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Remedies for Unfair Dismissal

KB
BY Kirstie Beattie
Employment Law & HR

In last month’s edition of LAWmail, we questioned whether there would be a rise in applications for interim relief as a result of the COVID-19 pandemic. Only a few days later, in Morales v Premier Fruits (Covent Garden) Ltd an employment tribunal granted interim relief to an employee claiming unfair dismissal on grounds that he used a trade union to lodge a grievance about a reduction in wages and an alleged lack of personal protective equipment (PPE) during the COVID-19 pandemic. This may mark the beginning of an upwards trend.

This month we have decided to stick with the theme of unfair dismissal remedies and are looking specifically at reinstatement and re-engagement. It often comes as a surprise to employers that in the event an unfair dismissal claim is upheld, the judge can order them to take the employee back, either on exactly the same terms they enjoyed previously (reinstatement) or on such other comparable terms as the tribunal sees fit (re-engagement). Re-engagement orders can extend not only to the employer themselves but to their successors and associated employers. The employer will typically be expected to make up all the employee's lost salary and benefits for the period between dismissal and the date of reinstatement/re-engagement. Therefore, these remedies are potentially far-reaching.

 

Like interim relief, reinstatement and re-engagement are rare and are awarded in fewer than 1% of cases. This is largely due to the factors which must be considered when deciding whether to grant such an order. Firstly, the tribunal can only order reinstatement or re-engagement where the employee expresses a wish for them to do so. A tribunal cannot order reinstatement or re-engagement and also make a basic or compensatory award. Often by the time a case reaches tribunal, the relationship between the parties has soured to the point that the claimant has no appetite to go back to work for their former employer, hence reinstatement and re-engagement are rarely sought and financial compensation is usually preferred.  

 

Secondly, the tribunal will consider how practicable it is for an employee to be reinstated or re-engaged. An employer facing such a situation will likely argue that neither remedy is practicable due to the breakdown in trust and confidence. This was the case in Kelly v PGA European Tour in August 2020, whereby the EAT upheld an employer's appeal that its concerns about an employee's capability and integrity could undermine trust and confidence, making re-engagement impracticable. In that case, the EAT accepted that the employer had a genuine and rational basis for believing that trust and confidence had been impaired and the employment tribunal should not have interfered with that.

 

Finally, where the employee’s conduct contributed towards the decision to dismiss (known as “contributory fault”), this will usually sway the judge towards an outcome other than reinstatement or re-engagement. Where the judge nevertheless determines that such an award is appropriate, s/he can order that the employee is re-engaged on terms which are “just”, meaning potentially less favourable than those enjoyed previously.

 

In conclusion, unlike interim relief, it seems improbable that the number of cases involving awards of reinstatement and re-engagement will significantly increase. However, any employer defending an unfair dismissal claim should take note of the possibility, no matter how remote they think it may be.

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