United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR L WAREING (The Appellant in Person)
For the Respondent	MR E LEASON (Representative)


 


SUMMARY

Unfair Dismissal – Procedural fairness/automatically unfair dismissal

Unfair Dismissal – Polkey deduction

ET wrongly thought that if employer established that he would have dismissed his employee anyway there could be no automatically unfair dismissal. This misread s. 98A(1) as subject to s. 98A(2) rather than the other way around. Employee who would anyway have been dismissed for redundancy was thus entitled at least to a basic award. Compensation agreed between parties, so no remission.


 


THE HONOURABLE MR JUSTICE LANGSTAFF

1. This is an appeal against a decision of an Employment Tribunal, sitting at Exeter, whose reasons were delivered on 4 August 2006. In its decision the Tribunal dismissed a claim brought by Mr Wareing that he had been unfairly dismissed by the Respondent, Stone Cladding.
2. The facts briefly were that Mr Wareing had been a site manager from 1 June 2002 until the date of his dismissal on 26 September 2005. He has been employed as a direct employee to manage the work performed on behalf of the Respondent company, but largely through subcontractors. In particularly he worked latterly on a project in Ireland. That project, so the Tribunal found, fell behind. The client of the main contractor brought in its own workforce to finish the project and the contract, under which the Respondent company were engaged, was brought to an end.
3. The Tribunal determined that this was a redundancy situation, although it was in dispute before the Employment Tribunal that this was so, and although it was raised as an add-on ground of appeal before us that the Tribunal were not entitled to reach that conclusion. But we have heard no sustained argument that the Tribunal were wrong so to do. It seems to us to be a matter of fact. Therefore we conclude that the reason for the dismissal was redundancy.
4. The question of the fairness of that decision, however, has to be considered. What the Tribunal found at paragraph 2 was this:

"In dismissing an employee, an employer is under an obligation to follow the statutory dismissal and disciplinary procedure, and in particular to write a letter to the employee, warning him that dismissal was being contemplated and inviting him to attend a meeting to discuss that before any decision is made. It appeared that there had been no such "step one" letter, as it is termed, and the Respondent conceded as much in the course of the hearing. The significance of this is that, under section 98A Employment Rights Act 1996, if an employer fails to comply with the procedure the dismissal is automatically to be regarded as unfair, unless the employer establishes that, even if he had complied with a procedure, he would still have dismissed the employee in any event."

5. The Employment Tribunal appeared there to be saying that, what would otherwise be an automatically unfair dismissal by reason of a failure to comply with the statutory procedure referred to in section 98A of the Employment Rights Act 1996 would not be so if the employer established that he would still have dismissed the employee in any event. That approach was repeated at paragraphs 11 and 13 of its decision. In the last few lines of paragraph 13 the Tribunal said this:

"We are satisfied that the Respondent has proved on the balance of probabilities that, even if it had followed a procedure, it would still have dismissed the Claimant by reason of redundancy. That is sufficient to render fair a dismissal which would otherwise have been unfair."

6. Mr Wareing has appeared by himself. So too has the Respondent company by its Director Mr Leason. Both accepted, Mr Leason after the statutory provisions were pointed out to him, that the approach which the Tribunal had adopted in those paragraphs was in error. It failed properly to have regard to the words of section 98A. Section 98A of the Employment Rights Act 1996 provides:

"1. An employee who is dismissed shall be regarded for the purposes of this part as unfairly dismissed if – (a) one of the procedures set out in part one of schedule 2 to the Employment Act 2002 (dismissal and disciplinary procedures) applies in relation to the dismissal, (b) the procedure has not been completed, and (c) the non-completion of the procedure is wholly or mainly attributable to failure by the employer to comply with its requirements.

2. Subject to subsection 1, failure by an employer to follow a procedure in relation to the dismissal of an employee shall not be regarded, for the purposes of section 98(4)(a), as by itself making the employer's action unreasonable if he shows that he would have decided to dismiss the employee if he had followed the procedure.

