Until recently, our view, as expressed in EEF’s Dispute Resolution Guide, was that any breach of the statutory procedure, including unreasonable delaying a step or action, would result in increased compensation, and where applicable, also a finding of automatic unfair dismissal. This view was backed up until very recently by case law at EAT level.
There has now been an important, and employer-friendly, shift in the case law. The Court of Appeal has confirmed, in Selvarajan v Wilmot [2008] EWCA Civ 862, a case where the employer took about four months to deal with the appeal against dismissal, that an unreasonable delay does not make the dismissal automatically unfair.
Section 98A(1) of the Employment Rights Act 1996 is drafted such that the automatic unfairness principle kicks in if: a) one of the SDPs applies in respect of the dismissal; b) the procedure has not been completed; and c) the non-completion is wholly or mainly attributable to failure by the employer to comply with its requirements.
The Court of Appeal’s judgment distinguishes between non-completion of the procedure, and non-compliance with other procedural requirements, such as timetabling standards. In this case, it held that the three steps of the procedure had been completed – there had been a letter, a meeting and an appeal. In its view, completion of the procedure was not expressly or impliedly conditional on, or subject to, compliance with the general requirements. Good news for employers, particularly given that the wording of section 31 of the Employment Act 2002, which deals with the adjustment of awards, is framed in a similar way.
Of course, it is still open to an employee to try and circumvent the effect of this judgment by withdrawing from the procedure before its completion on the ground of the employer's unreasonable delay. In practice, however, it is unlikely that many employees will do this, given that they will risk a reduction to their award should the tribunal decide the delay was reasonable after all (as the non-completion will then be the employee’s fault).
Finally, how might this judgment impact on other areas, for example, retirement dismissals? Under section 98ZG of the ERA, there is an automatically unfair dismissal where there is a ‘failure on the part of the employer to comply with an obligation imposed on him’ by any of the following specified provisions of Schedule 6 of the 2006 Age Regulations: (a) para 4 (fallback notification of retirement); (b) paras 6 and 7 (duty to consider employee's request not to be retired), (c) para 8 (duty to consider appeal against decision to refuse request not to be retired).
There are various timing provisions contained in those referenced paragraphs, for example, Schedule 6, para 7(6) requires an employer to ‘give the employee notice of his decision on the request as soon as is reasonably practicable after the date of the meeting’.
Might Selvarajan be successfully argued to rescue an employer from a claim of unfair dismissal where, for example, an employer has not given the employee notice of its decision within that ‘soon as is reasonably practicable’ window? In our view – this is unlikely. The wording at section 98ZG unlike section 98A(1) does not use the words ‘ failure to complete’. Furthermore, unlike Schedule 2 of the Employment Act 2002, the 2006 Age Regulations enshrine the required timeframe in the process itself rather than in a separate ‘general requirements’ provision.