Since 2004 if an employer fails to follow the statutory dispute resolution procedures, an employee’s dismissal will be automatically unfair. If the employee successfully brings a qualifying claim (e.g. unfair dismissal or discrimination) the Tribunal must (save in exceptional circumstances) uplift the employee’s award by between 10% and 50%.
In the recent case of Metrobus v Cook the EAT upheld a Tribunal’s decision to apply an uplift of 40% to unfair dismissal compensation.
Mr Cook was a driver. He had hurt his shoulder in a workplace accident and had been unable to drive since. Mr Cook was on the waiting list for corrective surgery but was unable to provide Metrobus with a date for his operation. He was dismissed on the grounds of capability.
Metrobus conceded that it had failed to comply with the standard disciplinary and dismissal procedure when it dismissed Mr Cook. It had not sent a “step 1” letter setting out the circumstances leading it to contemplate dismissal.
The Tribunal found that Mr Cook had been automatically unfairly dismissed. In light of the failure to follow statutory procedure, Mr Cook’s unfair dismissal award was uplifted by 40%. Metrobus appealed.
The Tribunal had found that the failures on the part of the employer were serious. Metrobus was a large employer with substantial resources yet had failed to comply with the procedures. The EAT held that the Tribunal was correct in linking the value of the uplift to the equity of the case and upheld the 40% uplift.
The EAT confirmed that the provisions for uplift are more penal than compensatory in nature. The correct test for an uplift in the top half of the range is whether there has been a clear breach of the procedure.
What this means for employers
This case illustrates that Tribunals will use their powers to make large uplifts in cases where an employer (particularly an employer which is large or has significant resources) has disregarded the statutory disciplinary and dismissal procedures. The more blameworthy an employer is in its failure, the larger the uplift is likely to be.