Employment Law Update – December 2020
Thursday 17th December 2020
REPUDIATORY BREACH DURING MATERNITY LEAVE
In the recent case of Chemcem Scotland Ltd v Ure, the EAT held that an employee’s failure to return to work following maternity leave was sufficient to communicate her acceptance of her employer’s repudiatory breach of contract for the purpose of claiming constructive dismissal.
The Claimant worked for Chemcem Scotland Ltd, which was mainly owned by her father. The Claimant and her father had a troubled relationship because her father was in the process of divorcing her mother and had begun a relationship with someone else at Chemcem. The Claimant went on maternity leave on 26 September 2016 and during her leave, her father misled her and failed to communicate to her information which she was entitled to have as an employee. Such examples include, varying her pay without warning, switching her to a different payroll, failing to pay her Statutory Maternity Pay (SMP) on time, failing to answer her queries about her pay entitlement and misleading her as to the true position. At the end of the Claimant’s maternity leave, she did not return to work and she then claimed unfair constructive dismissal. Her argument was that her father’s treatment of her during her maternity leave gave rise to various breaches of the implied term of mutual trust and confidence.
The Employment Tribunal upheld the Claimant’s claim and found the Claimant’s contract of employment had terminated on 25 September 2017 (when C was supposed to return to work from maternity leave). Furthermore, the ET found that various events which occurred during the Claimant’s maternity leave were repudiatory in nature, meaning the Claimant was entitled to accept repudiation and thus treat herself as dismissed. Chemcem tried to appeal on the basis the Claimant failed to communicate her reputation. However, the EAT dismissed the appeal, stating the failure to return to work was enough to communicate repudiation in this instance.
This case demonstrates to employers the importance of maintaining sufficient communication with employees on maternity leave, along with providing information to employees regarding any changes that are made to their pay/payroll and answering any queries about their pay entitlement. The employee’s SMP should also be paid on time. If employers fail to do so, they risk being in repudiatory breach. In such cases, a failure to return to work after maternity leave can be valid acceptance of that breach and the employee may bring a claim for unfair constructive dismissal.
CHANGES TO EARLY CONCILIATION PROCEDURE
The Employment Tribunals (Constitution and Rules of Procedure) (Early Conciliation: Exemptions and Rules of Procedure) (Amendment) Regulations 2020 set out several changes to the procedure followed in Employment Tribunals.
One of the amendments provides that, as of 1 December 2020, the Acas Early Conciliation period will be extended from four weeks to six weeks. Previously, the standard period was four weeks with the option to extend by a further two weeks. However, with this amendment, six weeks will be the standard and there will be no option to extend this further. The aim of this is to reduce the amount of claims brought in the Tribunal and allow a sensible period of time for early conciliation to take place, especially given the current unprecedented times we are being faced with.
The changes implemented by the Act are aimed at reducing the number of claims in the Tribunal and making the Tribunal process quicker and more effective. The extension to the Acas Early Conciliation period may be beneficial to employers, particularly where the pandemic has resulted in reduced staff numbers, as it allows more time for discussion to take place. Employers will, however, need to bear this change in mind when considering whether an employee is in or out of time to bring a claim.
FAIR DISMISSAL FOUND DESPITE LACK OF PROCEDURE
In the case of Gallacher v Abellio Scotrail Ltd , the EAT held that an Employment Tribunal was entitled to find that a dismissal for ‘some other substantial reason’ was fair despite the lack of a proper procedure being carried out. The ‘some other substantial reason’ in this case was a breakdown in working relations between the employee and her manager.
The Claimant, who had more than 2 years’ service, had experienced various disagreements with her manager and, as a result, Abellio Scotrail Ltd (AS Ltd) dismissed her on the basis of a breakdown in working relations. The dismissal took place at her annual appraisal meeting and therefore she was not subjected to any formal procedure leading up to the dismissal. The Claimant filed a claim for unfair dismissal.
The Employment Tribunal rejected the Claimant’s claim of unfair dismissal on the basis that it accepted AS Ltd’s view that the breakdown in working relations was irrecoverable and that this amounted to ‘some other substantial reason’ and hence a fair reason for dismissal under S.98(1)(b) of the Employment Rights Act 1996. With regard to procedural fairness, the ET concluded that this was an exception as set out by the House of Lords in Polkey v AE Dayton Services Ltd 1988 ICR 142. This was because a dismissal procedure would be seen to be pointless. The Claimant then tried to appeal the decision but it was again dismissed by the EAT. The EAT found that, not only would a dismissal procedure not have served any form of purpose, but it would also have worsened the situation given that neither party had any interest in repairing the relationship.
Cases such as this are of course rare for finding fair dismissal given that no formal dismissal procedure was followed. However, it demonstrates that ’some other substantial reason’ can include the breakdown of two senior employees’ working relationship, making it unworkable. Despite this finding, employers should always ensure that a fair and proper procedure is followed when dismissing employees. Failing to do so risks a finding of unfair dismissal. This is a very difficult area so speaking to your contact in the employment team is highly recommended before you rely on “Some other Substantial Reason” in a dismissal.
For further advice on the above developments please get in contact with one of our employment law experts below.