Dear Auntie

I’m HR Director of a small Hedge Fund. A while ago, when I was on holiday, a Trader, John, and his assistant, Matthew, had a full-blown slanging match which, unbelievably, culminated in a fist fight in the middle of the office. The CEO caught the tail-end of it and sacked John on the spot, since he was the more senior employee and his behaviour showed such poor judgement. Since then witnesses have told me that Matthew was “half-cut” after a liquid lunch and started the argument by making obscene comments about John’s wife. He also threw the first punch. He’s admitted that he behaved badly, grovelled and been given a final written warning.

John is now suing us for unfair dismissal. I know that the dismissal technically is unfair but his claim form says he wants to be reinstated to his job. Surely he can’t do this? We’ve appointed someone new now and anyway it would be impossible for him and Matthew to work together. Please tell me this can’t happen!

Yours,

Rattled about Reinstatement

 

Dear Rattled

I can well understand your concern. The prospect of re-employing a disgruntled and, frankly, unwanted employee is rarely appealing and, in cases like yours, could be disastrous.

First, the bad news: it’s possible for an employer to be ordered to reinstate an unfairly dismissed employee to the same position, or to re-employ them on no less favourable terms elsewhere in the business (or in an associated company). All employees who succeed in showing unfair dismissal are entitled to seek reinstatement or re-engagement as well compensation for any losses suffered. If granted, the effect in law is as if they have never been dismissed.

However, the good news is that reinstatement or re-engagement is not granted by the Tribunal as a matter of course. In fact, in the year 2004-2005, of 3,493 successful unfair dismissal claims brought, only 14 (or about 0.4%) resulted in an order for reinstatement or re-engagement. For 2003-2004, reinstatement was ordered in even fewer successful cases – 11 out of 4,363 or about 0.25%. These very low numbers may partly be because few employees seek the remedy but, while there are no statistics showing how many requests result in an order being made, the infrequency of the order is likely also to reflect the various hurdles which an employee must overcome along the way.

Before making an order for reinstatement a tribunal must consider not only the employee’s wishes, but also whether it is practicable for the employer to comply with the order. In your case, I think that this factor will work in your favour. You need not show that it is impossible for you to comply with order for reinstatement or re-engagement: it is a matter of what is practicable at the relevant time. The Tribunal will take account of the fact that you are a small business where it will be necessary for John and Matthew to interact. You may also be able to show that the incident has caused you to lose all faith in John’s judgement and that you simply do not have confidence in him.

A Tribunal will not always take into account the fact that a permanent replacement has been hired, even if reinstatement would then lead to a redundancy situation. However, in your case, you are likely to be able to show that it was not feasible, in view of John’s role, for you to re-allocate John’s duties temporarily or to engage a temporary employee, so the hire of the replacement will be relevant.

You say that you recognise that the dismissal technically is unfair, presumably because of the failure to follow any process. In cases where the unfairness is merely procedural and the employee has caused or contributed to his dismissal, reinstatement will not normally be ordered. However, your case is not completely clear cut. While fighting in the office will almost always justify dismissal, there are mitigating circumstances here, which you failed to explore before dismissal. Moreover, your treatment of the two offenders is not consistent, given that Matthew has only received a final written warning despite the aggravating factors to his case. This may lead to a finding of substantive (not just procedural) unfairness, which will affect the level of damages (though some reduction will almost certainly be made for contributory fault). Nevertheless, in considering reinstatement, it’s still fair to say that John contributed to his dismissal, which will deter the Tribunal from making the order which he has requested.

On balance, it seems unlikely that John will achieve his requested order for reinstatement. Even if the worst came to the worst and reinstatement was ordered, you could consider whether to comply with that order. In doing so, you could be liable for an award of additional compensation ranging between £7,280 and £14,560 (the minimum and maximum award are reviewed each year). This additional compensation, however, may be a cheap price to pay compared to the cost of re-employing John. This is true both in terms of the direct costs of re-employment such as salary, bonus etc and the business impact of a disruptive employee.

One way or another, if you’re prepared to pay the price, you can be certain that John is gone for good – a case of “goodbye” not “au revoir”.

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