Thames Regional Health Authority

It must therefore be asked why more employees are not re-employed when they have been unfairly dismissed. Firstly, it should be acknowledged that often employees simply will not want to go back to work for employers who have treated them badly. There has been some discussion over the role of ACAS conciliation officers in the question of re-employment. Conciliation officers are under a statutory duty to promote a settlement of a dispute, and seek to promote the reinstatement or re-engagement of the complainant by the employer, or by a successor of the employer or by an associated employer25.

ACAS stressed in its 1994 annual report that the circumstances of many cases often cause the parties to feel that such a remedy is inappropriate. 26 It goes on to stress that 're-employment is more likely to be a possibility if talks can commence with the parties soon after the dismissal has occurred'. There have been a number of criticisms of ACAS and the tribunal system in the context of the low level of re-employment following unfair dismissal claims. The most comprehensive analysis of the issue was that carried out by Dickens et al.,27who demonstrated that there did appear to be a higher level of desire among applicants for reinstatement than was borne out by the percentage of applicants who were actually reinstated.

They also demonstrated that the proportion of conciliated settlements that involve reinstatement has declined. The study also revealed that over a quarter of employers who made a settlement did so because they admitted that they had not followed the correct procedure, and there are strong arguments that there should be more orders of reinstatement or re-engagement.

Nevertheless, if the law provides for reinstatement, why is the level of reinstatement and re-engagement so low unless the tribunals and others in the system are failing to take it seriously enough, or the law is not strong enough? To some extent the nature of the problem was acknowledge in paragraph 3(4) of the Fairness at work White Paper28. This expressed the hope 'that the voluntary arbitration alternative provided by ACAS will create a change of culture so that individuals who have been dismissed unfairly are more likely to get their jobs back'.

(The case of Wood Group Heavy Industrial Turbines Ltd v Crossan (1998)29, provides a salutary reminder of the vital role that the EAT can play in either promoting or inhibiting re-employment. ) The key issue in relation to bringing about re-employment, it is suggested that it is one of speed and time. The quicker an application comes before the tribunal or other ad judicatory body, the easier it will be for an employee to be re-employed.

In another word, the quicker the application is determined the less likely it its that the employee will be looking for alternative work; the less the employee's skills and job familiarity will have diminished; and the less likely it is that the employer will have replaced the dismissed employee. If the government is serious about a change of culture to re-employment, it will not enough to rely on the voluntary arbitration scheme or to put indirect pressure on employers by raising the limit on the compensatory award.

David Lewis discussed four proposals30. Firstly, it is sometimes suggested that re-employment must be speedily effected if it is to be worthwhile. One method of dealing with delays would be to extend the interim relief provisions (Sections 128-32 ERA 1996) to all cases where re-employment is sought. Secondly, one reason that both employers and employees may be reluctant to accept re-employment as an appropriate remedy is that they are unlikely to have had experience of it. A possible solution might be to introduce a system of trial period.

Under such a system, consent to re-employment would be provisional in the sense that either party could apply to have compensation substituted before the end of the trial period. A third proposal would be to increase the size of the additional award under Section 117 ERA 1996. However, raising the cost of non-compliance will do nothing of itself to increase the number of re-employment orders made. Indeed, it might result in fewer orders it tribunals became more cautious about re-employment because of the more onerous consequences for recalcitrant employers.

A forth proposal would be to amend the criteria for assessing the appropriateness of re-employment. Currently, Section 116 ERA 1996 requires tribunals to be satisfied that it would be 'practicable for the employer to comply' before making a re-employment order. Not surprisingly, given this managerial perspective, tribunals have relied heavily on the assessments of employers. What is proposed is that tribunals would be required to order the reinstatement of any willing successful applicants who had not caused or contributed to their dismissal.

Where the applicant was at fault to some extent, the discretion to order reinstatement, re-engagement, or neither, would remain. If the terms of an order are not fully complied with or re-employment does not take place, employers would be able to justify on-compliance on the ground of impracticability. In David Lewis's opinion31, if the objective is to create a culture of re-employment, employers must be required to provide convincing reasons why they should not restore what they have unlawfully taken away.

Hugh Collin in his book, Justice in Dismissal32, also debate about reinstatement. If the overriding aim of the legislation is improving job security then Collins considers that this is better done by making dismissal an expensive option for an employer then by ordering reinstatement which, he argues, means that the employer has paid no more than she would have done anyway. This is why he favours punitive damages for his civil liberties cases and 'substantial' compensation for disciplinary dismissals.

He admits that if corrective justice is the aim, reinstatement looks like a better remedy than compensation because it most accurately returns the employee to the position that she would have been in but for the unfair dismissal. However, even if corrective justice were the aim – and he is not convinced that it is – there are three other considerations which he believes suggest that compensation rather than reinstatement. They are, firstly, proportionality. If the employee is partly to blame, then she should not get the full benefits of reinstatement: the compensation remedy is flexible enough to take account of that.

Secondly, minimizing social cost. If reinstatement is a probability the employee is discourages from mitigating her loss by trying to find alternative employment. It is likely that another hearing will be required, producing additional costs to the system. Finally, managerial authority. Since in the end managerial authority can prevail, in that failure to comply with a reinstatement order simply results in a requirement to pay a not very large sum by way of additional award. Now let us turn to look at the weak protections for employees dismissed in breach of contract.

