1. Employment Status
The EAT has determined a new case on employment status and confirmed the position that where there are no mutual obligations to accept and offer work on either party; there is no employment relationship.
In the case of Knight v BCCP, a taxi driver working for a taxi firm had his contract terminated after 6 weeks, he asserted that he should have received 1 weeks’ notice, this being the minimum statutory notice payable to an employee under the Employment Rights Act 1996. In this case there was no contractual documentation in place. Therefore the tribunal looked at the actual working practices in order to determine if he was an employee or not.
It was found that the taxi driver did not receive holiday, sick pay or overtime, only received pay for the occasions he worked, was obliged to pay his own income tax and National Insurance, and most importantly there was no obligation for the taxi driver to accept work and the taxi firm was not obliged to offer work.
Accordingly, it was held that on the facts, the taxi driver was a worker but not an employee.
The result was therefore that he was unable to bring a claim for statutory notice pay as this particular right is only afforded to employees. This case shows once again the type of circumstances where someone will not be found to be an employee.
2. Dismissal of employee for ‘some other substantial reason’
The Employment Rights Act 1996 (‘ERA’) specifies that dismissals for certain reasons are acceptable if they are fair. Section 98(2) of the ERA sets out potentially fair reasons for dismissals (provided a fair procedure is followed) such as conduct, capability or redundancy. There is also another category of potentially fair dismissals which covers a dismissal that is for ‘some other substantial reason’. Case law has established when a dismissal will fall into this category and this case is on point.
In the recent case of Ezsias v North Glamorgan NHS Trust, the Employment Appeal Tribunal ruled that the dismissal was fair where an employee had been dismissed because of a fundamental breakdown in trust and confidence caused by the employee’s conduct. This is not within the list of potentially fair reasons.
The employee in question had claimed he had been dismissed because he had made protected disclosures (whistleblowing). However, the employer’s investigation had found that the employee had acted in such a way as to cause a serious breakdown in relationships with all his colleagues and attempts to resolve the conflicts were unsuccessful. For this reason his employment was terminated on the grounds of a breakdown in trust and confidence.
Importantly, the Tribunal ruling stated that this dismissal was not for misconduct or lack of capability but for ‘some other substantial reason’. Therefore, the employer’s misconduct and capability disciplinary procedures did not need to be followed, since misconduct and capability were not in question. The Tribunal agreed this was a fair dismissal on the facts for some other substantial reason.
Employers should note that a dismissal for some other substantial reason is not a ‘catch all’ category for dismissal. In this case there were numerous efforts by the employer to resolve the conflict over a period of time but the breakdown of working relationships caused by the employee’s conduct was sufficiently serious to warrant the termination. Even where a specific capability or conduct procedure is not required, it is still important that a fair procedure is followed as this, along with a fair reason for the dismissal, should protect against successful unfair dismissal claims.
Adrian, a highly experienced lawyer, founded Lawspeed in 1997. He is responsible for developing our extensive portfolio of products and services, including the widely used Lawspeed contract templates. Adrian is an expert on “recruitment law” and specialises in contracts, regulatory compliance, employment status and dispute handling. He is chair of the trade body the Association of Recruitment Consultancies, the only lawyer lead recruitment trade body in the UK. Adrian and his co-director Ravi devised Standards in Recruitment as a vehicle for helping drive up standards and compliance in the industry.
Adrian is our lead in discussions with the government over regulatory evolution. Apart from assisting with client support, Adrian’s primary role is research and development into methods of business delivery, our latest service Proterms being his most recent project. Adrian heads our IR35 lawyers team.