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UNFAIR DISMISSAL (1)

UPDATED: 10.06.08

The Law:
the statutory provisions which apply to unfair dismissals, are to be found in sections 94-107 of the Employment Rights Act 1996 (ERA 1996).

See also:
EC Equal Treatment Framework Directive 2000/78/EC;
Employment Act 2002 (see Schedule 2 of the Act);
Employment Act 2002 (Dispute Resolution) Regulations 2004; SI 2004/752; and the Employment Equality (Age) Regulations 2006; SI 2006/1031.
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An unfair dismissal occurs when an employer:

(1) dismisses an employee for a reason that is not one of the potentially fair statutory reasons
and/or

(2) dismisses the employee unreasonably.

There are two aspects of unfair dismissal which run together and are equally important:

* the substantive aspect (i.e. the need for employers to have a 'fair' reason for dismissing)

* the procedural aspect (i.e. the requirement that, when dismissing an employee, employers
follow a fair procedure - such has holding an investigation, a hearing, an appeal).

Note: the Employment Act 2002 (Dispute Resolution) Regulations 2004, SI 2004/752, came into force on 1st October 2004. The source of the procedures is the Employment Act 2002. The statutory Regulations require that an employer, before taking 'relevant disciplinary action' against an employee or dismissing an employee, must: (1) give the employee a written statement about the matter in question; (2) arrange a meeting with the employee to discuss the matter; and (3) give the employee the right to appeal if the employer's decision is to impose a disciplinary penalty or dismiss the employee. Where a dismissal is carried out in breach of the statutory procedure, it will be automatically unfair. As a result, the employer may have to pay a minimum of 4 weeks' pay to the employee as well as an increase in the compensatory award of between 10% and 50%.

Similarly, an employee who has 'a complaint about an action that his employer has taken or is contemplating taking in relation to him' must, when seeking to raise a grievance or before (or immediately after) terminating the contract of employment and making a claim for unfair constructive dismissal because of a fundamental breach of contract by the employer: (1) submit a written grievance to the employer whereupon; (2) the employer must hold a meeting to which the employee is invited after which, should the employer's decision go against the employee; (3) the employee must appeal and; (4) the employer must hold a further meeting and inform the employee of the final decision - see Statutory Dismissal and Disciplinary Procedures and Statutory Grievance Procedures

Note: the statutory dismissal procedure (i.e. the 'three steps' standard dismissal procedure) does not apply to planned retirement dismissals which take place at or above the national default age of 65 or the employer's normal retirement age from 01 October 2006. (A dismissal for the reason of a genuine retirement is also called a 'fair retirement dismissal' or a 'default retirement dismissal.') The reason the statutory dismissal procedure does not apply is because the statutory compulsory retirement dismissal procedure stated in the Employment Equality (Age) Regulations 2006, in force from 01 October 2006, applies instead.

Note: a 'genuine' retirement dismissal is a dismissal for the reason of retirement and cannot be used by employers (to avoid paying compensation) as a substitute for one of the other fair reasons such as capability, conduct, redundancy, breach of statutory duty or some other reason, whether substantial or not. A dismissal for the reason of retirement, although a clear act of direct discrimination because of age, is fair by statute and therefore lawful.

An employer may, however, agree to continue employing an employee aged 65 or more. Where an employer does this, the employer is not thereafter permitted under the Employment Equality (Age) Regulations 2006 to dismiss such an employee unless there is a statutorily fair reason for so doing. One of these fair reasons would be a 'fair retirement dismissal' where the employee continues working for the employer whereupon the employee, after five or ten years, eventually reaches the employer's absolute maximum contractual age for employment (say 70 or 75 years old). When that happens, the employer would dismiss the employee: (i) lawfully in accordance with the contract and, (ii) fairly by following the statutory retirement procedure.

But where an employer employs an employee who is 65 or more and the employer then dismisses her or him without following the statutory retirement procedure or dismisses arbitrarily the employee for a reason that is not statutorily fair (for example, the real reason for dismissal may be simply that the older employee is thought no longer to fit in with the employer's younger employees), the employee can make a claim to an employment tribunal for unfair dismissal and age discrimination (and redundancy, say, if the real reason for the dismissal was redundancy).

