U.K. Employment Law Update: Rising Employment Tribunal Claims, Serious Employee Misconduct and Who Is the True Employer

A Year on: The Continued Rise of Employment Tribunal Claims

The U.K.’s Ministry of Justice has published its quarterly Employment Tribunal statistics for April to June 2018. These quarterly statistics are of particular note in light of the landmark Supreme Court ruling in July 2017 which found that the fees regime unlawfully prevented access to justice (see our previous update here).

These statistics show a continued increase in the number of claims brought in the Employment Tribunal, reflecting what was to be expected after the abolition of the fees regime: that employees and workers are more willing and able to bring claims now that they are no longer obliged to pay a fee. In summary, the statistics show the following:

• Single claims alone are up by 165 percent compared to the same quarter last year.
• Single claims outstanding are up by 130 percent compared to the same quarter last year. There is a current recruitment drive for a greater number of employment judges to assist with the backlog in the medium term.
• So far, there have been 12,400 refund payments to a total value of just over £10 million. It is believed that the total refund value may be as much as £32 million.

Although these statistics will be of concern to employers, it is important to remember that having appropriate policies and procedures in place and taking advice at an early stage will assist in protecting against potential claims from employees and workers. In addition, the Employment Tribunal will continue to exercise its ability to weed out claims which are vexatious or have no reasonable chance of success.

Dismissal With no Prior Warnings: Unfair if the Misconduct Is not “Gross” Misconduct?

In Quintiles Commercial UK Ltd v Barongo [2018] UKEAT 0255/17/JOJ the U.K. Employment Appeal Tribunal (EAT) considered whether a dismissal for misconduct with no prior warnings is unfair if the conduct is not “gross” misconduct.

Mr Barongo worked in pharmaceutical sales. He had a clean disciplinary record until he failed to complete two compulsory training courses as a result of which he was dismissed for gross misconduct. At the internal appeal, the misconduct was re-categorised as “serious” rather than “gross” misconduct but the decision to dismiss was upheld. Mr Barongo brought a claim of unfair dismissal. The Employment Tribunal held that where there had been no gross misconduct, the employer should have issued a warning before moving to dismissal. It had failed to do so here and therefore the dismissal was unfair.

The EAT overturned this decision, finding that it had been wrong for the Employment Tribunal to hold that a dismissal would always be unfair if there was no gross misconduct and no prior warning. A dismissal can be fair if it is for a reason related to the employee’s conduct; it is therefore not automatically unfair if the misconduct in question is not gross misconduct. The Employment Tribunal had impermissibly substituted its own view on the appropriateness of the sanction for that of the employer in the particular circumstances of this case. The case was sent back to the Employment Tribunal for reconsideration.

This case will be of comfort to employers but should be approached with great caution. The fairness of a dismissal will be judged on a case by case basis and in most instances of misconduct which are not gross misconduct, dismissal with no prior warnings will be unfair.

Who Is the True Employer?

In Dynasystems for Trade and General Consulting Ltd and Others v Moseley UKEAT/0091/17/BA, the Employment Appeal Tribunal (EAT) provided guidance on whether the employer named in an employment contract is the true employer.

Mr Moseley was employed under an employment contract with a Jordanian company. At the same time as his employment contract was signed, he was given a letter signed by a senior employee of a U.K. company within the same group of companies in connection with a pre-employment requirement. During his employment, Mr Moseley did not do any work for the Jordanian company; he carried out work for the U.K. company, was held out to third parties as working for the U.K. company and his line manager was a director of the U.K. company. Only his salary came from the Jordanian company. Mr Moseley brought a number of claims following his termination.

At issue was whether he was an employee of the U.K. company or the Jordanian company. The EAT held that the identity of an employer is a question of contract, which should be determined by what was agreed between the parties. Where a written contract is entered into, the parties’ subsequent conduct can serve as evidence of what was agreed. On the facts of this case, the contract did not accurately reflect what had been agreed; it was clear from the subsequent conduct of the parties that it was never their intention that Mr Moseley would work for the Jordanian company.

Employers that are part of a large international group of companies should ensure that their employment contracts correctly state the company that will be the employer. They should also include appropriate provisions enabling them to require employees to work for other companies within the group.