British labour law
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British labour law is that body of law which regulates the rights, restrictions obligations of trade unions, workers and employers in the United kingdom. For information on the same subject outside the British context, see the labour and employment law article.
[edit] Employment law in the United Kingdom
During much of the Nineteenth century the employment contract was based on the Master and Servant Act of 1823, designed to discipline employees and repress the 'combination' of workers in Trade unions.
Employment Law in the United Kingdom has developed rapidly over the past forty years, due to a historically strong Trades Union movement and (since 1973) to the United Kingdom's membership of the European Union. In its current form, it is largely a creature of Statute, (Acts of the UK Parliament) rather than Common Law.
Leading Employment Law Statutes include the Employment Rights Act 1996, the Employment Act 2002 and various legislative provisions outlawing discrimination on the grounds of sex, race, disability, sexual orientation, religion and, from 2006, age.
Unusually for UK legislation, the operation of the Employment Law system is broadly similar across the whole of the UK, although there are some differences in the common law between England & Wales and Scotland and, in addition, Northern Ireland has extra anti-discrimination legislation.
[edit] Summary of Internal Employer's Process: resolving problems before legal action
Recent legislation (particularly the Employment Act 2002) has stressed the importance of employees and employers resolving their differences between them prior to starting costly legal disputes.
All employees have the right to raise formal grievances against their employer. If they do so, the employer should arrange for a meeting between the parties to discuss how to resolve their differences. If the employee remains dissatisfied, they can appeal the outcome of the first hearing. A failure on the employee's part to follow this procedure may preclude a claim for constructive dismissal, and a failure on the employer's part may lead to an increase in the compensation payable to the employee if he successfully pursues a Tribunal claim. For more information on these rules, see statutory dispute resolution procedure
[edit] The Employment Tribunal
After the employer's own processes, such as disciplinary hearings and internal appeals, have been exhausted, employment law cases usually start by the aggrieved employee presenting a complaint to an Employment Tribunal (ET). These (as Industrial Tribunals) were set up under the 1964 Industrial Training Act, although they now have a substantially greater role and do count as courts. They have sometimes been referred to as industrial juries.
A full ET panel consists of a Chairperson (usually an experienced solicitor or barrister) and two "wing members" who are lay persons with skills and experience useful to the Tribunal in making a decision. One wing member will have a background representing employees (typically as a Trade Union officer) and the other will have a background in business (most often as an HR officer.)
Preliminary hearings to clarify issues in the case are a frequent part of the Tribunal process: these are typically dealt with by a Chairperson sitting alone.
Northern Ireland offers a Fair Employment Tribunal and an Industrial Tribunal. These are administered by OITFET - the Office of the Industrial Tribunal and the Fair Employment Tribunal.
[edit] Summary of Tribunal Process
Generally speaking a tribunal will hear specific complaints about an aggrieved party being deprived of their rights, including (but not limited to) unfair dismissal.
In short, a claim is submitted, a response is required by a certain deadline, any preliminary issues are dealt with at a case management conference or a pre-hearing review, a period of time is allowed for ACAS (GB) or the LRA (NI) to explore settlement options, and then the tribunal orders are sent out after the ACAS conciliation period has expired leading to a full merits hearing of one or more days. Cases not resolved in their allocated time may be carried over to later date(s) for further consideration of the merits and (if necessary) a separate remedy hearing to discuss the award only. A summary judgment (or Decision) is given at the conclusion, with the parties given a further 14 days to request (unless they ask on the day) 'extended' written reasons behind the judgement.
[edit] Complaints to Tribunal and Time Limits
A complaint of unfair dismissal can only be made where there has been a dismissal, so that there is no general right to complain of unfair treatment. An employee may, however, complain at any time that they consider a statutory 'employment protection' right has been infringed. Where this takes place in connection with a dismissal an employee may combine this with their complaint against the dismissal.