As a remedy for wrongful dismissal, damages were generally limited to compensation for the loss of remuneration during the notice period which the employee had been wrongfully denied. (Addis v Gramophone (1909)33; Lavarack v Woods of Colchester Ltd (1967)34). In the case of fixed term contracts for higher paid employees, or employees with big salaries and long notice periods, the amounts could be considerable. (O'Laoire v Jackel International Ltd (No2) (1991)35). In most cases, however, the amount was and is measured in weeks, now regulated by the standard minima established by s 49 of EPCA 1978.

Damages for loss of reputation or to compensate for the distress caused by the manner of dismissal are rarely if ever obtained. (Bliss v South East Thames Regional Health Authority (1985)36; Marbe v George Edwards (Daly's Theatre) Ltd (1928)37) One exception that survives today is the case where an employee is deprived of a claim under statute law owing to a wrongful dismissal precluding eligibility because of the time limit. (Stapp v Shaftesbury Society (1982)38) Finally, the courts have also placed defendants under a duty to mitigate their loss, by looking for a new employment even during the period corresponding to the notice entitlement.

(Yetton v Eastwoods Froy Ltd (1966)39) In recent years, the courts have indicated that they are prepared, in certain circumstances, to view the employer's repudiatory act as not automatically terminating the contract, but rather presenting employees with an option either to accept the employer's repudiatory conduct as terminating the contract, or to choose to keep certain terms, or the whole, of the contract on foot so as to enforce their contractual or statutory rights (Gunton v Richmond-upon-Thames London Borough Council (1981)40).

The first hint of a new remedy of specific performance was Hill v C A Parsons & Co Ltd41, in which the Court of Appeal held that in a case where the employer, reluctantly enforcing a closed shop arrangement, gave adequate notice of termination to a senior employee of long service, an injunction could be granted to the employee restraining the employer from terminating the employment contract. Nevertheless, it established an exception to the general rule that courts would not grant specific performance of contracts of service.

Sachs LJ made the point that it was necessary for the plaintiffs to establish at trial that the employer's repudiation of the contract did not terminate the contract in the absence of it being accepted; and that the contract would continue to subsist until the end of the period or proper notice to which the employee was entitled. Shortly afterwards, in Chappell v Times Newspaper Ltd (1975)42, this window for employee injunctions appeared to be closed again. As Lane LJ stated:

'Very rarely indeed will the court enforce, either by specific performance or by injunction, a contract for services; either at the behest of the employers or of the employee. The reason is obvious: if one party has no faith in the honesty or integrity or the loyalty of the other to force him to serve or to employ that other is a plain recipe for disaster. ' However, there are a number of injunctions were granted to employees whose contracts of employment had been repudiated by employers.

(See, Jones v Lee (1980)43; Gunton v Richmond-upon-Thames London Borough Council (1981)44; R v BBC, ex p Lavelle (1983)45; Irani v Southampton and South West Hampshire Health Authority (1985)46; Robb v London Borough of Hammersmith and Fulham (1991)47; Hughes v London Borough of Southward (1988)48 and Powell v London Borough of Brent (1987)49) What is clear is that, injunctions have hardly been granted to restrain dismissal, and there are no signs of them becoming anything more than a very exceptional remedy.

Most wrongfully dismissed employees are left just with a claim for damages, limited to the period during which the contract could lawfully be terminated by the employer – the notice period. (Lavarack v Woods (1967)50). The minimum lengths of notice laid down by statute remain extremely short51; for many employee will not be entitled to damages for his or her reasonable expectation of continuing in the job perhaps until retirement. Nor can he or she recover for the humiliating manner of dismissal (Addis v Gramophone Co.

Ltd (1909)52), or for any resulting stigma in the labour market (Malik v BCCI (1995)53). With high levels of unemployment and improvements in information flows in the labour market, a worker wrongfully accused of misconduct or incompetence may be effectively debarred from working again. At present, the courts are exceptionally prepared to add on the length of time it would have taken the employer to go through an agreed disciplinary procedure.

54 But if the amount of damages is judged by reference to the legal rights of the parties independent of the purported reason for dismissal, damages should never exceed the notice period, for an employee has a maximum legal expectation of continued employment for the period of notice and no more. Only if weight is given to the breach of the procedure is there a justification for adding on the disciplinary period, as Buckley LJ considered was the case in Gunton v Richmond London Borough Council (1980)55.

Yet, once it is recognized that respect for contractual dismissal procedures is difficult to reconcile with a rule limiting damages to the notice period, it is hard to see why these damages should simply reflect the length of time it would take to go through that procedure. Rather, it seems that the court should go on to access the likelihood that, had the procedure been followed, the employee would not have been dismissed.

For the exercise is no longer one of treating an employee as being legally vulnerable to dismissal on notice at any time; instead, it involves giving effect to the reasonable expectations of the employee in the circumstances of the particular dismissal. There is no reason why here, the courts cannot assess the value of the lost chance, an exercise that is often conducted in unfair dismissal cases. It is hard to assess what effect higher levels of contractual damages would have on restraining dismissals; but those who consider how much workplace practice has altered because of personal injury litigation.

Little has been said, though, of what to do for an employee who has actually been dismissed other than to give a right of action. From the discussion above, we can know that despite the statute's emphasis on re-employment as the remedy for unfair dismissed workers and the strengthening of this remedy in 1976, tribunals have always been reluctant to award it. The industrial tribunals pay a lot of attention to the employers' view regarding the acceptability and practicability of re-employment and rarely award the remedy in the face of employer opposition.

However, from the employer's definition of success, which is whether the applicant on return would make a satisfactory employee and cause no managerial problems rather than considering the employee interests which might be served by re-employment, is what tribunals do tend to adopt. Therefore, I do not think that by looking only at the re-employment rate will conclude that the law of both wrongful dismissal and unfair dismissal is a failure.