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EVERYDAY LAW: Unfair dismissal under new act

Cecil McCarthy

EVERYDAY LAW: Unfair dismissal under new act

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Unfair dismissal is a statutory concept. In the Employment Rights Act 2012, the main provisions relating to unfair dismissal are found in Sections 26 to 37.
Wrongful dismissal, which is a common law concept, is based on whether the employer has complied with the relevant notice provisions, expressed or implied, in the contract of employment. Even where the employer has not complied with the notice provisions, dismissal is effective in bringing an end to the contract and the employee is usually compensated by reference to what he would have been paid if the notice provisions were followed.
To prove unfair dismissal under the statute, several things must be established. These are as follows:
(1) The person claiming unfair dismissal must be an employee.
(2) Ordinarily, an employee must have been employed continuously for the period of one year before a complaint of unfair dismissal can be made.
(3) Even if the employee satisfies (1) and (2) above, the employee may be within the class of employees excluded from protection by the statute.
(4) The employee must establish that he was dismissed.
(5) The employer must demonstrate that he has a fair reason for the dismissal as defined in the act.
(6) Having given a “fair” reason for the dismissal, it must be determined whether the employer acted “reasonably or unreasonably” in treating it as a sufficient reason for dismissing the employee.
The act contains the following definition of employee:
“employee” means an individual who has entered into or works under, or where the employment has ended, worked under, a contract of employment.
The act also sets out, in the First Schedule, the factors that must be considered in determining whether a contract of employment exists. That schedule provides: 
“In determining whether a contract of employment exists, consideration shall be given to whether:
(a) there is an obligation on the part of the employee to give personal and exclusive service
(b) the work is done according to the instructions of the employer, and the manner in which the work is carried out is subject to the control and direction of the employer;
(c) the work has continuity, and such continuity creates for the employee an economic dependence upon the employer, without there being any financial risk to the employee;
(d) the work is carried out within fixed hours or at a workplace or workplaces specified or agreed by the employer;
(e) the work involves the integration of the employee in the organization of the business, including his subjection to its policies;
(f) the employee is subject to the procedures of the business for addressing grievances and disciplinary matters;
(g) the employee is in receipt of periodic remuneration payable on a stipulated basis, for example, at hourly, weekly or monthly intervals, and all such payments are subject to statutory deductions;
(h) the employee is entitled to holidays with pay; and
(i) the employee makes no, or only nominal, investment in tools and equipment.”
The act then makes it clear that the above factors are not exhaustive and that they are all elements in a balancing exercise to determine the nature of the contract. It is ultimately for the Tribunal to determine what weight to give to each factor, and to determine whether a worker is an employee or an independent contractor using the above tests and presumably, the traditional tests used by the courts in determining this issue.
Once it is established that the person dismissed is an employee, then consideration must be given to the other requirements for unfair dismissal.
• Cecil McCarthy is a Queen’s Counsel.