This document summarizes recent and proposed reforms to UK unfair dismissal law. Key points include: - The qualifying period for unfair dismissal claims will increase to 2 years for employees hired after April 2012. - Compensation awards will be capped at £74,200 or one year's salary. - Fees of £250-£950 will be introduced for unfair dismissal claims from Summer 2013. - From 2014, employees must contact ACAS to attempt conciliation before filing a tribunal claim. - New "employee owner contracts" may allow employers to offer shares worth £2,000-£50,000 in exchange for employees giving up most unfair dismissal rights. - Protected settlement discussions will be renamed but

1. UNFAIR DISMISSAL
MOVING THE GOALPOSTS?
Mary Siddall, Solicitor

2. Contents
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Proposed reforms
Legal representation at internal hearings
Effect of prior warnings
Political affiliation dismissals
Cases on redundancy selection

3. Reforms to Unfair Dismissal
• Qualifying period: 2 years continuous service
if employment commenced on or after 6 April
2012
• Cap on compensatory award: £74,200 OR one
year’s salary (whichever is lower): from
Summer 2013
• In practice most awards are for less than a
year’s salary and for a much lower average
figure of around £4500 (2012 statistics)

4. Introduction of Fees for Unfair
Dismissal Claims
• Level 2 claim
• Issue Fee: £250 and Hearing fee: £950
• Fee remission for those on low incomes on
same basis as with civil courts
• Tribunals will be able to direct that fee is
reimbursed by employer if employee is
successful
• From Summer 2013

5. Pre-claim Conciliation
• From 2014, employees will be obliged to
contact ACAS before lodging a claim – using a
simple form
• Time limit will be extended until one month
after end of conciliation period
• ACAS will contact employer but only with
Claimant’s consent – no obligation
• Claim can’t proceed unless ACAS have issued
an early conciliation certificate

6. Employee Owner Contracts
• Under old legislation an employee could opt out
of unfair dismissal and redundancy rights in a
fixed term contract. These provisions were
abolished in 2002.
• New proposal would allow employer to offer new
recruits an ‘employee owner’ contract where
they give up unfair dismissal rights in return for
shares in the company to a value of £2-50,000
• Commencement September 2013?

7. Features of Employee Owner Contracts
• Tax incentive: no CGT on gain in shares
• Rights that will not apply: unfair dismissal,
redundancy payments, right to request
flexible working or time off for training,
increased notice obligations around return
from maternity leave
• Rights to claim automatic unfair dismissal
retained (e.g. pregnancy, whistleblowing)

8. What will the take up be?
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Women and those with caring responsibilities
New business start-ups?
Larger companies
Contracts can be offered on a ‘take it or leave
it’ basis
• Difficult situations: TUPE? Exchange of shares?

9. Protected Conversations
• Compromise agreements to be renamed
settlement agreements
• Discussions around termination of
employment may not be referred to in unfair
dismissal proceedings
• Will not apply to cases of automatic unfair
dismissal; nor where discrimination or
‘improper behaviour’

10. ACAS Draft Code
• Recommendations include:
– Proposal should be put in writing
– Employees to have a minimum of 7 days to
consider offer
– Right to be accompanied at meetings to discuss a
settlement offer
– ‘Improper behaviour’ would include intimidation
and reducing the offer within the 7 day period

11. Effect of Warnings in Misconduct
Dismissals
• Expired warning should not be used to justify a
dismissal: Diosynth Ltd v Thomson [2006] IRLR
284
• Where conduct in question amounts to gross
misconduct, the existence of a similar expired
warning can be used to decide on sanction:
Airbus UK Ltd v Webb [2008] EWCA Civ 49
• (In Diosynth employee would not have been
dismissed but for the expired warning – ‘totting
up’)

12. Effect of Final Written Warning
• Tribunal’s ability to look into an employer’s
decision to issue a final written warning is
limited
• FWW must have been issued in good faith,
there must be prima facie grounds for
imposing it and it was not ‘manifestly
inappropriate’ to use it
• Davies v Sandwell Metropolitan Borough
Council (CA)

13. Res Judicata does not apply to Internal
Procedure
• Employer was not wrong to re-open a
disciplinary process and dismiss employees
after an earlier process had resulted only in a
written warning
• Res judicata doctrine did not apply
• Christou and Anor v London Borough of
Haringey (CA)

14. BORR Test
• Did the application of the ‘band of reasonable
responses’ test to whether a dismissal was fair
infringe Article 8 right to respect for private
and family life?
• No said the CA in Turner v East Midlands
Trains Ltd [2013] IRLR 107 (appeal sought)
• BORR provided an objective assessment of the
employee’s behaviour and did not infringe Art
8

15. Legal Representation at Disciplinary
Hearings?
• This may be an entitlement where the internal
proceedings will in themselves determine the
right to continue with a chosen profession –
see Kulkarni v S/State for Health 2010 ICR
101
• If the internal proceedings are likely to have a
substantial influence on the regulatory body,
representation may be required by Article 6 –
R v Governors of X School 2011 UKSC 30

16. Redundancy Dismissals
• To what extent should a tribunal interfere with
the selection process used by an employer in a
redundancy situation?
• Employer must apply its mind to the question
• Range of reasonable responses test applies to
selection of the pool – but the ET has a role in
establishing that the process has been
genuine – Capita Hartshead Ltd v Byard
UKEAT 044/11

17. Redundancy Selection
• ‘Pool of one’ cases
• These present problems where there has been
no proper consideration to whether the pool
should be wider
• Again, the selection of a pool of one should be
considered within the RORR test
• See Wrexham Golf Club v Ingham UKEAT
0190/12

18. Scrutiny of Selection Process
• Close scrutiny of the scoring process by ET was
wrong once improper motivation had been
rejected
• Was the scoring process reasonable?
• Element of subjectivity permitted
• Nicholls v Rockwell Automation Ltd UKEAT
0540/11

19. Dismissal and Re-application
• Ralph Martindale & Co v Harris UKEAT 1066/07 –
Employer does owe a duty of care during reselection process
• Morgan v Welsh Rugby Union [2011] IRLR 376
• Samsung Electronics (UK) Ltd v Monte d’Cruz
UKEAT 0039/11 – an element of subjectivity was
inevitable during a selection process
• But note that the additional element of a
‘competence bar’ was held unfair in Steel v
Cumbria NHS Trust UKEAT 0635/11

20. Dismissal on Grounds of Political Belief
• Redfearn v United Kingdom [2013] IRLR 51
• Claim that dismissal of a BNP councillor infringed
Article 10 and 11 rights to freedom of expression
and freedom of assembly
• Upheld by European Court of Human Rights –
‘gap’ in protection under UK law
• Automatically unfair dismissal if the reason is the
employee’s ‘political opinions or affiliation’
(Enterprise and Regulatory Reform bill)