Employment
Termination of Employment
16 April 13
Davies v Sandwell Metropolitan Borough Council [2013] EWCA Civ 135; (2013) EMPLR 022
Dismissal - final warnings
26 February 2013
Court of Appeal
Mummery, Lewison and Beatson LJJ
Employers can normally rely on a final warning to justify a dismissal for any further misconduct, without having to investigate whether the warning itself was fair. The reasons and circumstances of an earlier warning are generally only relevant to the fairness of a subsequent dismissal if it was issued in bad faith or was manifestly inappropriate.
A teacher, who was on a final written warning, was dismissed following further misconduct. She complained about the procedure leading to the final warning and argued that if the employer had considered the evidence properly, it would not have issued the warning.
A tribunal held that, in view of the final warning, the dismissal was fair.
The Court of Appeal held that a final warning may be relied on by employers when deciding whether or not to dismiss, without them having to revisit whether the warning should have been given. So long as it was not issued in bad faith or manifestly inappropriate, employers do not act unreasonably by refusing to revisit the correctness of earlier warnings.
This case confirms the EAT's decisions in Wincanton v Stone [2013] IRLR 178, and Simmonds v Milford Club.
To view the case transcript, you must subscribe to Jordans Employment Law Online (if you already subscribe click here to log in).
To request a free trial click here and select Jordans Employment Law online from the drop down menu
16 April 13
Welton v Deluxe Retail Limited UKEAT/0266/12; [2013] IRLR 166; (2013) EMPLR 015
Redundancy - continuous employment
21 November 2012
Employment Appeal Tribunal
Langstaff J
Employment is ‘continuous' throughout any week during all or part of which there is a contract of employment. That includes a contract to start employment at some date in the future. That means that where one job has ended but the employee is offered and accepts another job to start at a later date, the gap between the two jobs does not break continuous employment.
W was made redundant when the store at which he worked closed. In the following week, he was offered and accepted a job at another store in a different town. He started work at the other store in the week after that. Within a few months he resigned complaining that he had been constructively dismissed.
His employers argued that he did not have one year's continuous employment and therefore could not bring his unfair dismissal claim. The EAT held, however, that the whole of the week in which he was made redundant counted (because a week counts if any part of it is governed by a contract of employment - s 212 Employment Rights Act 1996); the whole of the following week counted because a contract of employment existed as soon as he had accepted the offer of the new job; and the following week also counted because he had started the new job.
The EAT also held that, even if there had been a gap between the two contracts, that gap did not break the period of continuous employment because a gap caused by a temporary cessation of work does not break continuity (s 212(3)). The gap does not have to be between two identical jobs for s 212(3) to apply.
This does not mean that continuous employment starts as soon as a job is offered and accepted, because s 211(1)(a) states that continuous employment starts when the employee starts work. That section was not mentioned by the EAT in this case.
To view the case transcript, you must subscribe to Jordans Employment Law Online (if you already subscribe click here to log in).
To request a free trial click here and select Jordans Employment Law online from the drop down menu
16 April 13
Simmonds v Milford Club UKEAT/0323/12; (2013) EMPLR 014
Termination of employment - final warnings
6 December 2012
Employment Appeal Tribunal
Slade J, Ms V Branney and Mr B M Warman
A final warning may be relied on by employers when dismissing for further misconduct so long as the warning was not manifestly inappropriate. This case is an example of when an earlier warning might be regarded as manifestly inappropriate.
S was given a final warning for asking his wife to deposit the club's takings while he waited outside in the car, having been unable to park.
He was then disciplined for giving staff a £15 bonus instead of a bottle of wine as instructed. Because of the earlier warning, he was dismissed.
S appealed against a tribunal's conclusion that the dismissal was fair. The EAT overturned the tribunal's decision because the tribunal had not considered whether the earlier warning was manifestly inappropriate. The case was sent back to the tribunal to consider this.
To view the case transcript, you must subscribe to Jordans Employment Law Online (if you already subscribe click here to log in).
