The continued uncertainty surrounding the scope and application of the statutory dispute resolution procedures is illustrated by two recent judgments delivered 6 weeks apart which came to opposing conclusions as to whether delay in the completion of a dismissal procedure amounted to the non-completion of the procedure thus rendering a dismissal automatically unfair. The final word (at least for now) rests with the Court of Appeal in the judgment of Selverjan v Wilmot and Others: delay in the conduct of the dismissal process does not mean that the process was not completed and therefore the mere fact of delay when the key steps of the procedure have still been followed is not sufficient to give rise to an automatically unfair dismissal.
Under the statutory dismissal procedure regime, a dismissal is automatically unfair if “the procedure has not been completed, and…the non-completion of the procedure is wholly or mainly attributable to failure by the employer to comply with its requirements.”
On 12 June 2008 the EAT handed down its judgment in the case of Yorkshire Housing Limited v Swanson. Ms Swanson was employed by Yorkshire Housing Limited as a housing officer. Following an investigation into allegations of fraudulent conduct on the part of Ms Swanson, a disciplinary hearing was held on 17 February 2005. The disciplining manager decided to adjourn the hearing before reaching his decision and it was not until some 5 months later that the hearing was reconvened and Ms Swanson was dismissed for gross misconduct. She was given the right of appeal and an appeal hearing was subsequently conducted.
The Employment Tribunal had held that the delay of 5 months between the meeting and the notification to Ms Swanson of her summary dismissal for gross misconduct was unreasonable and indefensible. A general requirement of the statutory disciplinary procedures is that each step and action under the procedure must be taken without unreasonable delay (Part 3 of Schedule 2 to the Employment Act 2002). The Tribunal went on to hold that an employee will be considered to have been automatically unfairly dismissed if the statutory disciplinary procedure has not been completed and if the non-completion of that procedure is wholly or mainly attributable to failure by the employer to comply with its requirements (Section 98A(1) of the Employment Rights Act 1996).
The employer argued before the EAT that the statutory disciplinary procedure had in fact been completed in that each of the three steps had taken place, albeit over a rather long timescale, and therefore Ms Swanson was not automatically unfairly dismissed. Consistent with the line taken in some previous EAT judgments, the EAT rejected this argument. The EAT found that there is no regulation which makes express provision as to when the disciplinary procedure is to be "taken to be completed". Regulation 12 alone refers to "non-completion" and, in the context in which those words appear, the EAT found that regulation 12 made provision for the consequences of an employer's failure to comply with the requirements of the statutory procedures including, expressly, the general requirement not to delay unreasonably. Such a failure was therefore to be regarded as a non-completion of the procedure.
This line of authority was overruled by the Court of Appeal in the Selverajan judgment handed down on 23 July 2008. This was the first occasion on which the issue had come before the Court of Appeal. The facts of the case involved a similar period of delay to that considered in Yorkshire Housing: initial investigations into misconduct led to dismissals 2 months later, but there was a delay of a further 4 months before the appeals were determined.
It was argued by the employer that even though there had been a delay in so doing, the three-stage statutory process had nonetheless been completed. The Court of Appeal agreed. “Completed” is an ordinary English word. It has a settled meaning in the English language and it was not given any meaning in the legislation encompassing the statutory dismissal procedure regime. Once the appeal had been determined there were no further steps for the employer to take and so the process had duly been completed.
There was a distinction between non-completion of the procedure and non-compliance with the requirements of the procedure. Completion of the procedure is not subject to compliance with general requirements: all steps in the procedure may be completed even if there has been non-compliance with requirements such as timetabling standards. As the three steps had taken place, the process had been completed and the delay in so doing could not lead to a finding of automatically unfair dismissal.
Note however that this judgment does not give employers licence to drag out their dismissal procedures unreasonably. An employee faced with an unreasonable delay may issue proceedings prior to completion of the procedure and argue for an uplift in compensation even if the procedure is subsequently completed, and/or may elect not to complete the procedure and seek to hold the employer responsible for the non-completion and assert there has been an automatically unfair dismissal. In any event, employers should not lose sight of the substantive law of unfair dismissal; even if the particular circumstances fell short of automatic unfairness or enhanced compensation, delay could still amount to a failure to follow a fair procedure and so lead to a finding of ordinary unfairness.