Loosely worded

Loosley v Social Action for Health

Yet another case on the employer’s “get-out” clause under the statutory dispute procedures. This time the Employment Appeal Tribunal (EAT) said in Loosley v Social Action for Health that the redundancy was fair even though the employer did not follow a fair procedure, because the employee would have been dismissed anyway.

Basic facts

As a mental health worker, Mr Loosley undertook representation and development work for Social Action for Health. It received its funding from the local authority, but Tower Hamlets decided to withdraw the funding from March 2005, and gave Mr Loosley six months’ warning of redundancy.

During that time, SAH employed another worker, Mr Walker, to concentrate more on the development aspect of its work. Tower Hamlets made clear that it preferred to work with him and when work on another temporary project became available, post March 2005, it informed Mr Walker but not Mr Loosley.

SAH used funds from other sources to keep Mr Loosley in post for as long as it could, but when the funds ran out, he was made redundant. He argued that he had not been consulted properly and should have been considered for the temporary development post as suitable, alternative employment.

The law

Section 98A of the Employment Rights Act 1996 (ERA) states that if an employer dismisses an employee and does not follow one of the procedures under the statutory dispute regulations, the dismissal is automatically unfair.

However, if the employer observes the dismissal and disciplinary procedure (DDP), section 98A(2) says that a breach of another procedure will not “by itself” make their action unreasonable if the employer can show they would have dismissed the employee anyway.

Section 98(4) states that, bearing in mind the reason given by the employer for the dismissal, tribunals have to decide whether in the circumstances, the employer acted reasonably or unreasonably overall.

Tribunal decision

The employment tribunal agreed that Mr Loosley was qualified to do the job and should have been considered for the role. However, it decided that he would not have been successful because both SAH and Tower Hamlet thought Mr Walker was better suited.

That did not make the decision unfair, according to the tribunal, because SAH’s opinion of his ability to do the job was “one of the circumstances to be taken into account in assessing the fairness of the decision not to offer him that position” under section 98(4) of the ERA.

EAT decision

The EAT decided that the term “procedure” under the ERA had a broad meaning; there had been a procedural failure in this case; and that the employer’s failure to draw Mr Loosley’s attention to a job opportunity fell into that category. Section 98A of the ERA therefore applied.

But could the employer use the escape clause of section 98A(2)? In this case the answer was yes. The EAT noted that it was for the employer to prove, on the balance of probabilities, that they would have dismissed the employee anyway, even if there had not been a procedural failure. And it emphasized that the more serious the breach, the more convincing the evidence had to be.

It concluded that “where the result of consultation is an obvious one, there may be something to be said for an employer not requiring the formality of consultation, if the employer’s mind is appropriately made up.” Although unusual, that was the case here and accordingly, the tribunal was right to decide that the dismissal was fair because of the procedural failure to consult.

However, it said that it would hope that in most cases, tribunals would find it unfair not to tell an employee of “alternative job opportunities that were within the employee’s competence and which might have been open to him and perhaps to make a dismissal unfair.