The Code of Practice

In relation to the job security agreement with UCW containing a seniority agreement which stipulates that "selection for redundancy will be made on the basis of seniority with the company on the basis of last in, first out". Albert has been working for the company for ten years and he is not a member of the union UCW, he was informed that he has been selected for redundancy.

Redundancy is a prima facie fair ground for dismissal. The employer must establish that redundancy was the principal reason for dismissal since the statutory presumption of redundancy in the Employment Right Act 19966, for the purposes of the redundancy payments scheme it is not applicable in an unfair dismissal claim7, authority for this would be the case of Midland Foot Comfort Centre Ltd v Richmond8.

The redundancy payments legislation gives an individual a right to payment upon redundancy, but it does not lay down any particular procedures for handling redundancies. There are however two obligations laid upon the employer who is about to make employees redundant, firstly, to consult employee or trade union representatives and secondly, to notify the Secretary of State.

In order to ensure that redundancy may not be held to amount to an unfair dismissal, it is important that the employer should follow a procedure of good industrial practice, such as was laid down in the case of Williams v Compair Maxam Ltd9, the employer should give as much warning as possible, the employer should consult with the trade union, particularly regarding selection procedure, the selection procedure should be objective, the employer should ensure that the selection procedure is followed and the employer should seek to offer alternative employment.

The results or products of collective bargaining may affect an individual's contract of employment in three ways. The first is by express incorporation into the contract of employment. If a term is agreed upon by both parties whereby the, say, rate of pay is effected by the collective agreement in force between the trade union and the employer, the rate of pay to the employee may be varied accordingly without the need for any further agreement10, similar situation can be seen in the case of Robertson v British Gas11.

Such a term may be included in the contracts of employment of both union members and non-union members12. The second theory of incorporation into an individual employee's contract is by was of agency, the idea that the trade union is acting as an agent for its members as individuals. Although the laws of agency may permit this, in practice it is most unlikely that either the union or its members would wish to be so bound. The case of Burton Group v Smith13 is authority for the presumption that the trade union does not act as agent for its individual members in collective agreements.

Thirdly, it may be possible to incorporate the products of collective agreements (or any other terms) in to an individual's contract by conduct, in effect as part of custom and practice. It is possible for almost any term to become an express term of the contract, if agreed to by both parties. It appears that the Unfair Contract Terms Act 1977 applies to the contract of employment; authoritative cases are Johnstone v Bloomsbury Health Authority14 and Brigden v American Express Bank15

In earlier times when the law encouraged rational collective bargaining where an employer had is under a duty to disclose certain information to an independent trade union which is recognised by him. This duty was first enacted in the Industrial Relations Act 1971; it is now contained in the Trade Union and Labour Relations Act 1992, sections 181-5 and the Code of Practice No 2 'Disclosure of information to Trade unions for collective bargaining purposes', produced by ACAS pursuant to section 181(4)16.

The issue in relation to Barry informing Albert that his bonus had been discontinued as he has not met his sales targets in the last six months. When Albert applied for the job, he signed a written statement of particulars which stated that the terms of his contract were to be governed by collective agreements, Albert signed the statement but also stating that he was not a union member. Zephyr Autos has a job security agreement with UCW which states that discretionary bonuses are payable for good performance.

The leading case in terms of Albert's situation would be Robertson and Jackson v British Gas Corpn17, where the Court of Appeal held that employees could still claim a bonus which had been incorporated into their contracts even though the collective agreement whence it had originally come had been unilaterally abrogated by the employer. If an employer wishes to not incorporate the terms of a collective agreement, it may not be sufficient enough just to abrogate the agreement if it is incorporated in the employers contracts; he may have to go further and show that those contracts have also been varied18.

The final issue it that, Denise was dismissed for gross misconduct after Barry suspected that she has been misusing company funds by concocting false invoices, she was dismissed after a brief investigation was conducted, but it was inconclusive. In cases of dismissal by gross misconduct, a series of warnings may be particularly important, where repetition eventually justifies the dismissal. Warnings in this context will normally amount to a disciplinary action, so the employer should that this is given in accordance with any procedure laid down in the employee's contract or work rule book.

It is important that the employer achieves the right balance between certainty and flexibility. On one hand it is important that people committing like offences should be treated alike, this is in favour of a consistent application of disciplinary rules, regardless of who the culprit is, this can be seen in the case of Post Office v Funnell19. On the other hand it is regarded that, the key to unfair dismissal is flexibility by the employer. In cases where the employer has suspicion and in more serious cases its important that a full investigation is conducted, providing that the employer has contractual authority to do so.

The Code of Practice20 states that when an employee is suspended it is particularly important that the employer's investigations should be even-handed and fair; this is further illustrated in the case Av B21. during the investigation the employee will still be entitled to pay and the duration should be only for a brief period, so the employer should come to a reasonable decision to dismiss once he has had time to make reasonable investigations; any prolonged delay before the employer takes a decisive action could conceivably make the dismissal unfair, as can be illustrated in the case Cf Refund Rentals Ltd v McDermott22.

In cases where there is only a suspicion that the employee has committed an offence, the employer may feel that the employee ought to be dismissed immediately, but at the same time the employee under suspicion must not be treated arbitrarily. Currently, and in particular since the decision of the EAT in British Home Stores ltd v Burchell23, approved by the Court of Appeal in W Weddel & Co ltd v Tepper24 and Whitbread plc v Hall25 and fully in line with the current, post Polkey approach, is that the employer may dismiss if he has a genuine belief in the employee's guilt, which is based upon reasonable grounds.

The employer does not have to prove that the employee is guilty, as long as his suspicion is based upon reasonable grounds; it is irrelevant if the employee is later acquitted of the offence26, and authority of this would Dhaliwal v British Airways Board27. The reasonableness of his belief will depend upon whether the employer made a reasonable investigation to establish the facts before coming to a conclusion.

A reasonable investigation consists of the employer making careful inquiry, allowing the employee to be heard in his own defence, the EAT have suggested that the employer might at least give the employee an opportunity to make representations particularly if the employer ought to go as far as dismissal.