What were the basic facts?
Ms Burso was employed as a nanny by Mr Langley and Ms Carter for their two children from November 1999 to March 2004, when she was dismissed after an argument about a salary increase.
At around the same time, Ms Burso was involved in a car crash. As a result she was unable to work from 5 March to 12 July 2004, covering the whole of her notice period.
She complained to a tribunal, among other things, of unfair and wrongful dismissal.
What did the tribunal decide?
The tribunal agreed that she had been wrongfully dismissed because she was not given the eight weeks’ notice to which she was contractually entitled. It calculated her loss at £3,440 (eight weeks’ net pay).
In relation to the unfair dismissal claim, the tribunal calculated her compensatory award at £5,736. This did not include anything for the notice period because it had already been calculated as part of the wrongful dismissal award.
What did the parties argue on appeal?
Mr Langley appealed on the basis that the tribunal was wrong to assume that Ms Burso was entitled to full pay for the notice period. Instead, he argued she was only entitled to statutory sick pay – about £440.
Ms Burso relied, in part, on section 88 of the ERA which states that, if an employee with normal working hours is off work during the notice period because of sickness or injury, they are entitled to the normal rate of pay for that period.
She also cross appealed, relying on the decision in Norton Tool -v- Tewson, which said that it was good industrial relations practice for an employer to pay full pay in lieu of notice to an employee who was summarily dismissed.
The court also held in that case that, if an employer did not make a payment in lieu of notice, the employee was entitled to full pay for the notice period, without any reduction for any other monies they may have earned from any other source. Ms Burso said that Norton Tool applied to cases even where the employee was unable to work the period of notice because of sickness.
What did the EAT decide?
A majority of the EAT found in favour of Mr Langley, saying that the sick pay provision in the contract was clear, and there was no justification for concluding that it would not apply during the notice period. Although Mr Langley had paid Ms Burso in full for sick days in the past, the EAT said these were ex gratia payments.
The appeal tribunal also said that Ms Burso could not rely on section 88 ERA because of section 87(4). This says that section 88 does not apply if the contractual notice period exceeds the statutory minimum notice period by more than a week (as was the case here).
With regard to Norton Tool, a majority of the EAT held that it was no longer good law. Relying on the case of Dunnachie -v- Kingston, it said that “the principle is that the tribunal must award sums which reflect the loss resulting from the dismissal; it is not legitimate to award sums which are additional to such loss.”
It concluded that section 123 simply does not allow compensation for a failure to comply with good industrial relations practice. It therefore awarded Ms Burso eight weeks’ statutory sick pay as opposed to net pay. It also gave Ms Burso the right to appeal the Norton Tool point.