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EVERYDAY LAW: The right to terminate

Cecil McCarthy

EVERYDAY LAW: The right to terminate

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In Malloch v Aberdeen 1971, Lord Reid said: “At common law a master is not bound to hear his servant before he dismisses him. He can act unreasonably or capriciously if he so chooses but the dismissal is valid. The servant has no remedy unless the dismissal is in breach of contract and then the servant’s only remedy is damages for breach of contract.”

Therefore, whether an employee could get damages depended not on whether he was treated fairly by his employer or whether the employer had good reason to dismiss him. Instead, it was based on whether the employer had breached the contract.

At common law, in most cases observing the contract meant that the employee was given the notice to which he was entitled under the contract.

One of the fundamental changes introduced by the Employment Rights Act 2012 is that the employer is now required to show a fair reason for the dismissal.

The effect of the new law is that a dismissed employee can now challenge his employer’s action in respect of his termination on the ground that it is unreasonable.

The dismissal must not only be for a fair reason but, very significantly, the act requires that there be a fair procedure as well. The requirements of substantive fairness are set out in Section 29 (1) to (4).

The employer is required to show one of the potentially fair reasons such as capability, conduct and redundancy. However, having established a fair reason for dismissal, the employer must also meet the procedural requirements of Section 29(5) which reads:

“Notwithstanding subsection (1), an employer is not entitled to dismiss an employee for any reason related to

(a) the capability of the employee to perform any work; or

(b) the conduct of the employee;

without informing the employee of the accusation against him and giving him an opportunity to state his case, subject to the Standard Disciplinary Procedures and the Modified Disciplinary Procedures set out in Parts B and C, respectively of the Fourth Schedule.”

In Alexander vs Bridgen Enterprises Ltd (2006), the UK Employment Appeals Tribunal considered similar English legislation, the effect of which is set out in paragraph 21 of the judgment as follows:

“Step 1: statement of grounds for action and invitation to meeting

1.(1) The employer must set out in writing the employee’s alleged conduct or characteristics, or other circumstances, which lead him to contemplate dismissing or taking disciplinary action against the employee.

(2) The employer must send the statement or a copy of it to the employee and invite the employee to attend a meeting to discuss the matter.

Step 2: meeting

2.  (1) The meeting must take place before action is taken, except in the case where the disciplinary action consists of suspension.

(2) The meeting must not take place unless

(a) the employer has informed the employee what the basis was for, including in the statement under paragraph 1(1), the ground or grounds given in it, and

(b) the employee has had a reasonable opportunity to consider his response to that information.

Step 3: appeal

3. (1) If the employee does wish to appeal, he must inform the employer.

(2) If the employee informs the employer of his wish to appeal, the employer must invite him to attend a further meeting.

(3) The employee must take all reasonable steps to attend the meeting.

(4) The appeal meeting need not take place before the dismissal or disciplinary action takes effect.

(5) After the appeal meeting, the employer must inform the employee of his final decision.”

Our provisions are the same except that in the case of suspension on less than full pay, the meeting must take place before action is taken.  Our legislation also requires that an employee be informed by the employer of his right to have a friend or a shop steward, if he is a member of a trade union, present during the proceedings.

• Cecil McCarthy is a Queen’s Counsel. Send your letters to Everyday Law, Nation House, Fontabelle, St Michael. Send your email to [email protected]