Tue, 01 Jul 2014
Wrongful dismissal, unfair dismissal, or both; that is the question posed by Charles Crow and Alexander Mellis
It is trite to say that when dismissed summarily for gross misconduct (i.e. without notice) an employee has the option of bringing a claim for unfair dismissal or wrongful dismissal (breach of contract). It is equally trite law that an Employment Tribunal has two different tests to apply in approaching wrongful and unfair dismissal. For the latter the Tribunal must consider whether the employer’s decision to dismiss was within the reasonable range of responses. The warnings to Tribunals against substituting its view for that of the employer are well known and oft repeated. However, when approaching a wrongful dismissal claim the Tribunal must do exactly that; deciding for itself whether the employee has in fact done the acts which the employer alleges have put the employee in fundamental breach of the contract. The distinction between these two causes of action raises several strategic issues for both Claimant and Respondent lawyers.
Not only are the tests for these two types of claims distinct (see by way of example the contrasting results for the two bases of claim in the case of Enable Care and Home Support Ltd v Pearson, UKEAT 0366/09), they give rise to different considerations as to what evidence is relevant and required.
For instance, where the gross misconduct relied upon by an employer arises from instances of sexual harassment or bullying, a crucial part of the case for dismissing will, of course, be the evidence of the alleged victim. An employer has no need to call the alleged victim in support of their decision to dismiss when defending the unfair dismissal claim. However, an employer has a potential evidential conundrum in defending a wrongful dismissal claim. On the one hand, if they do not call the alleged victim the tribunal may have no direct evidence of the alleged gross misconduct and may be unwilling to find the employer has proven that the employee was in fundamental breach. On the other hand the employer has a duty of care towards the victim if they are still employed and must consider whether or not calling the victim could cause further issues such as stress and anxiety related health problems.
Another important evidential difference, which stems from the different tests, relates to matters which arise subsequent to the dismissal. Boston Deep See Fishing and Ice Company v Ansell (1888) 39 Ch D 339 establishes that where an employee did not commit the act of gross misconduct and was therefore prima facie wrongfully dismissed, the employer is nonetheless entitled to rely upon a fundamental breach not known of (or simply not relied upon) at the time of dismissal in order to defeat the wrongful dismissal claim. The employer would not be entitled to rely upon such conduct to defeat a claim of unfair dismissal.
Employees who wish to ‘prove their innocence’ will be deprived of the opportunity within the confines of an unfair dismissal case (the Tribunal being willing only to scrutinise the employer’s decision); but they will at least have their chance on the wrongful dismissal aspect, and will be entitled to call any evidence (whether it was before the decision-makers or not) in order to counter the suggestion that they were in fundamental breach.
The different nature of the tests allows a finding that a dismissal was fair but nonetheless wrongful or vice versa. Despite the different test applied and different basis in awarding damages, a finding of wrongful dismissal (without more) may be useful to an employee who can say to prospective employers that a Tribunal found they did not commit the act of gross misconduct, especially if they are seeking to remain in the same industry. In ‘marginal’ unfair dismissal cases, where the Tribunal might be persuaded to disagree with the decision to dismiss, but to the extent that it finds the decision was outwith the range of reasonable responses; the addition of a wrongful dismissal claim allows the Tribunal to form its own view of what actually happened.
Conversely, there could be findings of procedural unfairness in the dismissal (such as to give rise to a finding of unfair dismissal) but a finding, within the wrongful dismissal case, that the employee in fact did commit that act of gross misconduct (such that the wrongful dismissal claim fails). On such a finding the Claimant is likely to face serious difficulties when it falls to the Tribunal to answer the Polkey and Contributory Fault questions. It is difficult to imagine that a Tribunal wouldn’t then find a significant chance that the employee would have been dismissed in any event, and/or was an author of their own misfortune, and reduce the amount awarded accordingly.
Where an employer has successfully replied upon an act of misconduct unknown at the time of dismissal to defeat the wrongful dismissal claim, then it is then open to the Tribunal to find that the employee would have been dismissed at some point in the future and reduce or extinguish the award accordingly.
The differences between claims for Unfair and Wrongful dismissal give rise to many more considerations than which claim would get the best level of damages. Different evidential matters arise as a result and the findings in each cannot be considered in a vacuum. Both Claimants and Respondents should consider carefully the practical benefits and difficulties which arise from the two types of claims.
Please click here to view Charles Crow's profile. Alexander Mellis is currently a pupil at No5 Chambers.