It is normal practice for employees with less than 12 months service who have been dismissed summarily in circumstances where, had they worked their contractual notice, they would have remained employed for more than 12 months to seek damages for loss of the ability to bring an unfair dismissal claim as part of their wrongful dismissal claim. In a recent case Virgin Net Limited -v- Harper (EAT/0777/02RN), the EAT decided employees can no longer claim damages for the loss of a chance to bring an unfair dismissal claim as part of an action for wrongful dismissal.
What does this mean for employers?
Employers are unlikely to be liable for unfair dismissal even if they dismiss in a manner calculated to avoid the employee obtaining one year's service and unfair dismissal rights. Provided the employee is paid in lieu of his notice period (even if that is not provided for under the contract) and other benefits provided for under the contract are also paid in full (in which case there will be no loss under the contract), then no claim for wrongful dismissal can result and it is unlikely that a claim for loss of a chance to claim unfair dismissal can be brought.
- be aware that where an employee is deemed to have been wrongfully dismissed without notice a tribunal, in deciding the effective date of termination, will add statutory minimum notice (1 week). In some cases this may enable the dismissed employees to claim unfair dismissal.
- note that the EAT commented that its decision may have been different had the Company breached a contractual disciplinary procedure in circumstances where, had the procedure been followed, the employee would have reached the minimum service criteria for unfair dismissal;
- In view of the EAT’s comments review disciplinary procedures (if applicable) and consider the introduction of a non-contractual disciplinary procedure to avoid potential claims based on breach of a contractual disciplinary procedure;
- Note that the new Statutory Disciplinary and Grievance Procedures are due to be brought into force on 1 October 2004. The Regulations provide that the Statutory Disciplinary Procedure is deemed to be incorporated into all employees' contracts of employment regardless of length of service. Employees who are dismissed shortly before they obtain one year's service in circumstances which breach the disciplinary procedure will be able to argue that had the procedure been properly followed then they would have obtained one year's service and the right to claim unfair dismissal.