Extending the effective date of termination in cases of gross misconduct

Lancaster and Duke Limited v Ms V Wileman

Summary

Following a recent decision from the Employment Appeal Tribunal (EAT) it has been clarified that when an employer has a genuine entitlement to summarily dismiss an employee on the cusp of accruing 2 years’ service because of their conduct, the employee is not entitled to rely on the provision in the Employment Rights Act 1996 (ERA) about adding on statutory notice to their length of service to determine whether they have the requisite service to enable them to bring a claim of unfair dismissal.

Background

Ms V Wileman (the Claimant) was employed as a recruitment consultant for a small employment agency business (the Respondent). Two days before completing two years’ service with the Respondent, the Claimant was dismissed (summarily) for gross misconduct. Subsequently she lodged a claim for unfair dismissal which the Respondent disputed, referring to the minimum requirement of two years of service which the Claimant did not have.

The Claimant argued that her length of service could be extended by the provision under S.97(2) ERA. This sets out that an employee who is dismissed in the absence of notice can in some circumstances artificially extend the effective date of termination to the date on which the proper statutory notice would have expired. S.86 ERA establishes a statutory minimum notice period of one week for an employee with more than 1 month and up to 2 years’ service, which in this case would have brought the Claimant’s service over the requisite 2 years, therefore allowing her to proceed with a claim of unfair dismissal. However S.86 also preserves an employer’s right to dismiss without notice where there has been gross misconduct.

At first instance the Employment Tribunal agreed with the Claimant and accepted that she had sufficient service to bring an unfair dismissal claim.

Appeal at the EAT

The Respondent appealed and the EAT upheld the appeal.

Although s.97(2) may allow for the effective date of termination to be deemed a later date where no notice was given, this provision will always be subject to s.86(6) and the employer’s right to give no notice. Effectively this means that there is no extension of length of service in cases of gross misconduct. As the Tribunal had not made a specific finding on whether the Claimant was guilty of gross misconduct, it was not possible to apply the principle at hand and the case was therefore remitted to the Tribunal.

Comment

Although the situation may not be one which is common, the decision comes as reassurance to those employers who dismiss employees close to their 2nd anniversary. Providing the employer was entitled to dismiss the employee for gross misconduct, the employee will not be entitled to add notice to take their length of service over 2 years and bring a claim of unfair dismissal. However an employer can’t just label a dismissal as a gross misconduct one in order to take the benefit of this decision – a Tribunal will look at whether there actually was an entitlement to dismiss for gross misconduct before ruling out the extension of service on that ground.

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