Wednesday, May 30, 2012

What You Don't Know Might Hurt You

The Court of Appeal has held that a County Court Judge was wrong to find that an employer was entitled to withhold a payment in lieu of notice from an employee who it discovered after his dismissal had been guilty of a financial irregularity.

Mr Cavenagh was made redundant by William Evans Limited. His employment was terminated with immediate effect on the basis that he would receive a payment in lieu of his contractual notice entitlement.

His contract entitled his employer to terminate his employment without notice by paying him in lieu.

After he had left but before the payment in lieu of notice was made William Evans discovered that he had transferred £10,000 of their money into his pension pot without authority.

They withheld his PILON (£65,000) on the basis that his actions were gross misconduct and had they known about them before his dismissal they would have been entitled to dismiss him without notice and avoid having to make him the payment.

He sued and they counterclaimed for the return of the £10,000.

At Southampton County Court the company won. The Judge found that the company could rely on the famous old case of Boston Deep Sea Fishing which said that in a claim for wrongful dismissal case an employer was entitled to justify the dismissal based on information which they discovered after the date of dismissal.

The Court of Appeal disagreed. Where there is an express clause providing for payment in lieu of notice the sum becomes payable as a debt immediately upon dismissal. There was therefore no scope for the application of the Boston Deep Sea Fishing principle. As such Mr Cavenagh was entitled to his money, less the £10,000 which had gone into his pension fund without authority.

The case leads to what some might consider to be the perverse result that the company would have been better off not having a PILON clause and simply wrongly dismissing Mr Cavenagh without notice. He would then not have been entitled to the money as a debt and would have been unable to prove loss because he would have fallen foul of Boston Deep Sea Fishing 

Whilst there are advantages of a PILON clause in terms of being able to end someone's employment straight away (although if the concern is to get a disgruntled employee out of the business this can potentially be dealt with through a garden leave clause) the other advantage of not having one is that the employee has to mitigate his loss rather by trying to get another job and reduce the amount he is entitled to, as opposed to being immediately entitled to full payment as a debt.

Any business contemplating "pulling the trigger" should of course take full advice as to the pros and cons of any particular course of action.

Monday, May 28, 2012

Double Jeopardy in Unfair Dismissal Case may not be Unfair

The Employment Appeal Tribunal has held that an Employment Tribunal was entitled to find that 2 Social Workers dismissed in connection with the "Baby P" case were fairly dismissed.

Mrs Christou and Ms Ward worked for Haringey Social Services. Following the murder of "Baby P" they were disciplined over their failings in respect of his protection. This was under a "Simplified Disciplinary Procedure" which did not permit the employer to dismiss them and provided no right of appeal.

Following the controversial (and, it was ultimately determined, unlawful) dismissal of Sharon Shoosmith, the Director of Social Services, Ms Shoosmith's replacement reopened the case as it was considered that the disciplinary sanctions had not been adequate.

Both Claimants were ultimately dismissed for gross misconduct. This was despite the fact that no new facts or information had come to light since the original disciplinary proceedings.

The Employment Tribunal rejected their unfair dismissal claims, finding (amongst other things - the Claimants raised various other arguments as to why their dismissals were unfair) that the Council acted reasonably in reopening the cases.

The EAT agreed. They held that the legal principles of res judicata and issue estoppel, which mean that the same case cannot be litigated twice, does not apply to internal disciplinary proceedings in the same way that it would do to a case in Court or before a professional body. The issue was therefore simply whether a reasonable employer in the circumstances of this particular case could have re-opened the matter. The Employment Tribunal had been entitled to find that given the public protection angle and the seriousness of the allegations a reasonable employer could do so.

This should not be taken as giving employers carte blanche to change their minds. It is expressly stated that the circumstances where this will be reasonable will be "extremely rare." The best advice is always to carry out a full investigation and make an appropriate decision at the first attempt. 

Thursday, May 03, 2012

Fiorentina Sack Coach For Hitting Player!

It has today been reported that Fiorentina coach Delio Rossi has been sacked by the Italian Serie A Club after he physically attacked one of his own players.

Adem Ljajic had apparently reacted sarcastically to being substituted prompting his Manager to wade into him.

Fiorentina acted swiftly in dispensing with the services of Signor Rossi and said that they would take suitable action against Ljajic.

In England and Wales, conduct is of course one of the potentially fair reasons for which an employer can dismiss an employee. Using violence towards a fellow employee would usually justify dismissal without notice for gross misconduct.

However it would be unwise, and could lead to claims for Unfair Dismissal, if the situation is not handled properly. It is never advisable to dismiss someone on the spot. The employee (and if there is any doubt as to whether it was an assault or a fight both/all employees) should generally be suspended and a full investigation undertaken.

Once the facts are clearer any employees at fault should be asked to attend a disciplinary hearing and shown the evidence against them before a decision is made.

Even where the facts seem obvious any mitigation such as provocation, external circumstances like illness which might have lead to an over-reaction and a previous clean disciplinary record would have to be considered. Consistency of treatment is also important - if 2 people are engaged in a fight then it is usually going to be unfair if one is dismissed and the other is not.

Employment Tribunals take a particularly dim view of violence or fighting in circumstances where this creates a health and safety risk (e.g. in the presence of heavy machinery) or where it is an attack by a subordinate on a manager.

Incidentally gross insubordination might also be grounds for dismissal for gross misconduct although whether Ljajic's sarcastic clapping would be regarded by an Employment Tribunal in this country as serious enough to make dismissal "within the range of reasonable responses" for a first offence (if this is indeed what it was) is questionable.