Except where no qualifying time limit applies (as in the case of 'statutory rights') an employee needs to have worked for their employer for a least a year in order to make a complaint of unfair dismissal to an employment tribunal. In addition, a claimant may raise a complaint of discrimination without claiming dismissal or whilst also claiming dismissal but without one year of service. Claimants with less than one year's service may find their unfair dismissal claim is brought to a pre-hearing review where they are asked to explain why they feel they can bring a claim without a year's service, i.e. dismissal due to a public interest disclosure or for being a trade union member. Most tribunal offices however write to the claimant upon receipt of their claim form telling them that they have 14 days to show why their claim should be heard, otherwise the chairman will strike out the claim.
In certain circumstances, an employer's conduct could be such that an employee is entitled to resign in response and to regard that as an unfair "constructive" dismissal. Failure by an employer to extend a fixed term contract can also be an instance where a claim for unfair dismissal may be made.
[edit] Preacceptance Protocols
A complaint of unfair dismissal must be made to an employment tribunal within 3 to 4 months of the effective date of termination of the employment.
If the substance of the complaint has been raised in writing with the employer either before or within 3 months of termination, then a claimant has 3 months to submit a complaint. If the substance of the complaint has not been raised either before or within 3 months of termination, the claimant has 4 months to submit a complaint, with a grievance being submitted within the extra month provided if it has not already been submitted within the first 2 months. If a grievance is then submitted within the fourth month, the claimant has a further two months within which to submit a complaint. Standalone unfair dismissal complaints do not require a grievance whereas constructive dismissal claims do.
Most solicitors within the UK will submit all complaints on the claim form (ET1) within the three months from the effective date of termination (EDT) "to protect their client's position", with some of the claims being rejected and subjected to the preacceptance protocol. The solicitors will then likely copy and paste the ET1 as a grievance and fire it off to the respondents, inviting them to proceed with the modified procedure, turning the grievance process into a mere formality. The solicitors then wait 28 days and then simply resubmit the same claim with the grievance information filled in, which allows the tribunal to proceed to accept the preaccepted claims. Claim forms which are rejected entirely and subject to preacceptance in whole, are not notified to the respondent at all, as preacceptance is an administrative decision. Only if part of the claim is accepted with the rest subject to preacceptance, is the claim form served on the respondent with a blank response form due back within 28 days.
If a claimant has not submitted a complaint with the 3 month period, the tribunal will likely invite the claimant to write to the chair of the tribunal explaining why they feel the claim should be accepted out of time, within 14 days of the tribunal writing to the claimant. Those tribunals that do not pick this up will invite the respondent to address this in the response form (ET3) and a pre-hearing review will most likely be arranged to discuss the same.
[edit] Fair Reasons for Dismissal
In a complaint of unfair dismissal (or unfair redundancy or unfair constructive dismissal), the burden of proof is initially on the claimant (the employee) to establish that there was a dismissal. The respondent (the employer) then has to show that the dismissal was for a reason which is capable of being fair and must relate to the employee's
- conduct
- capability
- redundancy
- statutory ban
- having reached retirement age (from 1st October 2006)
- or "some other substantial reason"
The claimant might dispute that the real reason was one of these and may, in particular, seek to argue that the reason related to a protected right. If they were to show that the reason did relate to a statutory protected right, rather than a potentially fair reason above, the dismissal would be automatically unfair. For instance, if an employee resigns due to not being paid their wages for a third week running, they may be able to succeed with a claim for automatically unfair constructive dismissal even without a year's service. A claimant dismissed in her first week of employment on grounds of pregnancy will almost certainly receive a substantial award.
Where the respondent can show that such a potentially fair reason for dismissal did exist, however, the tribunal must then decide whether their action in dismissing fell within the range of responses that a reasonable employer might adopt. This is different from any opinion the tribunal might itself have about the fairness of a dismissal. There is no burden of proof on the question of fairness, it being a neutral question for the tribunal.
[edit] Tribunal Awards
If a claimant is successful in a claim for unfair dismissal then they can be given a "compensatory award". There is no statutory restriction on what may be awarded under this heading, except that it must be "just and equitable in all the circumstances". In the main a compensatory award reflects past loss of earnings, together with a sum for future loss of earnings. A notional sum is often awarded for "loss of statutory rights" (For example: The need to work a further 12 months to re-acquire the right to complain of unfair dismissal) . The compensatory award is limited by a statutory cap (from 1/2/2005 this was £56,800). This "cap" is increased annually in line with inflation (from 1/2/2006 it is £58,400). The statutory cap does not apply to claims for discrimination, nor does it apply to unlawful deductions from wages.