To request a free trial click here and select Jordans Employment Law online from the drop down menu
06 February 13
Societe Generale v Geys [2012] UKSC 63; [2013] EMPLR 012
Discrimination without notice - breach of contract
19 December 2012
Supreme Court
Lord Hope, Lady Hale, Lord Wilson, Lord Sumption and Lord Carnwath
Dismissal without notice, in breach of contract, does not take effect until the employee ‘accepts' the breach; and termination under a ‘payment in lieu of notice' clause does not take effect until the employer informs the employee that it is terminating under that provision, even if payment is made earlier.
Mr Geys' bonus depended on whether his employment contract ended in 2007 or in 2008. His contract included a clause allowing his employer to dismiss with immediate effect by making a payment in lieu of notice (the ‘PILON' clause).
On 29 November 2007, he was told by letter that he was summarily dismissed. That letter did not mention the ‘PILON' clause. On 18 December, his notice pay was paid into his bank account. During December, Mr Geys discovered that the money had been paid. A letter to Mr Geys explaining that his contract had been terminated under the ‘PILON' clause was treated as reaching Mr Geys on 6 January 2008.
By a majority, the Court concluded that:
- the notification of summary dismissal on 29 November 2007 did not terminate his employment and would not have done so unless and until Mr Geys accepted the breach as terminating his employment, which he had never done. The Court acknowledged that, although the contract continued, Mr Geys could not have sued for his salary after the wrongful dismissal - he could only have sued for damages. It did not explain how that fits with the contract continuing;
- paying the money into Mr Geys' account did not activate the PILON clause: he had to be told that the bank was relying on that clause;
- therefore his contract of employment ended on 6 January 2008 and he was entitled to the higher bonus.
The minority judgment was that the summary dismissal was effective on 29 November 2007, when Mr Geys was told he was summarily dismissed.
The majority's decision relies on the rule that when a contract is fundamentally breached, the innocent party may choose either to let the contract continue despite the breach (ie affirm the contract) or may accept the breach and treat the contract as ended. So, the majority conclude, summary dismissal, being a fundamental breach, is only effective once the employee accepts it. But it is a fundamental breach because it terminates the contract without the required notice. If the majority is right and it does not in fact terminate the contract, then why is it a breach at all? Either a summary dismissal not permitted by the contract is ineffective so the employee can insist on continued payment of salary; or it is effective and the employee can only sue for damages. The majority view - that wrongful dismissal does not terminate the contract but somehow gives rise to a claim for damages not salary - seems self-contradictory.
To view the case transcript, you must subscribe to Jordans Employment Law Online (if you already subscribe click here to log in).
To request a free trial click here and select Jordans Employment Law online from the drop down menu
06 February 13
Lloyd v BCQ Ltd UKEAT/0148/12/KN and UKEAT/0239/12/KN; (2013) EMPLR 008
Termination of employment - permanent health insurance - entitlement
12 November 2012
Employment Appeal Tribunal (EAT)
Silber J, Mr D J Jenkins OBE and Mr G Lewis
The court in Aspden v Webbs Poultry suggested that, where employers have a permanent health insurance (PHI) scheme providing replacement income for employees absent because of long-term illness, there is an implied term that the employer will not dismiss the employee for ill health if, to do so, would prevent the employee from benefiting from the scheme. Subsequent cases (eg Reda v Flag Ltd) have suggested that such a term should not always be implied.
L was off sick for over three years. Medical evidence suggested there was no prospect of returning to work in the foreseeable future. He was therefore dismissed. At the time of dismissal, he was receiving replacement income under a PHI scheme, which provided benefits up to the age of 60, when occupational pension would become available. The payments stopped on termination of employment but the employers negotiated a cancellation payment from the insurers, which it passed on to L.
L's claims for disability discrimination, age discrimination and unfair dismissal failed. L also complained that the dismissal breached an implied term that he would not be dismissed so as to remove his entitlement to PHI benefit.
L's contract contained an ‘entire agreement' clause (ie a clause stating that the written terms constituted the entire agreement and there were no other terms, express or implied). There was no other evidence suggesting the employers intended to imply such a term. For those reasons, it was held there was no implied term preventing the employers from dismissing L.
In any case, since L had received the cancellation payment, he had received all his benefits under the PHI scheme. For that reason also his claim failed.
To view the case transcript, you must subscribe to Jordans Employment Law Online (if you already subscribe click here to log in).
To request a free trial click here and select Jordans Employment Law online from the drop down menu