Effective Date of Termination

[Thanks to Angharad Davies of Dere Street Barristers for preparing this case summary]

Is a tribunal entitled to take into account an otherwise unsuccessful internal appeal that purports to change the effective date of termination (EDT)?

Yes,says the EAT in Hawes & Curtis v Arfan & Mirza.

This was a decision arising out of the Claimants being summarily dismissed on 5 October 2010. They appealed under the internal disciplinary procedure. The dismissal was upheld but they were told, by letter, that their EDT would be the date of the appeal decision (4 November 2010). They were paid until this date. The tribunal held that the EDT was 4 November.

Claim forms were lodged citing the EDT as 4 November, this was challenged by the Respondent. By a majority decision the tribunal held that the EDT was 4 November. The Respondent appealed, arguing that the EDT for the purposes of s 97(1) ERA 1996 is to be determined objectively and crystallised at the date when the summary dismissal is communicated. It cannot be varied by appeal. The Claimant placed reliance on the decision of Gisda Cyf v Barratt [2010] ICR 1475 in arguing the variation of the employer's decision at appeal was determinative.

The EAT dismissed the appeal: the tribunal found that this was a relatively rare case where the Respondent intended to change, and did change, the EDT. Nonetheless, the starting point in a dismissal without notice is the 'date on which the termination took effect'. The provision of an internal appeal is integral to the protection of employment rights which underlies the purpose of s 97(1) and can be considered if relevant to proceedings.

Can Employers Re-discipline for the Same Offence?

Can an employer put an employee through a second disciplinary procedure, for the same offence, on the grounds that the original disciplinary procedure didn't impose a serious enough sanction?

Yes, in exceptional circumstances, says the Employment Appeal Tribunal in Christou & Ward v Haringey, a case stemming from the death of Baby P in 2007.

Ms Ward was the social worker responsible for Baby P. Ms Christou was her supervisor, whom Sharon Shoesmith promised would not lose her job over the death of Baby P. Both employees were put through Haringey's 'Simplified Disciplinary Procedure'. The maximum penalty under the Simplified Disciplinary Procedure was a written warning, which they both duly received.

Subsequently, after the media storm, the OFSTED inspection and the sacking of Sharon Shoesmith, the new regime at Haringey commenced a second set of disciplinary proceedings against them arising out of the same facts. They were dismissed. They argued that it was legally impermissible, or simply unfair, to dismiss based upon a disciplinary offence for which they had already been sanctioned.

The EAT (Slade J presiding) upheld the majority decision of the employment tribunal that the dismissals were not unfair. It held there was no concept of 'double jeopardy' or 'res judicata' in internal disciplinary proceedings. It held that whilst it would be unusual for a second set of disciplinary proceedings to follow a first set arising out of the same facts, this was a 'rare' case and the tribunal was entitled to hold that the employer's actions were fair in the light of the media spotlight and the new management regime which took a different view of the seriousness of the employees' conduct (see para 112).

PILONs, Notice Pay and After-Discovered Conduct

[Thanks to Catriona Stirling of Cloisters for preparing this case summary]

Is an employer entitled to withhold a payment in lieu of notice if it dismisses an employee under an express term in his service agreement which provides for summary termination with pay in lieu, but later discovers that the employee had committed gross misconduct prior to the dismissal?

No, says the Court of Appeal in Cavanagh v William Evans Ltd.

The company decided that Mr Cavenagh was redundant and summarily terminated his service agreement, which provided for six months of pay in lieu of notice. It subsequently discovered that Mr Cavenagh was guilty of gross misconduct pre-termination and did not make the payment. Had it known about the gross misconduct when it exercised its contractual power, it would have accepted the repudiatory breach of the service agreement and regarded itself as discharged from liability for pay in lieu of notice.

The Court of Appeal held that Mr Cavanagh had acquired an accrued right to the payment, as his contract had been summarily terminated under the relevant contractual provision. There was no provision in the service agreement denying him the right to the payment in lieu if the company subsequently discovered that he had committed a prior act of gross misconduct. Nor was there any general principle of contract law barring or extinguishing his right to recover the pay in lieu as a debt from the company. The principle that a claim for wrongful dismissal could be defeated by relying on evidence of misconduct discovered after the dismissal did not provide the company with a defence to a debt claim.

Dismissal Hearings and Article 6

[Thanks to Naomi Cunningham of Outer Temple Chambers for preparing this case summary]

Is Article 6 engaged when an NHS employer dismisses a consultant for misconduct?

No, says the Court of Appeal in Mattu v University Hospitals of Coventry and Warwickshire NHS Trust. All three judges held that a decision to dismiss is not a determination of the employee's civil rights, but the exercise of a contractual power. Dr Mattu argued that dismissal by the Trust made him unemployable in the NHS, effectively determining his right to practice his profession, but that was rejected both at first instance and on appeal as not made out on the evidence. Burnton and Elias LJJ went further, doubting Smith LJ's obiter suggestion in Kulkarni v Milton Keynes Hospital NHS Foundation Trust [2010] EWCA Civ 69 that Article 6 might be engaged where an NHS doctor faces charges so serious that, if they are found proved, he will effectively be barred from employment in the NHS. Sedley LJ expressly distanced himself from those doubts.

The Court of Appeal also considered and rejected contentions that the Trust had incorrectly classified the allegations against Dr Mattu as not being of professional misconduct; and that a refusal to adjourn the disciplinary hearing had been a breach of an implied contractual obligation of fairness.

Addendum: Enterprise and Regulatory Reform Bill

I've just had a helpful phone call from Rowena Robson at the Department of Business, Innovation and Skills, who has asked me to circulate this information in connection with the proposed cap on the unfair dismissal compensatory award.

She tells me that DBIS is working from a median average earnings figure of £26,000. That means (if the power is exercised) that the compensatory award will be capped at somewhere between £26,000 (one year's earnings) and £78,000 (three years' earnings). This is somewhat higher than the median earnings figure sourced from Wikipedia, below.

Daniel Barnett

Enterprise and Regulatory Reform Bill

The Enterprise and Regulatory Reform Bill has, this afternoon, been laid before parliament.

Quite separate from the Adrian Beecroft proposals which have been in the news this week, this new Bill provides for:-

• a mandatory period of Acas conciliation before instituting tribunal proceedings (with heavy reliance on as yet unpublished detail by way of Regulations)
• extension of limitation periods to allow for pre-issue Acas conciliation
• introduction of 'legal officers' to make decisions in certain cases if all parties agree in writing
• EAT cases to be heard by a judge alone, unless ordered otherwise
• power for Secretary of State to limit unfair dismissal compensatory award to a maximum between the national median earnings and 3 x median earnings. [According to Wikipedia, median earnings in 2010 were £20,800, which gives a power to impose a cap of between £20,800 and £62,400]
• alternatively, power for the Secretary of State to limit unfair dismissal compensatory award to one year's earnings
• power for a tribunal to impose a penalty on employers of 50% of any financial award, subject to a minimum of £100 and maximum of £5,000, where there are "aggravating features" (not defined), with a 50% discount for payment within 21 days
• defintion of 'qualifying disclosure' in whistleblowing legislation to be restricted to disclosures "in the public interest" (not defined)
• 'compromise agreements' to be renamed 'settlement agreements'

The Bill is here (see sections 7-17, and Schedule 2)

Daniel Barnett