What constitutes unfair dismissal

Last year, the Employment Rights Tribunal (ERT) delivered its decision in Orlando Harris v Chefette Restaurants Limited, Claim No. ERT 65/2014. The claimant, Mr Harris, was employed by Chefette in the capacity of assistant manager for over 10 years. Chefette decided to terminate Mr Harris’ employment over the cashing of a cheque for BDS$40.00 in what they said was a breach of their cash-handling procedures as outlined in the terms and conditions of Mr Harris’ employment. Mr Harris was unable to account for how the cheque was “received, cashed and deposited.”

The basic question which occupied the Tribunal’s attention was whether the dismissal was fair, considering all the circumstances of the case and the provisions of the Employment Rights Act (ERA). They found that it was not and ordered compensation to be paid to Mr Harris. An appeal was filed by Chefette against the findings of the Tribunal. Fourteen grounds of appeal were set out in the notice of appeal but the Court of Appeal found that there were really only two questions that should occupy their attention: (1) “whether the ERT correctly interpreted and/or applied section 29 of the ERA;” and (2) “whether the ERT correctly calculated the compensation awarded to Mr Harris.”

Section 29 of the ERA essentially states that the employer must show the principal reason for dismissing the employee and that the reason must relate to the capabilities of the employee or the conduct of the employee. Once the reason is established and its basis, Section 29 goes on to provide for contemplation of whether the reason was sufficient and if the disciplinary rules in the Fourth Schedule to the Act were complied with. All of these things must go together in order for a dismissal to be considered fair.

The Court of Appeal found that the Tribunal is not bound to accept the reason given by the employer and duty required that they actually examine the evidence led during trial to determine the real reason for dismissal. Whether the ERT rightly concluded that the real reason for Mr Harris’ dismissal was “misappropriation” of funds rather than “failure to follow cash handling procedures,” was not a subject the Court of Appeal could look into, since Section 48 of the ERA allows for appeals on matters of law only. The court nevertheless felt the need to point out that the evidence had more than justified the finding of the Tribunal.

Also justified was the finding of the Tribunal that Chefette was required to follow the standard disciplinary procedures set out in the Fourth Schedule and not the modified procedures. The reasoning of both the Tribunal and the Court was that Chefette had already concluded its investigations prior to the first meeting with Mr Harris and the nature and tone of the meeting suggested that it was in fact a disciplinary hearing and not part of any ongoing investigation. Chefette was therefore legally bound to provide to Mr Harris a written statement of the charges against him, indicate that he could bring a friend to the meeting and give him a reasonable opportunity to respond. Ambushing him during the meeting was therefore in breach of the standard disciplinary procedures outlined in the ERA.

The Court of Appeal has also determined that the seriousness of any misconduct or the lack of capability of the employee is to be settled by reference to the terms and conditions of employment. Where the contract of employment does not expressly state that certain conduct is serious, then the court will examine the “intrinsic nature and quality of the misconduct or lack of capability.” That is a fancy way of saying that the court will examine the conduct or lack of capability in light of all the facts and circumstances of the particular case. Once it is determined to be sufficiently serious, then the evidence available to the employer is the next consideration. The employer must also conduct “as much investigation as is reasonable in all the circumstances.

The Tribunal had applied a test they extracted from English law, “the band of reasonable responses”; however, the Court of Appeal pointed out that no such test or principle of law exists in this jurisdiction. There is no question in the ERA of what a “reasonable employer” would do, the only question is whether the statutory requirements of the Fourth Schedule were complied with. Chefette’s dismissal of Mr Harris was found by the Court of Appeal to be unfair because the evidence on which they based their decision to dismiss was insufficient and they failed to apply progressive disciplinary action in terminating him for a first offence.

As to the question of compensation, Chefette got credit for the $11,540.88 notice pay that Mr Harris was paid when they fired him and the compensation awarded by the Tribunal was accordingly reduced by that amount. They still have to pay him $95,000 and change.

Source: (Alicia Archer is an attorney-at-law in private practice)

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