Where the unfairness in a dismissal is procedural only, a respondent may be able to claim that the employee's compensation should be limited to the period the respondent would have needed to dismiss the employee fairly in any event - as when making assessments in selecting particular employees for redundancy, for instance . This is known as a "Polkey" reduction. An award may also be reduced because of contributory fault on behalf of a claimant, i.e. the claimant's conduct broke down the employment relationship to some degree or disrupted the grievance or disciplinary proceedings. In some cases this may be as much as 100%, so that an employee might take home nothing.
Compensation for discrimination claims is not subject to statutory limits however and, in the case of highly paid employees, can be substantial. Compensation is awarded in discrimination cases under a distinct head known as "Injury to feelings." A number of leading cases, principally the "Vento" case, provide guidance to the Tribunal on how to determine the value of an injury to feelings award. There are three bands: the lower band (£500-£5000), the middle band (£5,000-£15,000) and the upper band (£15,000-£25,000). Occasionally, the value of a case can substantially exceed these guidelines, for example the case of Sergeant Gurpal Verdi, where he successfully pursued the Metroploitan Police for a sum in excess of £200,000. It must be recognised that these were extraordinary circumstances, however.
In addition, the Tribunal is unable to award more than £25,000 in respect of pure contractual claims. Claimants with large contractual claims should therefore carefully consider whether it would be more appropriate to issue proceedings in the High Court or County Court.
[edit] Recoupment
Some awards are subject to the Recoupment Regulations, which allows the Department for Work and Pensions to recoup (recover) any income support or job seekers allowance paid to the claimant during the time after the EDT and before the tribunal hearing. The DWP should issue a Recoupment Notice detailing how much is to be repaid by the respondent to the DWP, with the balance due to the claimant.
[edit] Legal Costs
Whilst the Tribunal has the power to order a party to proceedings to pay the costs of the other side, in practice this is not regularly done. It is perceived as being contrary to public policy to create an environment in which claimants hesitate to issue a claim for fear of financial penalties.
This has a huge impact on the conduct of Tribunal cases. If a party is legally represented, their costs of fighting the case from start to finish would be in the region of £5,000-£6,000 for even a relatively simple unfair dismissal claim. This means that many cases with little or no merit are settled for small sums because to fight and win is more expensive than to settle. Conversely, legally represented claimants often settle for less than they would be entitled to in order to avoid their costs.
[edit] ACAS / LRA settlements
Given the Tribunal's costs regime, only about a third of cases issued in the ET ever reach a full hearing: most are either withdrawn or settled. Crucial to this process are ACAS officers, who are routinely assigned to each new claim. They act as "middlemen," passing offers of settlement between the parties on a "without prejudice" (off the record) basis.
Settlements agreed out of the employment tribunal hearing via ACAS in the UK or the LRA in NI are legally binding once verbally agreed. ACAS settlements are effected on form COT3 whilst LRA settlements are usually effected on form CO3 or CO3(C). Settlements that are not honoured are enforceable in the local county court or sheriff's office with the defendant liable also for the claimant's legal fees (usually £30).
[edit] References
- [1] DTi Employment Legislation - PL712 - Meaning of dismissal
- [2] DTi Employment Legislation - PL712 - Making a complaint
[edit] Reviews and Appeals
Either party can ask an employment tribunal to review its own decision and, independently, may appeal the decision to a higher court, the Employment Appeal Tribunal (EAT) on one of three grounds (1) an error in law, (2) a finding of fact not supported by evidence, or (3) a finding of perversity. Strict time limits apply in both cases.
The decisions of the EAT, are treated as binding precedents by employment tribunals.
An EAT decision may be appealed to the Court of Appeal (in England and Wales) or the Court of Session (in Scotland), and after that to the House of Lords. At any stage in the process of hearing a claim or appeals therefrom, a question on the interpretation of European law may be referred to the European Court of Justice.
[edit] References
- Employment Law, by Tom Harrison, published by Harrison Law Publishing/Business Education Publishers.
