Not in my name
Date: 30 October 2009
Authors: Elliot Gold
Issue: Vol 159, Issue 7391
Categories: Features, Employment
When a third party demands the removal of a worker employed by a supplier, both the worker and the supplier enter a type of twilight-zone. It may bring to an end the employment relationship between them but without the safeguards of the normal disciplinary processes.
Both parties may feel hard done-by and the supplier may find itself entangled in a claim for unfair dismissal due to decisions made by the third party that are beyond its control.
Drawing the strands together
The law relating to when such a dismissal will be unfair has bounced around the Employment Appeal Tribunal (EAT) and the Court of Appeal. Emerging from what amounts almost to a daisy chain of cases, each referring to one other, the EAT in Henderson v CST Limited [2009] UKEAT/0209/09/SM has drawn together all the strands, adding a few fibres of its own.
The upshot is that a company supplying its workers to a third party and who is told by that third party to remove one of them will at least have to consider taking action to protect their worker and, perhaps, even “pull out all the stops” to do so.
All of this goes back to the case of Scott Packing & Warehousing Co Ltd v Paterson [1978] IRLR 166. A packing company supplied a worker to the US Navy, which was its best client/customer.
For reasons seemingly associated with the possible taking of a cigarette lighter, the US Navy told Scott Packing that they would no longer allow the worker to work for them. Scott Packing considered this to be an ultimatum and that if they refused, their entire contract could be terminated.
It withdrew its employee and then, having no other work for him, dismissed him.
The EAT held that the dismissal was due to the ultimatum so that it was for “some other substantial reason”. It added that: “An employer cannot be held to have acted unreasonably if he bows to the demands of his best customer…even if the customer’s motive for seeking the removal of the employee was suspect.”
Conflation
This did seem to conflate two matters. The first was that the third party’s demand for the removal of the employee of itself made reasonable the employer’s decision to remove the employee.
The second was the decision to remove the employee with the later decision to dismiss. Predictably, therefore, a spike arose after the decision of Dobie v Burns International Security Services (UK) Ltd [1984] IRLE 329, which held that whether such a dismissal was or was not fair required consideration of the injustice to the employee—and that the extent of that injustice was a “very important factor” which the employer had to take into account. Such as that is should be uncontroversial—it is essentially the test as is now expressed in Employment Rights Act 1996, s 98(4).
It was unfortunate that the case of Scott Packing was not referred to in Dobie. In any event, what might have been a fairly straightforward point continued to perplex employers.
Substantively fair?
In the recent case of Henderson v CST, the EAT said that it followed from the language of s 98(4) that if an employer had done everything that they reasonably could to avoid or mitigate the injustice brought about by the stance of the third-party client—most obviously by trying to get them to change their mind and, if that were not possible, to find alternative work for the employee, then a failure resulting in the dismissal of the employee would be, for the purposes of the statute, substantively fair.
What is reasonable will depend upon the circumstances. For someone who is fairly low down the chain and who has worked for only a short period of time, the amount of effort required may be limited. Where the situation would, however, result in patent injustice due to factors such as length of service or unreasonableness of the demand, it might be necessary for an employer to “pull out all the stops”.
The following examples may illustrate the approach of the tribunals:
An employer should be certain that the third party has actually made such an ultimatum—and that it leads such evidence if it finds itself in the employment tribunal. In Grootcon (UK) Ltd v Keld [1984] IRLR 302 not only did the respondent not lead any direct evidence of a contractual term that the third party had the right to demand the withdrawal or approval of any workers supplied, it also failed to lead sufficient evidence as to the demand for withdrawal itself. It must be remembered that the burden for proving the “some other substantial reason” remains on the employer.
It may be that the employer is unable to take any steps to avoid the inevitable decision to withdraw their employee. In Davenport v Tamptonholme for Elderly People [1999] EAT 14/1/99, the tribunal found that the employer had no option but to comply with such an instruction. The decision to dismiss was fair.
Employers should, however, try to follow good practice. A failure by an employer, first to exercise an arbitration clause in a contract between it and the third party which otherwise allowed the third party to demand the withdrawal of a worker and, second, to consult with the worker over the situation meant that the decision to withdraw and then to dismiss him was unfair: Community Living Concepts Ltd v Thomas Connor Aitken [2002] EAT/1088/01.
Where an employer fails to give any consideration to the injustice that would be caused to its employee when taking the decision to withdraw and them to dismiss him, this may render the dismissal unfair—even where consideration may result in no difference to the decision.
An employer dismissed unfairly where it had given no consideration to reorganising its business so that the employee could have taken over the job of the person who would have replaced him or perhaps reorganising jobs so that the employee could have worked for another customer: Greenwood v Whiteghyll Plastics [2007] UKEAT/0219/07/MAA.
Where an employer consulted with its employee over the third party’s demand and had attended meetings with the third party to try and change its mind, this was enough to ensure that the final dismissal was fair notwithstanding that the employer had not sought to object to higher persons within the third party: Martin v JFX Express [2004] EATS/0010/04.
Where an employer had made some efforts but failed to change the mind of the third-party, it had acted reasonably in taking steps to try and offer the employee alternative employment—even though it was more junior and less well-paid: KCA Drilling Ltd v Breeds [2000] EAT/130/00.
Potential difficulties
Difficulties for employers may continue to arise where the demand of the third party offends against discrimination legislation or, as in the case of Henderson, where third parties request the removal of workers based upon criminal record checks.
In relation to work relating to young or vulnerable persons, organisations may come into receipt of “additional information” released confidentially as part of an enhanced criminal record certificate where they are not permitted to inform anyone even as to the existence of such material.
In any event, an employer in a situation where a third party demands the removal of one of their employees would be well advised to consider the injustice that would result, whether they can take any steps to change the decision and, if not, whether they can do something else in the form of offering alternative employment.
Where an employer has “done their best without success” to avoid or mitigate the injustice caused by the stance of a third party, an eventual decision to dismiss should be fair. Whether the employer has or has not “done their best” is likely to be the contested point.
Elliot Gold is a barrister at 5 Essex Court Chambers.
E-mail: Gold@5essexcourt.co.uk
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