Business and HR Professionals must avoid getting things Wrong when they are Right

The coronavirus pandemic and the resulting economic crisis has brought with it the inevitable consequence of high levels of redundancies as organisation after organisation struggles to survive in the current economic climate. When a business finds itself in the unenviable position of having to make some of their employees redundant, HR professionals must be alert to the potential for hidden discrimination, above all else the redundancy and dismissal process must be followed and must be fair and must be seen to be fair. HR professionals must keep in mind that all the provisions of current employment law are still applicable.

HR professionals have a duty to protect both the business and the staff from ill-judged discrimination and illegal practices. All processes must be followed meticulously, however challenging it may be in the current circumstances, especially those that have significant impact on the employee such as dismissal or redundancy. 

Nick McEwen, an associate in the corporate and commercial team, points out “failure to follow the steps laid down in the Employment Rights Act 1996 can lead claims of unfair dismissal. However, disciplinary records and appraisals can be referred to when making redundancy selections but settling old scores and getting rid of troublemakers without validatory evidence or following the correct procedures is not permitted.” 

The recent case involving AmTrust and their employee Brendan Barry starkly demonstrates that the consequences of failing to scrupulously observe the correct procedures can have a negative impact on the business.   Mr. Barry worked as an in-house lawyer as a professional indemnity claims manager was dismissed for a number of breaches including covertly recording meetings with his colleagues which he started doing in response to a colleague being made his manager which had the unwelcome effect of restricting him; he hoped that his covert recordings may have captured evidence that had the potential, in the future, support a claim for constructive dismissal as he strongly believed he had been treated badly.   He also sent 44 emails containing privileged, sensitive and confidential information from work to a personal account following serious allegations made by both a client and a colleague regarding his conduct.  Mr. Barry believed that the emails would assist him in preparing a defence against the allegations.  This action was noticed by the IT department and Mr. Barry was suspended, despite the fact that there was no express clause in his contract prohibiting such an action.  He was dismissed shortly afterwards.

The employment judge considered that AmTrust had not used a “fair or reasonable process.” Finding that significant information was not available to the chief executive, who was the decision-maker regarding Mr. Barry.  The judge also found that the process employed between the date of dismissal 13 February and the appeal decision on 7 June upholding the dismissal was also not fair.  The Judge further found that had AmTrust followed the required procedures Mr. Barry would almost certainly have been able to be dismissed fairly due to “The claimant’s blameworthy conduct is a significant reason for the dismissal.” The judge rejected Mr Barry’s claim for breach of contract, finding his conduct in sending the emails and in covertly recording staff to be repudiatory breaches of contract.  When making an award to Mr. Barry for unfair dismissal he significantly reduced the award using the “Polkey” principle – a reference to case law where a dismissal was unfair and the court must decide, when considering a compensatory award, whether the dismissal would have proceeded in any event regardless of the unfairness of the procedures – the award was reduced by 80% for the unfairness, elevated by 20% for the failure of the business to apply the ACAS code and reduced by 25% Mr Barry’s contributory fault in sending the emails without permission without ensuring that the GDPR requirements were observed, as well as sending more data than needed at the fact-finding meeting.

The lawyers in Giambrone’s employment law team advise all HR professionals to seek legal advice prior to embarking on a redundancy programme to ensure that there are no breaches of oversights that could lead to the allegations of unfair dismissal with the resulting loss of time and money to a business already under pressure.

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