1.2 It is unusual for both types of action to be brought, and either the court or the tribunal could stay one action, pending the outcome of the other'. As a general rule, compensation recovered in one action would be deducted from any award in the second.
Wrongful Dismissal:
2 Wrongful Dismissal
2.1 An action brought for wrongful dismissal is one for breach of contract. Any damages awarded should only put Depp in the position he would have been had contractual obligations been performed, and would be limited to payment for the period of notice that should be given by the employer2. If this is not contained within Depp's contract of employment3, then reasonable notice should be given. The minimum period is defined by statute4 in Depp's case as1 week. If his contract of employment states a longer notice period, then the contractual notice period will apply.
2.2 As well as his salary, Depp would also be due any other contractual benefits due for the period has the notice been worked5. Although Depp was dismissed with immediate effect, which is allowed by the contract, he would be entitled to be paid for that notice period6 unless his conduct amounted to a fundamental breach of contract.
2.3 If Depp's contract of employment allows for summary dismissal on payment in lieu of notice, then the dismissal is not wrongful whether or not the money is actually paid, as the terms of the contract have been met. Depp would have
1 Carter - v - Credit Change Ltd [1979] 1 All ER 252
2 Foska Services (UK) Ltd - v - Birkett [1996] IRLR 325
3 S l(4)(e). Employment Rights Act 1996.
4 S86(l) Employment Rights Act 1996
5 Addis - v - Gramophone Co Ltd [1909] AC 488
6 T & K Home Improvements Ltd - v - Skilton [2000] IRLR 595
Page 1 of 6
to sue for liquidated damages under the contract, and would not be obliged to mitigate his loss by, for example, finding alternative work (7).
2.4 In the case of a fundamental breach of contract, no notice need be given.
2.5 Summary dismissal should only be used in exceptional circumstances (8). Conduct such as gross misconduct and dishonesty etc. is recognised as grounds on which an employee may be summarily dismissed (9). The conduct must be such that it destroys the basis of trust between the employee and employer for it to justify summary dismissal (10).
2.6 Each case has to be taken on the facts, to determine whether or not the summary dismissal was justified. However, the evidence found after Depp's dismissal regarding his timesheet can be taken into account (11).
Unfair Dismissal:
3 Right to make a claim
3.1 Every employee has the right not to be unfairly dismissed (12). From the description given in the evidence Depp qualifies as an employee (13), and is entitled to bring a complaint of Unfair Dismissal, providing that his claim is made within three months of the date of his dismissal.
4 Fairness of Dismissal
4.1 There are five grounds on which a dismissal is capable of being fair (14). These are the capability of the employee, his conduct, redundancy, statutory restriction or some other substantial reason.
4.2 Whether a dismissal based on one of these five grounds is fair will depend upon whether the employer acted reasonably in treating the reason as a sufficient reason for dismissing the employee, and the matter will be determined on the substantial merits of the case (15).
7 Abrahams - v - Performing Rights Society [1995] IRLR 486
8 Jupiter General Insurance Co - v - Shroff [1937] 3 All ER 67 PC
9 Blyth - v - Scottish Liberal Club [1983] IRLR 20
10 Jackson - v - Invicta Plastics [1987]
11 Boston Deep Sea Fishing - v - Ansell [ 1888]
12 S94 (1) Employment Rights Act 1996
13 S230(l) and (2) Employment Rights Act 1996
14 S98 Employment Rights Act 1996
15 S98(4) Employment Rights Act 1996
Page 2 of 6
5 Fairness of Procedure
5.1 If a dismissal is potentially fair, it may be rendered unfair by the means used to arrive at it. Proper procedures should be followed, particularly bearing in mind the ACAS Code of Practice (16).
5.2 The Employment Appeal Tribunal set out the standard for the conduct of disciplinary hearings (17), and its guidance set out a number of themes, many of which have not been followed in the case of Depp.
5.3 Any disciplinary hearing must be fair. Whilst Depp knew the nature of the allegation being made against him, it is unclear whether he was given sufficient detail to allow him to prepare a case (18).
5.4 It is unclear whether or not Depp has seen Vincent and Cushing's witness statements. He should normally be shown such statements (19), unless it was felt necessary to protect the anonymity of the witnesses (20).
5.5 Depp was given no opportunity to state his case (21), nor to explain any mitigating factor, such as the alleged affair by Grant with his fiancée (22). This is a very serious defect in the process, running contrary to the principle of natural justice.
5.6 Depp was entitled to be accompanied at the disciplinary hearing (23), but this was not permitted. Depp was entitled to be heard by an independent panel (24), but clearly as he was dismissed on the instruction of the complainant. Grant, this was not the case.
5.7 Depp should have been afforded an appeal to a higher level of management, one that had not been thus far involved in the case (15). A tribunal will take into account the size and administrative resources of the company in weighing whether or not a decision to dismiss was unfair, but Moonshine could have brought in an independent arbitrator to hear any appeal.
5.8 Depp's refusal to appeal to Grant, given Grant's involvement in his dismissal, is not unreasonable, and would not adversely affect his tribunal claim given the circumstances (although failure to complete the statutory procedure by an employee can lead to a reduction in award) (26).
