SUPREME COURT ON EMPLOYMENT

14 Dec, 2011

The Supreme Court has confirmed that failure to follow a contractual disciplinary procedure cannot be used to circumvent the unfair dismissal process.

 

In the case Edwards v Chesterfield Royal Hospital NHS Foundation Trust; Botham v Ministry of Defence [2011] UKSC 58 (Link to judgment: http://www.supremecourt.gov.uk/docs/UKSC_2010_0122_Judgment.pdf), the Supreme Court ruled that it was not open to an employee, who had been dismissed for professional misconduct, to seek damages in the High Court based on breach of the disciplinary procedures incorporated into his contract of employment. Parliament has already provided an avenue for employees to complain about their employer’s conduct in the unfair dismissal regime which has a tight time limit for bringing claims and a financial cap on damages.

 

Against that background, the Supreme Court held, by a majority, that it would be wrong in principle for the Courts to allow a claim for breach of contract based on the manner of dismissal to be pursued. Such a claim would conflict with and undermine the unfair dismissal regime.

 

Rachael Heenan, Partner of DAC Beachcroft LLP, the Trust’s solicitors said: “The outcome is good news for any employer regardless of their sector, especially those with contractual disciplinary procedures and high earning employees whose losses would otherwise exceed the statutory cap for unfair dismissal. Had this appeal not been successful, employers would have been continually vulnerable to the possibility of employees trying to get around the compensation cap or time limit in unfair dismissal claims by claiming for a breach of procedure.”

 

Mr Edwards alleged that his disciplinary panel was wrongly constituted in breach of contract and that, as a result, the panel made adverse findings against him which caused him reputational damage. In a claim for unfair dismissal in the employment tribunal he would have been limited to damages comprising a basic award (maximum £12,000) plus a compensatory award (maximum £68,400). In the High Court, he claimed financial losses to his retirement of more than £3.8 million.

 

Mark Sutton QC and Marcus Pilgerstorfer of Old Square Chambers, instructed by DAC Beachcroft LLP, represented Chesterfield Royal Hospital NHS Foundation Trust in its successful appeal before the Supreme Court.

 

Picture: UK Supreme Court

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