3. For the purposes of this section, any question as to the application of a procedure set out in part 1 of schedule 2 to the Employment Act 2002, completion of such a procedure or failure to comply with the requirements of such a procedure shall be determined by reference to regulations under section 31 of that Act."

Thus section 98A(1) provides that it will be automatically unfair if a procedure set out in the Employment Act 2002, which is otherwise applicable, is not complied with by reason of the fault of the employer.

7. Subsection 2 deals with a rather different question. It opens with the words "subject to subsection 1". Those words mean what they say. They mean that what follows in subsection 2 does not affect the operation of subsection 1. Thus it does not give a defence to subsection 1 as this Employment Tribunal seemed to think it did. It is directed towards a different question. This was Parliament's reversal of the decision in Polkey v Dayton Services. Where there is a procedure that is other than a statutory mandatory procedure which is not followed, a dismissal will not be regarded as unfair if the employer shows that he would have decided to dismiss the employee anyway if he had followed the procedure, which he did not do. This relates, as we see it, to procedures such as those which are contractual, or contained within the Employer's Handbook if not otherwise contractual, and may extend to procedures which are suggested by codes of practice or by ACAS, or those necessary to comply with the requirements of natural justice.
8. The full extent, however, of what is contemplated by the words "a procedure" is not in issue in these proceedings and our comments should not be taken as casting any light upon controversies elsewhere as to the full extent of those words. But what is a procedure within section 2 is distinct from the obligatory mandatory procedure which is referred to in subsection 1: that much is clear.
9. The procedures which are statutory are set out by section 29 and schedule 2 to the Employment Act 2002. Here it is common ground that step one of the standard procedure, in chapter 1 of part 1 of that schedule, was not complied with. It requires an employer to set out in writing the employee's alleged conduct or characteristics or other circumstances which lead him that is the employer, to contemplate dismissing or taking disciplinary action against the employee. It also requires the employer to send a statement, or a copy of it, to the employee and to invite the employee to attend a meeting to discuss the matter. It is plain that applies to a dismissal by reason of redundancy. It does so because the words "alleged conduct or characteristics or other circumstances" are capable of including a redundancy.
10. It is right to note that the Employment Act 2002 Dispute Resolution Regulations 2004 regulation 4(1)(b) does not make these provisions applicable to a dismissal by reason of redundancy where the dismissal is one in respect of which the duty in section 188 of the 1992 Act, which is a duty to consult representatives when proposing to dismiss as redundant a certain number of employees, applies. So it will not apply where there is a redundancy situation involving the dismissal of a number of people, but it does apply to a redundancy such as this which involved one person alone.
11. It follows, therefore, that the Tribunal wrongly thought that, if an employer showed that following the procedure would have made no difference in the event, the dismissal would not be automatically unfair. The only way we can read the statute is that automatic unfairness remained.
12. Thus this Tribunal should have concluded that Mr Wareing was unfairly dismissed by his employer, not, we hasten to add because there was no redundancy, but because the employer had simply failed to comply with the statutory procedure under the 2002 Act. A consequence of that is that compensation requires to be paid, at least in terms of the basic award to Mr Wareing. In argument both parties were referred by the Tribunal to the relevant provisions. We need not set out any more about those provisions, other than to say that, after a few moments to consider the issue, they have asked us to exercise our powers to determine the question of the compensation payable. They have agreed that the sum should be £3,201.92. Accordingly we make the order that the Respondent pays to the Appellant the sum of £3,201.92. By doing so we avoided the necessity for either party to return to the Employment Tribunal to calculate an amount of compensation which, as we have indicated, is not now in issue.
13. We thank the parties for the help they have given us; Mr Wareing through his lawyers by his Skeleton Argument identifying the issue on which he based his appeal, and Mr Leason for his patient and gentle understanding when it was pointed out to him of the true meaning of the statutory procedures, to which we have referred. Accordingly, for the reasons we have set out, this appeal is allowed with the consequences which we have identified.