Employment Law Update

This month we look at three topics:-

1. the constitution of appeals
2. dismissal with less than one year's service
3. agency workers and the potential liability to the end user

The importance of the procedure adopted at appeals

The case of Dennis Wise -v- Filbert Realisations (Formerly Leicester City Football Club) serves as a useful reminder of a fundamental principle relating to the conduct of appeals. The facts were extremely simple. Dennis Wise hit a team mate in the face. Following a club disciplinary hearing he was dismissed for serious misconduct. Dennis Wise had the right to appeal to the Football League Disciplinary Committee.

He did appeal and the finding of serious misconduct was upheld. Amazingly the disciplinary committee held that dismissal was disproportionate and a fine of two weeks wages was substituted. As an aside there are not many employers that would find hitting another employee in the face didn’t merit dismissal. Leicester City Football Club had the right to appeal further to the Football League Appeal Committee. They did so. The Football League Appeal Committee held that the Football League Disciplinary Committee had no power to decide that dismissal was disproportionate and reinstated the original decision. Dennis Wise then took matters via the Employment Tribunal procedure. It was held that at the original disciplinary hearing there was procedural unfairness. Leicester City Football Club, however, argued that as Dennis Wise had what was accepted as a procedurally fair hearing before the Football League Disciplinary Committee and before the Football League Appeal Committee, and further that there was no dispute as regards the finding of serious misconduct, that dismissal was appropriate. The EAT disagreed. Fairness is a required not only in the sanction but also in the procedure. The appeals were simply reviews, not rehearings. Procedural defects in the procedure can only be cured on appeal if there is a rehearing.

Comment

In practice we find that the vast majority of appeals are actually reviews, not rehearings. The difference is crucial. A rehearing involves hearing matters afresh from the beginning including all the relevant evidence. A review is simply looking at any particular points raised, by the employee. The employer who holds a rehearing benefits because if things have gone wrong at the initial stages, those procedural irregularities can be cured. If the appeal, however, is only a review, they cannot. We recommend all clients check that their written disciplinary procedure makes it clear that any appeal is by way of a rehearing. There is no report as to the compensation Dennis Wise received but suspect it was substantially reduced due to the contributory conduct of Dennis Wise.

Dismissal with less than one year’s service

Generally speaking if an employee is dismissed with less than one year’s service, unless the dismissal is for an impermissible reason, an Employment Tribunal has no jurisdiction to hear an unfair dismissal complaint. The case of Harper -v- Virgin Net Ltd [2004] EWCA Civ 271 addresses the interesting issue of whether an employee, with less than one year’s service, can complain that their dismissal was wrongful and as a result they have lost the chance of working for one year and, therefore, claiming unfair dismissal. The facts were that H worked for VN Ltd on a temporary contract commencing on the 4th April 2000. On the 1st November 2000 H was given a permanent contract under which her employment could be terminated by either party on three months notice. There was the normal right to dismiss instantly for gross misconduct. In January 2001, an incident occurred and H was given a formal written warning for misconduct. There was no suggestion the behaviour amounted to gross misconduct. Her appeal on the 2nd March 2001, was dismissed. VN Ltd then had second thoughts about H’s continued employment and later that day gave her a letter dismissing her, with immediate effect. If, of course, H had been given her contractual notice of three months, she would have remained in work and had more than one year’s service and so have had a right to claim unfair dismissal. H brought a claim for wrongful dismissal. A claim for wrongful dismissal involves a claim that the employee has been given incorrect or no contractual notice. Initially the Employment Tribunal upheld H’s claim and also took the view that had notice been given H would have had one year’s service and she would have succeeded in an unfair dismissal claim and, therefore, was entitled to compensation for this element of her claim. Subsequent appeals resulted in the case reaching the Court of Appeal. It was held that H was entitled to three months notice as the dismissal was not for gross misconduct, but not compensation to take into account the fact that she would have been unfairly dismissed.

Comment

While the case finally puts to bed the argument that has been circulating for some years, that employees with less than one year’s service can claim for the loss of chance of an unfair dismissal claim if they were given their proper notice, it still leaves a feeling of unfairness towards the employee. Our advice always is, that with employees who don’t have one year’s full service, to consider using the employer’s formal disciplinary procedure as quickly as possible. This has the advantage that if the employee later claims their dismissal was for an inadmissible reason (for example, such as race) the employer will be able to demonstrate at least a fairness in relation to procedure.

Agency workers

The case of Brook Street Bureau (UK) Ltd -v- Dacas - Court of Appeal [2004] EWCA Civ 217 is interesting as it addresses what is now becoming a more common problem, namely who employs, if anyone, an agency worker. Is it the agency or the end user? In this case D was registered as a temporary worker with BSB, an Employment Agency. She was assigned to work as a cleaner for Wansworth Council. The agreement between herself and BSB stated that she was not a BSB employee. D worked exclusively for Wansworth Council for over four years until she was dismissed. Wansworth Council controlled her day to day activities. Her employment ended and D claimed she was unfairly dismissed.

The matter reached the Court of Appeal. The Court of Appeal’s view was as follows:-

1. The contractual documents between D and BSB were not decisive but were relevant matters to be taken into account.
2. Consideration should be given as to whether a contract of employment had been implied between D and Wansworth.
3. The majority of the Court of Appeal took the view that D did have an implied contract of employment with Wansworth Council because she had worked for them for a long period of time and the degree of control the Council exercised over her. The fact there was no written contract between Wansworth Council and D was not fatal.

The result of Dacas is as follows. An example may assist:-

Assume X is engaged by an Employment Agency Y to work for a client Z.

X works virtually all his time for Z over a lengthy period of time. Z then decides that it no longer wants X on its premises. X makes a complaint of unfair dismissal. The position appears to be as follows:-

X’s Position

i. X should bring a complaint against Y and Z.

ii. Between X and Y it is unlikely there is a contract of employment unless there is an obligation on Y to supply work and an obligation upon X to do it, and there is an element of control by Y.

Y’s Position

i. Y position is provided that the engagement document is correctly drafted, there is no obligation to offer work and no obligation under the agreement for X to do the work then it is unlikely there will be a contract of employment.

Z’s Position

i. Z may be liable if there has been a lengthy secondment and Z had a high degree of control over X.

Comment

This case is particularly relevant given that often Employment Agencies now supply staff on lengthy contracts. Merely because a worker is supplied via an Employment Agency does not necessarily mean that the end user can ask for the employee to be removed without potentially risking an unfair dismissal claim. In fact, we recently acted for an employment agency on Teesside where much the same happened. The end user, a large chemical company, paid a substantial out of court settlement to the agency worker who brought an unfair dismissal claim. Our client escaped liability!

If you would like further information please do not hesitate to contact Kevin McKernan, Head of Employment Unit at Crutes Law Firm .

« Back to Newsletter archives