Employment: compliance of discipline and grievance procedure and assessment of pension loss, 19 May 2013

Employment: compliance of discipline and grievance procedure and assessment of pension loss, 19 May 2013

Lund v St Edmund’s School                   Employment Appeal Tribunal

May 2013

Statutory discipline and grievance procedures – ACAS Code – unfair dismissal – pension loss – teacher

The Facts

Mr Lund brought a claim for unfair dismissal against his former employer St Edmund’s School. He had been dissatisfied with the equipment used in his teaching and took some days off due to stress. On his return he was suspended on full pay and underwent a consultation from a psychiatrist. There was no underlying medical problem found, but Mr Lund was dismissed due to his relations with other employees being affected, and ‘an irreparable breakdown in the employment relationship’.

The tribunal decided that the dismissal was unfair: Mr Lund had no warning and no opportunity to appeal and there had been no attempt to deal with Mr Lund’s concerns before relationships with colleagues and the school broke down. However, Mr Lund had also through his own behaviour contributed substantially to his own dismissal, and so the tribunal reduced the basic and compensatory awards by 65%.

Appeal

Mr Lund then appealed against the level of compensation awarded by the tribunal. In the case of an unfair dismissal governed by the Trade Union and Labour Relations (Consolidation) Act 1992, a tribunal has the power to increase the award for compensation. The tribunal made a brief reference to this code of practice and decided it did not apply because firstly, Mr Lund had contributed to the dismissal and secondly, the dismissal was not caused by Mr Lund’s conduct directly but by the effects of his conduct (the breakdown in trust and confidence). This judgement was in error, as whether or not he contributed to the dismissal Mr Lund should not be denied compensation for the school’s failure to act in accordance with fair procedure, a failure which was independent of his actions. As for the second point, while the judgement that the dismissal was due to the effects of Mr Lund’s conduct, rather than his direct behaviour is an ambiguous distinction, this does not change the fact that the code applies to situations where a disciplinary procedure has or should have been invoked – regardless of the outcome. The tribunal now has an obligation to consider the merits of raising the award.

Mr Lund also appealed against the calculation of his pension loss. The tribunal awarded a sum based on the school’s contributions to his pension for one year’s worth of loss. The methodology used by the tribunal was flawed and failed to consider the chances of Mr Lund finding future employment that would include a pension to compensate for the one he lost. There was no explanation for limiting the loss of pension to one year from the date of loss, as he should be entitled to compensation for the pension he would have received had he not been dismissed, up to retirement age.

The reasoning of the original tribunal was flawed, as clearly if you have two self contained businesses, the sale of one will not affect the employees of the other. The claimants’ dismissal was a result of the decision to shut down that business, notwithstanding the earlier intention to transfer some of them. It was held that the TUPE laws come into effect once the transfer has been completed, which would make the breach or compliance with the rules final.

Remarks

Once an ex-employee has been penalised for causing the dismissal, as here with the 65% reduction, he cannot then be punished again by omitting to raise the compensation for the employer’s failure to comply with the law and relevant codes of practice. The tribunal must consider an uplift in compensation.

The tribunal erred in assuming that the method used to assess the pension payments was appropriate simply because Mr Lund suggested it. The job of the tribunal here was to decide on the most appropriate assessment which it failed to do. The tribunal will now face the (original) task of judging the chances of the ex-employee finding an equivalent pension and whether to take a ‘simplified approach’ or a ‘substantial loss approach’ according to the guidance laid out for employment tribunals, as this is the method for awarding pension loss payments.