The effect of the Age Regulations is that when an employer agrees to an employee's request to continue working beyond the default retirement age of 65, two situations could arise:

(1) the employer may agree that the employee can continue working for: (i) an indefinite period; (ii) a limited period; or (iii) until a certain date. If situations (ii) or (iii) occur, the employer must follow the statutory retirement procedure when or whenever the employee's limited or specific period of employment comes to an end. Part of this procedure is that, before the potential termination of the employee's contract of employment for the reason of retirement takes place, the employer has a statutory duty to notify and inform the employee - at least six months before the employee's retirement date but no more than twelve months before the date - of her or his right to request to continue working for the employer. Likewise, a requirement of the procedure is that if the employee wants to continue working for the employer, the employee must make a request to the employer to do so within three months of her or his expected date of retirement otherwise he or she may lose the opportunity.

Important: if the employer fails in its statutory duty to follow the retirement
notification procedure by notifying and informing the employee of her or his right to
request to continue working for the employer, then that will be an act of unlawful age
discrimination: Holmes v Active Sensors Ltd, Southampton Employment
Tribunal, (Case No.3100214/07). However, if the employer correctly follows the
statutory retirement procedure and notifies the employee that he or she will be
dismissed for the reason of retirement and informs the employee of the right to
request that her or his employment should continue after the intended date of
retirement and the employee wants to do so, then the employee MUST follow the
correct statutory procedure for making the request by quoting explicitly in her or his
request that he or she is doing so under paragraph 5 of Schedule 6 to the Employment
Equality (Age) Regulations 2006, SI 2006/1031 - if the employee fails to do this and
is dismissed for the reason of retirement but feels that the employer did not consider
her or his request to continue working then, because he or she failed to quote para.5
as required by para.5(3), he or she will have her or his claim for unfair dismissal
under s.98Z, ERA 1996 dismissed by the employment tribunal: Holmes v Active
Sensors Ltd, Southampton Employment Tribunal (Case No.3100214/07).

(2) If the other situation arises whereby the employer agrees to continue to employ the employee for (i) an indefinite period after the statutory default retirement age of 65, the employer must then treat the employee just the same as its employees who are below the age of 65. This means that the employer cannot dismiss arbitrarily the employee in the way the employer may have done before the introduction of the Age Regulations merely because the employee is 65 or older. Instead, the employer must treat such an employee in the same way as it would or should treat an employee under that age and may only lawfully dismiss an employee who is 65 or older for one or more of the six statutorily fair reasons and, when doing so, must do so reasonably.

Case example: a cleaner at a dental practice who was dismissed two days after her 70th birthday was found by an employment tribunal to have been unfairly discriminated against on the ground of age. Her employer, in its defence, stated that the reason it had dismissed her was because of health and safety reasons in that it believed that because of her age she 'fell into a high risk category for health and safety.'
The employer's dismissal letter, that it left in her cleaning cupboard, stated: 'I'm sorry for having to break some bad news to you, due to your age and health problems you have fallen into the high risk category for health and safety. We cannot allow you to continue cleaning at the practice because of you being high risk.'
In response, she made claims to an employment tribunal for age discrimination, inter alia, being direct discrimination under Reg.3 of the Employment Equality (Age) Regulation 2006, SI 2006/1031. Note that the statutory provision (s.109(1)(b), ERA 1996) preventing employees over the age of 65 from claiming unfair dismissal was repealed on 01 October 2006 when the Employment Equality (Age) Regulations came into effect

Employment Tribunal: the tribunal held that she had been treated less favourably on the ground of age contrary to Reg.3(1)(a) of the Age Regulations (i.e. direct age discrimination.) The tribunal then went on to consider whether the employer had a justification defence under Reg.3(1) by showing that its treatment of her had been a proportionate means of achieving a legitimate aim. The tribunal recognised that the employer had had the legitimate aim of ensuring that the dental surgery was cleaned to a high standard. Nonetheless, the tribunal held that it was not proportionate to dismiss her without first discussing matters with her concerning her health and work performance. As the employee was over the statutory default retirement age of 65, it was open to the employer to simply dismissed her by reason of a compulsorily retirement by following the statutory retirement procedure. The employer had failed to do this. As a result, the tribunal found that her dismissal was an act of unlawful age discrimination and, having regard to the circumstances as well as the shock and distress of her dismissal, made an award to her of £1,030 for injury to feelings: Martin v SS Photay and Associates, Ashford Employment Tribunal, 17.05.07 (Case No.1100242/07).

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