Last April’s decision of the Isle of Man Employment and Equality Tribunal (the “Tribunal”) in Deborah Wendy Lace v Langham Limited (Case 20/148) provides a timely reminder to employers to ensure they are complying with their obligations under the Employment Act 2006 (the “Act”) in relation to written particulars and also serves to illustrate some of the key points on following a fair dismissal procedure.
Case Summary
Deborah Lace (the “Complainant”) commenced proceedings alleging unfair dismissal against her former employer Langham Limited (the “Respondent”). Her employment commenced on 1 October 2008 and ended on 23 September 2020. The Complainant was employed as a Housekeeper working at the home of Mr Barrowman and Baroness Mone earning just under £42,000 per year, with a discretionary bonus. Notice of termination was given to the Complainant on 23 June 2020, however no reason was given and there was no process followed prior to dismissal. The Respondent denied that the dismissal was unfair.
Mr Barrowman was a director of the Respondent company, together with Mr Timothy Eve (“Mr Eve”), and Mr Anthony Page was company secretary. Baroness Mone had no connection with the Respondent company but had rather been described as the “lady of the house”, although she was ultimately involved in the decision to dismiss the Complainant and gave notice to terminate her employment.
Besides the claim of unfair dismissal, the Complainant also complained that she had not been provided with written terms and conditions when she started working for the Respondent or, indeed, for some time after that. According to the company, a contract of employment was “re-issued” to her on 26 February 2020, but the directors were unable to produce any contract of employment for the Complainant or written particulars prior to that date – a state of affairs which did not help the Respondent’s case.
Concerning the reason for termination, the Respondent argued that the Complainant was aware her role was reducing/coming to an end following conversations where the Complainant was told that Mr Barrowman and Baroness Mone were to move to Jersey and the house where the Complainant mainly performed her services was to be sold. On 23 June 2020, the Complainant was handed her notice which was to be served out on “garden leave” i.e. not requiring her to work.
Emphasising the importance of clear communication, the Respondent’s position was that the Complainant had been informed on many occasions in the 6 – 8 weeks leading up to termination that her job was going to become redundant. The Complainant, however, asserted that, whether the estate was sold or not, she had been led to believe there was still a job for her.
In the Tribunal, Mr Eve accepted that, procedurally, the termination process had not been carried out especially well and there had been no mention of redundancy in the letter of 23 June 2020. He was unable to explain why the Complainant had been dismissed except to say that she was “redundant”. He confirmed that Baroness Mone was not a director nor involved with the Respondent company and that ideally Mr Barrowman should have handled the meeting on 23 June 2020 and handed over the letter giving notice to terminate the Complainant’s employment.
The Tribunal confirmed that where the fairness of a dismissal is challenged, the burden of proof is on the Respondent to show one of the specified fair reasons justifying termination and that the dismissal was fair in all the circumstances. Under the relevant legislation, employment can be fairly terminated on the grounds of (amongst other reasons) redundancy which was the reason given by the Respondent for ending the employment relationship with the Complainant. However, the Complainant asserted that her employment ended because of a breakdown in the relationship between herself and Baroness Mone.
Termination of employment on the grounds of redundancy must still be carried out by following a fair procedure. Consideration of the relevant case law is helpful to understand what constitutes a reasonable employer approach.
The Decision
The Tribunal noted that the Respondent company had the financial resources to seek advice from a Manx advocate, had the directors wanted to do so. Therefore, there was no reason for an employer such as the Respondent to get the procedure so badly wrong! The 23 June 2020 letter never mentioned redundancy, no redundancy payment was offered, nor was there any explanation as to how it would be calculated. In essence, “redundancy” was never contemplated.
The Tribunal found that the Complainant was not dismissed because of redundancy but because of the breakdown in the relationship between her and Baroness Mone. The Respondent, having failed to establish that redundancy was the principal reason, failed to show that the Complainant’s dismissal was for a potentially fair reason. Even if the Respondent had proved that the dismissal was genuinely due to redundancy, it would still have been found to be unfair because of the procedural shortcomings.
The Tribunal awarded a total award of £22,515 in favour of the Complainant. This included £2,160 for the Respondent’s failure to give the Complainant terms and conditions of her employment as required under the Act, with the Tribunal referring to this as a “serious breach of the statutory obligation”, notwithstanding that the Respondent had ‘rectified’ the position in February 2020. The Act requires written terms and particulars of employment to be provided no later than four weeks of commencement of employment.
This is an example of a case in which the employer failed to get the basics right by not issuing appropriate employment documentation and not considering the fundamentals of dismissing fairly and following a proper procedure. The fact and consequences of the litigation could have been avoided by taking advice and by the company informing itself of the legal position with consequent saving of much trouble and expense.
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