A question of procedure
Consultant editor Darren Newman considers the different stances taken on the meaning of 'a procedure' in s.98A(2) of the Employment Rights Act 1996.
I have yet to meet anyone who can explain to me why the government thought it necessary to introduce the changes to unfair dismissal law contained in the Employment Act 2002. What was it thinking? Unfair dismissal law was well settled and well understood. The need to follow fair procedures was universally accepted, and the consequences of not doing so were clear. Acas had distilled decades of experience into a highly respected code of practice and tribunals looking at procedurally unfair dismissals were free to adjust compensation so as to achieve justice between the parties. Quite why this particular area of law was seen as a candidate for major reform is an enduring mystery to me.
My irritation with the changes brought in by the Employment Act 2002 has been brought into focus by three cases reported in this issue, which deal with the so-called "partial reversal of Polkey" inserted into the Employment Rights Act 1996 as s.98A(2).
This provision follows on from s.98A(1), which provides that a dismissal is automatically unfair if the employer has failed to follow the appropriate statutory dismissal procedure. Section 98A(2) says that, provided the statutory minimum procedure has been followed, the failure by an employer to follow "a procedure" will not by itself make the dismissal unfair if the employer shows that it would have dismissed even if it had followed the procedure.
The issue being debated in the cases reported in this issue is what is meant by "a procedure". In two cases - Pudney v Network Rail Infrastructure Ltd and Mason v Governing Body of Ward End Primary School - the EAT presided over by Judge McMullen takes a narrow view and says that s.98A(2) applies only when there is in place "a procedure" that has been adopted by the employer. In the other case - Alexander and another v Bridgen Enterprises Ltd - the EAT presided over by Mr Justice Elias (the president of the EAT) takes a wide view and says that s.98A(2) applies to any procedural failing on the part of the employer, whether or not there is a breach of any specific procedure.
Just as this issue was going to press, the EAT once again considered this issue. In Kelly-Madden v Manor Surgery(EAT/0105/06), the EAT held that the wider approach in Alexander was correct. Since the EAT was presided over by Elias J, this is perhaps no great shock. With the score between him and Judge McMullen now standing at 2-2, it is clear that this issue will end up in the Court of Appeal. Technically, tribunals are, in the meantime, bound by the decision in Kelly-Madden, as this is the only one of the four cases in which the interpretation of s.98A(2) was the point on which the case was decided. While I would prefer it if s.98A(2) had not been introduced at all, my hope is that the wider view will prevail. Consider a common procedural failing in a disciplinary process - a failure to disclose the contents of statements obtained in an investigation. Suppose the tribunal held that there was a 75% chance that disclosure of the statements would have made "no difference" to the decision to dismiss. If the narrow view is right, s.98A(2) will apply only if the employer has a specific procedure requiring it to disclose such evidence. If there is such a procedure, the dismissal will be fair because, on the balance of probabilities, the employer would still have dismissed even if the procedure had been followed. However, if there is no such procedure, and the employer has merely fallen short of the standards of a reasonable employer, s.98A(2) will not, on this narrow view, apply. The result will be a finding of unfair dismissal and compensation set at 25% of the employee's losses. It surely cannot be right that in two, otherwise identical, situations the employer that has explicitly breached its own procedure is in a better position than an employer that made no such express commitment. The wider view is surely the only sensible way to interpret this poorly drafted - and wholly unhelpful - provision.
