ÐÇ¿Õ´«Ã½

The fundamental legal principles relating to dismissal, and the concept of what is reasonable, have been with us since the 1970s. But statutory dismissal and disciplinary procedures, which will come into force next year, mean many employers will need to consider carefully their dismissal procedures.

The new statutory disciplinary and dismissal procedures state that if an employer dismisses an employee without following stipulated statutory procedure, the dismissal will be automatically unfair.

The new statutory procedure will apply not only to dismissals but also to the administration of a formal warning. Where an employer issues a formal warning without complying with the procedure, there is a risk that an employee could resign and claim constructive dismissal – whatever his or her contract, as the new procedure will be implied in every contract of employment .

Employers will have to address the issue of what constitutes a "formal warning". In London Underground v Ferenc-Batchelor, the Employment Appeal Tribunal found that an "informal warning" will be regarded as a "formal warning" if it has the characteristics of a formal warning, irrespective of how it is described by the employer. According to the tribunal, a warning is formal if it:

• goes on the employee's disciplinary record
  
• has a formal timescale attached to it
  
• will be taken into account in the future if there is a similar offence.

This is irrespective of the label attached to it at the time.

Even if an employer complies with the new statutory procedure, the dismissal may still be unfair if an employment tribunal finds that the employer has acted unreasonably.

To comply with the duty of reasonableness, an employer must undertake a proper investigation into any allegation of misconduct. However, it seems it is not an essential part of a fair investigation to allow an employee accused of misconduct the right to cross-examine witnesses. In Santamera v Express Cargo Forwarding, the Employment Appeal Tribunal decided that even though the employer had refused to allow an employee the right to cross-examine witnesses during a disciplinary hearing, it had nonetheless carried out a reasonable investigation. In each case, a tribunal must decide with reference to the facts before it whether the employer's procedure had been reasonable.

Another case employers should know about is Dunnachie v Kingston upon Hull City Council. In that case, the Employment Appeal Tribunal held that the trend of tribunals to award damages for personal injuries, aggravation and injury to feelings caused by the manner and/or the fact of dismissal was wrong. Compensation for unfair dismissal, the Employment Appeal Tribunal said, is limited to economic loss only.