Employee unfairly dismissed for failing to follow a fair and reasonable procedure

The recent employment tribunal between Sylvia Joy Williams v Lyons Holiday Park Limited serves as a reminder to employers of the importance in getting the reasons for dismissal correct, and to act reasonably when dismissing employees.

The case

Lyons Holiday Park Limited (the “Employer”), a large employer with an in-house HR team, was judged to have unfairly dismissed Ms Sylvia Joy Williams (“Williams”) on the grounds of redundancy.

The Employer, following a re-structuring exercise, engaged in a redundancy process whereby one member of the marketing department would be dismissed. Following a subsequent resignation from the department, the Employer decided to continue with the redundancy process despite Williams, an employee who had been with the company for a period of 9 years, being the then only candidate at risk of selection. Williams was subsequently made redundant.

The tribunal found that there had been no redundancy situation and that Williams had been dismissed for reasons of performance and capability.

A combination of factors including the fact that Williams was the only employee in the pool for selection for redundancy, that it was decided internally that she was not to be appointed to the newly advertised Social Media role, and her inter-personal relations, actual performance and perceptions of capability within the business led the tribunal to find that the Williams had been ‘selected’ by the Employer for dismissal.

Further, the tribunal found that (even if they had been wrong about there being no redundancy situation) that the means of notification of redundancy, consultation and consideration of alternatives given to Williams were not meaningful and were therefore defective. The Employer had failed to follow a genuine redundancy process and Williams was not given an opportunity to appeal or raise a grievance and this was inherently unfair.

In light of the judgement a financial settlement was reached between the Employer and Williams for an undisclosed amount.

Getting dismissal right

This case serves as a useful reminder to employers on the need for getting the reasons for the dismissal of employees correct.

Under section 98(1) of the Employment Rights Act 1996 there are five potentially fair reasons for dismissal. These are:

1. Capability;
2. Conduct;
3. Redundancy;
4. Statutory Restriction; and
5. Some Other Substantial Reason.

Despite capability being a potentially fair reason for dismissal, Williams was incorrectly dismissed for the purposes of redundancy and that made her dismissal unfair.

Further, once an employer has identified a fair reason for dismissal, they must be able to show that they have acted reasonably in dismissing an employee for that reason.

This test is outlined in section 98(4) of the Employment Rights Act 1996 and can be typically divided into two questions:

1. Did the employer follow a fair procedure?; and
2. Did the employer act reasonably in treating the reason as a sufficient reason for dismissal?

Evidence in acting reasonably in dismissing an employee includes following a fair procedure, referring to company policies, and giving the employee the right to appeal. Consideration is also given to the size and administration resources of the employer.

In the specific case of redundancy, it is further important that an employer ensures that the redundancy procedure involves:

1. A fair selection of the employees to be made redundant;
2. A consultation with the selected employees before any final decisions are made;
3. Exploring alternatives to dismissal; and
4. Considering whether there are any other suitable jobs within the organisation for the employees.

Conclusion

In the case of Sylvia Joy Williams v Lyons Holiday Park Limited both the reasons for dismissal and the procedure followed for dismissal were incorrect and / or insufficient.

A key issue with this case is that Williams would have been able to argue that if her employer had properly managed her performance though a capability/performance improvement process then she may have met the objectives and stayed employed indefinitely.  This means that she could claim maximum losses for unfair dismissal of £89,493 or one years pay (whichever is the lower).

Two simple questions for employers to consider before seeking to dismiss an employee are firstly to ask ‘Why are we seeking to dismiss this employee?’ and secondly ‘Are we acting reasonably in dismissing the employee for this reason?”.