West Hertfordshire Hospitals NHS Trust v. Evans

Under the former statutory dismissal procedure, an employee must be told at Step 1 that dismissal is contemplated or is a possible outcome. The warning may be implicit only where the surrounding circumstances clearly convey that risk. Information supplied after a Step 2 disciplinary meeting has begun does not cure the breach unless the process is restarted afresh. A mandatory 10% compensation uplift applies for non-compliance. A higher uplift requires reasoned justification relating to the circumstances of the procedural failure. Compensation for future loss must be based on findings about mitigation, medical capacity and the availability of suitable work; general assumptions about the difficulty older workers face in finding employment are insufficient.

Mrs Evans, a health care assistant employed by the Trust, was dismissed following allegations that she had made racist remarks to colleagues. The Employment Tribunal found that the dismissal was automatically unfair because the Trust’s initial disciplinary letter did not warn that dismissal was a possible outcome. The warning was given only after the first part of the disciplinary hearing had taken place. The Tribunal awarded compensation, including loss of earnings to retirement and a 30% statutory uplift.

The Trust appealed against the findings on procedural compliance, the uplift and the assessment of future loss. The central issues were whether the later warning cured the failure to comply with Step 1, whether the 30% uplift was justified, and whether the compensatory award was supported by adequate findings and reasons.

1. Statutory procedure. The appeal was not allowed on the finding of automatic unfair dismissal. Under Employment Act 2002 Schedule 2, Part 1, Chapter 1, Step 1, the employer must state the conduct or circumstances leading it to contemplate dismissal and must warn the employee that dismissal is a possible risk. That warning may be implicit where the surrounding circumstances make the risk clear. The initial letter did not do so. Enclosing a lengthy disciplinary policy, without drawing attention to the relevant provisions or stating that the allegation could constitute gross misconduct leading to dismissal, was insufficient. The approach in Alexander v Bridgen Enterprises Ltd and Homeserve Emergency Services Ltd v Dixon was applied and explained.
2. The warning in the later letter was given after the first part of the Step 2 meeting. Although an employer may cure an omission before disciplinary action by complying with the required steps, a Step 2 meeting cannot take place before the Step 1 information has been supplied. The hearing resumed rather than restarted. The breach therefore remained. YMCA Training v Stewart and Smith Knight Fay Ltd v McCoy were applied and explained.
3. Uplift. The Tribunal was entitled to award the mandatory 10% uplift under Employment Act 2002 section 31(3). Any uplift above 10% is discretionary and must be justified as just and equitable by reference to the circumstances surrounding the failure to complete the procedure. The Tribunal gave no adequate reasons for 30%. In circumstances where the Trust attempted to rectify the omission before the resumed hearing, the additional uplift was perverse. A 10% uplift was substituted.
4. Compensation. The compensatory award was set aside. The Tribunal had made no adequate findings on Mrs Evans’s medical ability to work, the expected improvement in her condition, mitigation, or the availability of suitable full-time or part-time employment. Its general view that older people face difficulty obtaining work did not establish future loss to retirement. The reasoning in Brentwood Brothers (Manchester) Ltd v Shepherd was distinguished because this was not an assessment based on evidence or genuine local knowledge and experience.
5. The claim for a compensatory award was remitted to a differently constituted Employment Tribunal for rehearing. The 10% uplift was to be applied to any compensatory award.

• Employment Appeal Tribunal: The Tribunal upheld the finding that the dismissal was automatically unfair, substituted a 10% uplift for the 30% uplift, set aside the compensatory award and remitted compensation for rehearing to a differently constituted Employment Tribunal.
• Employment Tribunal: Found the dismissal automatically unfair and awarded £54,146, including compensation to retirement and a 30% uplift.