Be Aware – December 2022
It has long been held in Employment Law that a successful appeal against a dismissal by an employee can lead to the dismissal ‘vanishing’. In such circumstances, an unfair dismissal claim will not succeed. In re-examining this area of law last week, the Employment Appeal Tribunal (EAT) held on the facts of the case that where an employee had successfully appealed against a dismissal for gross misconduct and was re-instated, the original dismissal vanished and the unfair dismissal claim failed, notwithstanding the fact that she had indicated during the appeal process that she did not wish to return to work.
Marangakis v Iceland Foods Limited
The employee was summarily dismissed for gross misconduct. She appealed saying that she wished to be re-instated. She attended the original appeal hearing which was then postponed so that further investigations could take place. After that stage in the appeal, she then changed her mind and said that she no longer wished to be reinstated and believed mutual trust and confidence had broken down. At a reconvened appeal hearing she again reiterated she did not want to work for the company. The conclusion of the appeal was that the employer upheld the appeal and offered to re-instate the employee on a final written warning with continuity of service and all back-pay. Because she had changed her mind and said that she did not want to be reinstated the employee did not return to work and she was eventually dismissed after further procedures, some months down the line, for failure to attend. She went on to bring an unfair dismissal claim which the employer defended on the basis that the original dismissal ‘vanished’.
The Judgment / Comment
The EAT said the dismissal had ‘vanished’ and her claim failed. The Judgment is good news for employers. It effectively says that where the appeal procedures have been engaged (and it made no distinction here between contractual and non-contractual procedures) if the appeal then succeeded, the employee will be treated as having never been dismissed (particularly on the facts here of course where they were reinstated with continuity and back-pay).
The EAT said it was a matter of contractual assessment that did not turn on the subjective reasoning of the employee. The EAT held that for this not to apply, an employee needed to be absolutely clear and unequivocal that they were withdrawing from the appeal, e.g. the employee could (but didn’t here) have said ‘I withdraw my appeal’. Simply saying that she did not want to be reinstated was not enough, because there may have been other reasons for pursuing the appeal.
This case is a useful reminder that, where an employer is concerned that the original dismissal was indeed unfair or problematic for some other reason, a robust appeal procedure can rectify the error and minimise litigation risk in the Tribunal.
“Is it a legal requirement to require employees to sign an acknowledgement that they have read and understood the HR policies that apply to them? If so, is an electronic signature from the employee sufficient?”
Under Section 1(1) Employment Rights Acts 1996 an employer is required to give a worker a written statement of the particulars of employment listed in Sections 1(3) and (4).
In the case of particulars relating to sick leave and pay, other paid leave, pension rights and training, the statement may refer to another document which is reasonably accessible to the worker. Such information will often be provided in the form of one or more policies.
It is common practice, although not a legal requirement to ask the worker to sign a form acknowledging that they have received the statement of written particulars. Acknowledging receipt in this way does not turn the statement into a binding written contract.
There is no requirement that an employment contract be signed, as:
- there is no statutory requirement to this effect, and
- contractually (under the law of England and Wales) express terms may be written or oral, and a written contract can be effective even if it is not signed.
A signed contract is advisable, however, in case there is disagreement about what terms were agreed.
Aside from the requirement to provide a written statement of particulars (some of which may be provided in policy form), there is no obligation on the employer to provide HR policies. It follows that there is no legal requirement to require the employee to sign a form acknowledging receipt of those policies.
It is, however, prudent to ask employees to formally acknowledge receipt of the employer’s employment-related policies, to minimise the risk that they subsequently claim that those policies were not brought to their attention.
Since there is no requirement for a worker to sign an acknowledgment of receipt of applicable employment-related policies, there is nothing to prevent the use of electronic signatures. Such a signature will act as evidence (although not necessarily conclusive evidence) before a court or tribunal that the person signing has acknowledged the relevant policies.
“I have an employee whose attitude and performance is poor. Rather than taking the employee through a capability procedure, can I explore with the employee whether he/she would be open to mutually agreed termination by agreeing a settlement package with them? Is it safe for me to initiate settlement discussions with the employee in this instance?
