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23 Managerial L. 2 (1981)

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Dismissal - changes and innovations
The burden of proof
Whereas the 1978 legislation (1) placed the burden of
proof fairly and squarely on the employer's shoulders, in
that the determination of the question of fairness was to
depend on whether the employer could satisfy the tribunal
that he acted reasonably in treating the reason for dismissal
as sufficient (2), the 1980 legislation makes a significant
change. It provides that in determining whether the dismis-
sal was fair or unfair,  . .. having regard to the reason
shown by the employer, shall depend on whether in the
circumstances (including the size and adminstrative
resources of the employer's undertaking) the employer
acted reasonably or unreasonably in treating it as a suffi-
cient reason for dismissing the employee, and that question
shall be determined in accordance with equity and the
substantial merits of the case.' (3) The employer has no
longer to satisfy the tribunal that he acted reasonably in
treating the reason for dismissal as sufficient: there there-
fore exists no burden of proof either way and a redression
of the situation prior to 1974 (4) has occurred. It is sug-
gested that this change is of little practical significance. The
provisions of the 1978 legislation were only of psychologi-
cal importance (5). They made the Labour Government
and trade unions happy in the knowledge that the employer
was confronted with a tougher task when dismissing an
employee. Research in the case law has shown however
that the tribunals did not treat the 1978 Act (6) provisions
in a significantly different manner to those under the 1971
Act. This means that the 1980 amendment imposing no
heavier burden of proof either way will make virtually no
change in practice.
All this does not however mean that the employer's
burden of proof has disappeared. Far from it. All the
employee need initially do is to show that he has been
dismissed. The burden is then on the employer to show and
prove the reason for dismissal and that he had reasonable
grounds (7) in believing that the employee's conduct con-
sisted in one or more of the statutory reasons (8).
The small establishment
A restoration of the position prior to 1974 on the burden
of proof is but one change made to the 1980 legislation; the
section also makes an innovation, albeit one which de-
veloped through case law. In determining whether the
employer acted reasonably in dismissing his employee the
tribunal has to take into account the size and administrative
resources of the undertaking (9). Dismissal case law had
already developed this concept and this statutory innova-
tion merely confirms what happens in practice. The impli-
cations of this provision is that small establishments will not
be held to have acted unreasonably in dismissing an emp-
loyee merely because of a more informal dismissal proce-
dure than might be expected in larger establishments where
such procedure is on a more formal footing. Procedural
matters should however not be confused with substantial
ones. All this section is concerned with, is with the former,
and not the latter. It would for example be impracticable to
go through a complicated dismissals appeal procedure in a
small establishment where there exists no personnel de-
partment and where the management consists of one or two
persons. Contrasted with this procedural situation is the
substantial situation where the employer, irrespective of

the size of the establishment, has an obligation to dismiss
only if he has reasonable and fair grounds to do so. In doing
so his obligation to adopt a fair procedure remains. le
must, for example, investigate the situation in depth; he
must hear statements of witnesses; he must inform the
employee of the complaint made against him and give him
the time to, and chance of, reply, and the opportunity to be
represented if he so wishes.
Another innovation has been made which again con-
cerns the small establishment. This is in connection with
dismissal in firms employing twenty employees or less. The
qualifying period for claiming unfair dismissal in such firms
has been extended to two years ending with the effective
date of termination. This extension is subject to certain
conditions. Firstly, that at no time during the two year
period did the number of employees employed exceed
twenty, and secondly, this figure of twenty includes emp-
loyees of associated employers (10). The significance of
this provision is that during the two year period employees
would accumulate service towards the qualifying period for
making a complaint of unfair dismissal, but they would be
able to exercise their rights only after the expiry of that
period (11). A number of points should be noted. First,
should the number exceed twenty at any time during the
two years in which the employee is qualifying for a claim of
unfair dismissal the extended period disappears and there
is a reversion to the general qualifying period. This figure is
conditional not on the number of employees employed at
the time of the employee's dismissal, but rather during the
period of his qualification. Second, the total number of
twenty includes employees employed by an associated em-
ployer. Third, the Act talks of 'employees', and not of
independent contractors. This means that an employer and
associated employers may employ more than a total of
twenty if the excess consists of independent contractos, but
then nice legal problems could arise if a court were to find
that an independent contractor was in fact an employee
(12). Fourth, directors of establishments are generally clas-
sed as employees, and therefore they must be taken ac-
count of within the limit of twenty. Fifth, the limit includes
the dismissed employee himself. Sixth, if the reason for
dismissal is on certain medical grounds (13), or an inad-
missable reason, that is, dismissal relating to trade union
membership, neither the extended periods, nor the general
periods apply (14). Finally, as far as the other employee
rights under the 1978 Consolidation Act (15) are con-
cerned, the extended period does not operate.
The Government originally envisaged that this provision
was to apply only to small establishments within the first
two years of their operation, but the section was extended
at the Committee Stage of the House of Commons to
include all small establishments irrespective of how long
they have been operating. The raison d'etre of the provi-
sion stems from the Government's anxiety to give the smal-
ler establishment an incentive to recruit (16) without being
caught by the legislative unfair dismissal provisions which
in all other cases apply to employees employed for fifty-two
weeks (17) or over.
The fixed term contract
Another amendment in the law of unfair dismissal is
made by this legislation. The 1978 Consolidation Act pro-
vides an exclusion where the dismissal consists only of the
expiry of a fixed term contract of two or more years without

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