statutory dismissal and disciplinary procedures come
into force. Under the new provisions, if an employer dismisses an
employee without the statutory procedures having been completed
where they applied and are not treated as having been complied
with, and the failure to complete them was wholly or mainly the
employer's fault, any compensatory award will be increased by at
least 10 per cent and up to 50 per cent. Similarly, if the
procedures were not completed and the fault lay wholly or mainly
with the employee, any compensatory award will be reduced by 10 to
50 per cent. At what point on the scale between 10 and 50 per cent
to make the increase or reduction will be at the tribunal's
discretion, and in exceptional cases it will be able to make one
of less than 10 per cent or none at all.
Additional
Award
This award compensates the employee for the additional loss suffered
because of the employer's failure to comply with a tribunal's
order for reinstatement or re-engagement. The additional award
will be between 26 and 52 weeks' pay. There is a maximum week's
pay that can be used to calculate the additional award. (The limit
on a week's pay may vary from year to year: the current figure
is given in the document Limits
on Payments (PL827).)
Note:
Employment tribunals may however exceed these limits if the total
compensation awarded (apart from the basic award) would otherwise
be less than the arrears of pay element of the original award
with which the employer failed to comply.
Interest
on tribunal awards
Legislation
provides that an employer who does not pay the compensation awarded
by the tribunal within 42 days of the tribunal's decision, will
be required to pay simple interest on the amount outstanding.
However, in
relation to awards in cases of discrimination on the grounds of
sex, race and disability, interest begins to accrue from the day
after the day on which the tribunal's decision is sent to the
parties. However no interest will be payable if the full amount
of the award is paid to the complainant within 14 days of the
decision being sent out.
Exemption
from the unfair dismissal provisions
The parties
to a dismissal procedures agreement may apply jointly to the Secretary
of State to substitute the agreement for the unfair dismissal
provisions of the legislation. He may do so if he is satisfied
on all the following points:
- that every
trade union which is a party to the dismissal procedures agreement
is an independent trade union;
- that the
agreement provides for procedures to be followed in cases where
an employee claims that he or she has been, or is in the course
of being, unfairly dismissed;
- that these
procedures are available without discrimination to all employees
falling within any description to which the agreement applies;
- that the
remedies provided by the agreement in respect of unfair dismissal
are on the whole as beneficial as (but not necessarily identical
with) those provided by the legislation;
- that the
procedures provide either for arbitration in every case, or
at least arbitration in cases where a decision cannot be reached
and the right to submit any question of law arising out of a
decision to arbitration; and
- that the
provisions of the agreement are such that it can be determined
with reasonable certainty whether a particular employee is one
to whom the agreement applies or not.
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