UK Employment Law Update: Be Careful With Your Employment Procedures

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This OnPoint reports on two recent UK employment law decisions which remind employers of the perils of failing to comply with appropriate procedures in relation to the conduct of disciplinary, grievance and other matters.

Following appropriate procedures in the employment context is often essential – not just, for example, to avoid unfair dismissal generally but also to avoid uplifts (of up to 25 per cent) to the compensation awarded by the employment tribunal in unfair dismissal and other claims to reflect unreasonable breach of the requirements of the ACAS Code on Disciplinary and Grievance Procedures. In terms of the structure of their employment documentation, employers will often provide - explicitly and sensibly - that their disciplinary and grievance procedures are not contractual. They do this to avoid claims for contractual damages from employees in circumstances where the procedure is not followed and the employee argues that this is a breach of contract. The employee could then claim constructive dismissal and/or, in a disciplinary/dismissal case, damages for the period of time it would have taken for the employer properly to complete its disciplinary process before dismissing - which could be a significant period in relation to poor performance situations.

Two recent decisions of the Employment Appeal Tribunal ("EAT") highlight a couple of potential pitfalls for employers even where the procedures which have been adopted have been carefully drafted to ensure non-contractual status and the ensure that the applicable legislative requirements are satisfied.

In Blackburn v Aldi Stores Ltd the EAT confirmed that for any employer to fail to follow its own grievance procedure may be a breach of the implied term of trust and confidence. This can be the case even where the grievance procedure is not contractual in status. If the employer commits a breach of the implied duty to maintain trust and confidence, the employee in question will be able to claim constructive dismissal - and therefore potentially unfair dismissal - as well as being able to argue that he or she is no longer bound by any express contractual restrictive covenants.

It has been long established that an employer can constructively dismiss an employee if it does not take reasonable steps to consider a grievance complaint which any employee makes. To fail to do so is a breach of the implied duty to maintain trust and confidence. Consistent with that principle, the employment tribunal took the view in this case that, where there is no contractually binding procedure in place, the employer's duty when dealing with a grievance is to allow the employee the opportunity to bring his or her complaint, to have that complaint heard and to give reasonable consideration to it. In the employment tribunal's view, no set procedure has to be followed.

The EAT disagreed – an employer’s failure to follow its own grievance procedure is capable of amounting to or contributing to a breach of the implied term of trust and confidence. That said, the EAT made clear that whether the employer's breach is serious enough to constitute constructive dismissal will depend on the facts. Minor timing issues will not necessarily breach the employer's obligations sufficiently seriously to constitute constructive dismissal compared, for example, with a total failure to follow the prescribed process.

In St Francis Hospice v Burn, amongst other aspects of the employee's claim, the employment tribunal found that the employer acted unreasonably when it refused the employee's request to be allowed to be accompanied at a meeting with the Hospice management. This was not a disciplinary or grievance meeting to which the specific statutory right to be accompanied applied. The employment tribunal considered that the employer's decision was part of wider repudiatory breach of the implied duty to maintain trust and confidence.

The employer argued that this decision was wrong on the basis that employees' right to be accompanied to meetings is prescribed by statute and applies only to specific situations, principally disciplinary and grievance meetings. The employer therefore argued that the employee could not establish an implied entitlement to be accompanied to meetings wider in scope than the statutory right - on this basis the employer could not be in breach of contract by refusing to do more than statute requires it to do.

The EAT rejected this argument. Whilst, as in any case, the factual situation is crucial, the employment tribunal was entitled to take the approach that the question was whether a refusal of a request to be accompanied was a breach of the implied term to maintain trust and confidence in all the circumstances of this case. The employment tribunal was entitled to conclude that it was - the employee had had an extensive period of sickness absence, she was in a state of anxiety about attending a meeting unaccompanied, her GP had supported her request to be accompanied and the employment tribunal found that her concerns were genuine. The employment tribunal was therefore entitled on the facts to find the employer to have committed a breach of the implied duty to maintain trust and confidence despite the employee having no statutory right to be accompanied to the particular meeting in question.

These two decisions serve as a reminder of the need for employers to be aware of the risks of deciding not to follow their grievance and other procedures, even if they are not contractual, and to be aware that employee requests for accompaniment should not be rejected out of hand just because they go wider than the strict statutory rules.