16 ACAS Code of Practice "Disciplinary and Grievance Procedures in Employment"
17 Clark - v - Civil Aviation Authority [1991] IRLR 412
18 Hutchins - v - British Railways Board [1974] IRLR 303
19 Louies - v- Coventry Hood and Seating Co Ltd [1990] IRLR 324
20 Linfood Cash & Carry Ltd - v - Thomson [1989] IRLR 235
21 Tesco (Holdings) Ltd - v - Hill [1977] IRLR 63
22 Budgen & Co - v - Thomas [1976] IRLR 174
23 S 10 Employment Relations Act 1999
24 Article 6, European Convention on Human Rights, Human Rights Act 1998
25 S C Brown Communications - v - Walker (unreported)
26 S31 Employment Act 2002
Page 3 of 6
5.9 The statutory procedure for cases of summary dismissal for gross misconduct (27) appears not to have been followed correctly. This is sufficient for Depp to be considered to have been unfairly dismissed, even though he would have been fairly dismissed had the proper procedure been followed.
5.10 Depp will be entitled to a minimum compensation award of four weeks' pay, and if Moonshine Leisure is found to have unreasonably failed to follow the standards set out in the statutory procedure, the Employment Tribunal may increase any compensation award by between ten and fifty percent.
6 Subsequently Discovered Evidence
6.1 Evidence found after the dismissal cannot, unlike with a wrongful dismissal case, be used to imply that the dismissal was fair (28). However, it can affect the amount of any compensation awarded (see below).
7 Remedies
7.1 The tribunal could make an order for Depp's reinstatement (29).
7.2 An order for re-engagement could be made.
7.3 In determining whether to make a reinstatement or re-engagement order, the Tribunal will take into account whether Depp wishes to return to his job, whether it is practicable for Moonshine to take him back on, and importantly in this case, whether Depp contributed towards his dismissal, and if so the extent to which it would be just to order his reinstatement.
7.4 If a reinstatement order were made, but not complied with by Moonshine, the tribunal will make a compensation award based on
(a) basic award
(b) compensatory award
(c) additional award
7.5 Any award made because the dismissal was unfair due to a failure by the employer to follow the statutory dismissal procedure (30) would be deducted from the compensatory award element.
7.6 If no order for reinstatement / re-engagement is made, then the Tribunal will make an award based on
(a) basic award
(b) compensatory award -
27 Employment Act 2002, S29
28 Devis-v-Atkins[1977]
29 S113 Employment Rights Act 1996
30 S123 (8) Employment Rights Act 1996
Page 4 of 6
7.7 Because Depp was dismissed without Moonshine carrying out the statutory dismissal procedure, if the basic award would otherwise be less than four weeks' pay, the tribunal may increase the award to four weeks’ pay, unless they consider to do so would cause an injustice to Moonshine (31).
7.8 However, because Depp's conduct prior to dismissal was poor, the tribunal may use its discretion (32) to reduce the basic award. In this case, the use of after discovered evidence is appropriate.
7.9 The entitlement to the basic award is automatic as soon as a dismissal is held to be unfair, and Depp does not have to show any financial loss (33), and it is payable even if no compensation award is made (34).
7.10 The Compensation Award is what the Tribunal decides is just and equitable in the circumstances, having regard to Depp's losses as a result of the dismissal, including any loss of benefit etc that he might reasonably have expected to have received (35) .
7.11 If the tribunal finds that Depp's conduct was blameworthy, then it should reduce the compensation by some amount, following the just and equitable rule (36), and can award nil compensation if it feels that is appropriate (37).
8 CONCLUSION
8.1 Any claim for wrongful dismissal by Depp would be unlikely to succeed, particularly in the light of the subsequently discovered timesheet evidence.
8.2 Providing that it was brought in time, a claim for unfair dismissal by Depp would almost certainly succeed, particularly in light of the unfairness of the manner of his dismissal, even though Depp's conduct would ordinarily have been sufficient for summary dismissal to have been a reasonable course of action.
8.3 Reinstatement is unlikely to be ordered given the animosity between Grant and Depp (38).
8.4 Any award of compensation may be reduced by the tribunal in the light of Depp's misconduct
9 RECOMMENDATION
31 S120 (1) (A) Employment Rights Act 1996
32 S122 Employment Rights Act 1996
33 Cadbury Limited -v - Doddington [1977] ICR 982
34 British United Shoe Machinery Company - v - Clarke [1978] ICR 70
35 S 123 (1) Employment Rights Act 1996
36 Optikinetics Ltd - v - Whooley [1999] ICR 984
37 W Devis & Sons Ltd - v - Atkins [1976] 2 All ER 822
38 Coleman and Stephenson - v - Magnet Joinery Ltd [1974] ICR 25
Page 5 of 6
9.1 That Moonshine attempt to negotiate a full and final settlement with Depp in respect of his claim for Unfair Dismissal, having regard to both his degree of misconduct but also as Moonshine cannot successfully defend an Unfair Dismissal case, only argue about the level of compensation, with regard to the costs in terms of staff time, legal representation and the adverse publicity that would associate to the Moonshine brand from a widely-reported tribunal case.
9.2 Given that the dismissal was based on the effect that Depp's misconduct had on the image of the company, there can be little advantage to giving that misconduct a wider airing unless it becomes unavoidable.
BIBLIOGRAPHY:
ACAS Code of Practice "Grievance and Disciplinary Procedures in Employment"
Selwyn's Law of Employment,
Selwyn NM, ISBN 0406 94996 4,
Butterworths Westlaw Employment Rights Act 1996, Ch 18, HMSO
Page 6 of 6