Section 111A of the Employment Rights Act 1996 provides that any evidence of pre-termination negotiations is inadmissible as evidence before a Tribunal in any unfair dismissal claim. These discussions are often described as ‘protected conversations’.
For example, you may offer a settlement agreement to an employee who has been the subject of previous disciplinary proceedings and whose behaviour has not improved. When the employee receives the offer he/she may immediately resign and seek to claim unfair constructive dismissal on the basis that the offer breached the implied term of mutual trust and confidence. If S111A applies the employee will not be able to refer to the discussion in which the offer was made before the Tribunal.
S111A protection only applies where the employee is complaining of ‘ordinary’ unfair dismissal. The protection of S111A does not apply to claims for automatic unfair dismissal e.g. where an employee alleges that dismissal occurred for a reason relating to their pregnancy or trade union membership. In addition, there is no S111A protection for any other claim e.g. breach of contract or discrimination.
ACAS have published a helpful guide on settlement agreements including template letters that can be used to initiate settlement discussions under S111A:
The protection in S111A will not apply to its full extent where there is some improper behaviour on the part of the employer or the employee in relation to the settlement negotiations. This includes harassment, bullying and intimidation, including the use of offensive words or aggressive behaviour, criminal behaviour e.g. threat of physical assault, victimisation, discrimination and putting undue pressure on a party (e.g. not giving an employee a reasonable period of time to consider any proposed settlement offer, an employer saying before any form of disciplinary process has commenced that the employee will be dismissed if he/she rejects a settlement proposal, or an employee threatening to undermine an organisation’s public reputation if it does not sign a settlement agreement unless it is a whistleblowing case).
S111A supplements the ‘without prejudice’ rule which by contrast covers any type of claim and which provides that any discussion between an employee and employee entered into on a ‘without prejudice’ basis to settle an existing employment dispute cannot be disclosed in any subsequent legal proceedings.
What is a payment in lieu of notice?
“Unfortunately I am having to consider a number of redundancies. If I terminate an employee (or they resign) and I want to make a payment in lieu of notice instead of them working their notice period, do I still record their last working day as the date at the end of the one-month notice period?”
No, it is a bit of a common myth that the effective date of termination (i.e. last working day with the company) still falls at the end of what would have been the notice period where a payment in lieu of notice (PILON) is made.
A PILON is effectively “instead of” the employee working their notice period. This means therefore that you are cutting all employment ties with them on their last working day and whatever their notice period is (be it through dismissal or resignation), it is paid as a lump sum payment in their final salary.
Put in practice therefore if an employee resigns on 1st May 2016, they have a one month notice period and therefore if they were required to work their notice their effective day of termination and last working day would be 31st May 2016. Both parties agree it is not in either of their interests for the employee to work and therefore as there is provision for a PILON in the employee’s contract, the employee will stop working on 1st May itself. The one month’s salary is still payable and is paid in the company’s May payroll however, the employee’s effective date of termination is 1st May 2016 because the PILON acts to remove what would have been the notice period.
It can also work part way through a notice period. Therefore, if an employee had served notice to resign on 1st May but the employer only needed them for a couple of weeks they could, for example, stop working on say Friday 13thMay and the remainder of their notice period i.e. 2.5 weeks approximately, would be the PILON. In this scenario therefore the effective date of termination would be Friday 13th May because it is the last day, they are physically attending work and the remaining notice is paid instead of it being worked.
NB this is not the same scenario where an employee is placed on garden leave. Garden leaves seeks to continue the contract of employment albeit the employee is effectively suspended from their duties and stays at home for the duration of their notice period.
If in doubt when seeking to exercise a PILON clause, please contact the MILS employment team.
Don’t forget, this advice is general in nature and will need to be tailored to any one particular situation. As an RMI member you have access to the RMI Legal advice line, as well as a number of industry experts for your assistance. Should you find yourself in the situation above, contact us in 01788 225 908 at any stage for advice and assistance as appropriate.