Should a claim be struck out where there is no realistic chance of compensation?

In the recent case of Evans v London Borough of Brent the Employment Appeal Tribunal considered whether an Employment Tribunal was correct to strike out an unfair dismissal claim where Dr Evans had no prospect of being awarded any compensation, although his dismissal may have been procedurally unfair.

The facts

Back in 2009, Dr Evans was working as a deputy headteacher and had been doing so for 12 years. Allegations were brought against him that he had received unlawful bonuses, allowed and participated in the payment of allowances relating to the retirement of another member of staff, and received payments for work managing a project that should not have been made or accepted. On 15 October 2009, Dr Evans was told that a disciplinary hearing would take place on 3 November 2009. On 21 October he received a copy of the investigation report and annexes, which amounted to over 800 pages. Dr Evans applied for a postponement of the disciplinary hearing, firstly because he wanted his sister to accompany him, as she had done to an earlier interview, but she would be abroad on 3 November. Secondly, he did not consider he had been given sufficient time to master the paperwork. His employer refused the application for a postponement and a disciplinary hearing proceeded in Dr Evans’ absence. He was dismissed for gross misconduct.

What happened next

Dr Evans brought a claim for unfair dismissal, but the proceedings were put on hold pending the outcome of criminal proceedings that had been brought against him and other members of school staff. The criminal proceedings concluded in 2013 when the prosecution offered no evidence against Dr Evans. Subsequent to the criminal proceedings, the London Borough of Brent issued High Court proceedings against Dr Evans. The High Court judgment was made in 2018 and found that Dr Evans had received over £250,000 in overpayments. However, the majority of his ex-employer’s claim in respect of that sum was time barred and the judgment against him was therefore limited to £46,091.00, including interest.

The Employment Tribunal’s decision

Nearly 10 years after his dismissal, Dr Evans’ claim for unfair dismissal could finally be dealt with by the Employment Tribunal. A preliminary hearing was listed to determine whether Dr Evans’ claim should be struck out. It was accepted before the Employment Tribunal that the High Court judgment was binding on the parties and would therefore also bind the Tribunal.

The Employment Tribunal struck out the unfair dismissal claim. It ruled that there were no reasonable prospects of finding that the employer did not have a reasonable belief in the misconduct, or that dismissal was outside the range of reasonable responses. Although the disciplinary process was arguably procedurally unfair due to the refusal to postpone the disciplinary hearing, the Tribunal also struck this ground out, as there was little prospect that any basic or compensatory award would be reduced by less than 100%, either because a fair process would have made no difference to the outcome, or due to Dr Evans having entirely contributed to his own downfall (see our previous article on contributory fault here). Also, in view of the irrecoverable overpayments of over £200,000, the Tribunal felt it would not have been just and equitable to make any payment of compensation to him. Finally, the Tribunal said that the interests of justice, including the judicial resources and the cost to the public funds did not warrant the matter continuing.

The decision on appeal

Dr Evans appealed to the Employment Appeal Tribunal and his appeal was upheld. It was found that the Employment Tribunal had failed to acknowledge the potential value of a finding of unfair dismissal, even if it would not result in a financial award. Dr Evans was entitled to ask a Tribunal to make such a finding. It could not be said that a finding of unfair dismissal would be of no value, or that it is not in the interests of justice to hold an employer to account for procedural unfairness in deciding to dismiss a long-serving employee. This matter will now go back to the Employment Tribunal to consider the issue of whether a fair procedure was followed.

Conclusion

This case demonstrates the importance of procedural fairness. It seems likely that if Dr Evans had been given a little more time to prepare for his disciplinary hearing back in 2009 that things may have been resolved by now.

Also, importantly, the case emphasises the right of ex-employees to pursue claims for unfair dismissal even where they stand no or very little chance of any financial award. Although most Claimants are seeking compensation, for some the mere ability to have a finding made that they were unfairly dismissed will be enough reason for them to pursue a claim. This is different from other forms of litigation where the remedies are purely money-based. This, together with the Tribunals’ different approach to costs, are important factors for employers to bear in mind.

If employers fail to act fairly and reasonably when conducting procedures, they risk time consuming and costly Employment Tribunal proceedings. We can advise and assist you to ensure that you follow the correct processes.

(This article was corrected on 7 June 2021. The previous version of the article had stated that Dr Evans had pleaded guilty to the criminal charges against him, which was not the case).