Tue 07 Aug 2018

Statutory extension of qualifying service in gross misconduct cases

The Employment Rights Act 1996 provides for the statutory minimum notice period to be used by employees to extend their length of service to enable them to qualify for protection from unfair dismissal.

Employers always need to be careful when dismissing close to the two year service point (at which point employees will obtain unfair dismissal rights). In reality, due to the operation of statutory notice (1 week for employees with less than two years' service), employees only need to have 1 year and 51 weeks' qualifying service to raise an unfair dismissal claim. This is because, under the Employment Rights Act 1996 (ERA), employees dismissed without having worked any notice are entitled to have their 1 week statutory notice period added to their length of service for the purposes of calculating whether they have the necessary service to raise an unfair dismissal claim.  

In Lancaster & Duke Limited v Mrs V Wileman the EAT have considered whether an employee who is summarily dismissed for gross misconduct can still claim a statutory extension of the notice period under the ERA. 

Under the ERA the statutory minimum period of notice can be used in certain circumstances to extend employees length of service to enable them to qualify for protection from unfair dismissal.  However, section 86(6) states that the section "does not affect the right of either party to a contract of employment to treat the contract as terminable without notice by reason of the conduct of the party". 

Ms Wileman had been dismissed for gross misconduct in circumstances that meant she had just short of the necessary two years qualifying service to bring a claim for unfair dismissal.  However, she brought a claim arguing that, under the ERA, her length of service was extended by the statutory minimum period which meant she had the requisite service.  The Employment Tribunal agreed with her, rejecting the Respondent's argument that her right to rely on the statutory minimum notice entitlement was displaced by virtue of section 86(6).  The Tribunal then upheld her unfair dismissal claim.  

The Respondent appealed.  The EAT held that the tribunal had erred in concluding that the minimum statutory notice had to be deemed to be included when calculating length of service for the purposes of qualifying for protection from unfair dismissal.  Section 86(6) preserved the right of the parties to terminate without notice.  In circumstances where an employee has committed gross misconduct and the employer is therefore entitled to dismiss without notice no statutory notice should be added to length of service.  In this particular case, no finding had been made by the tribunal as to whether Ms Wileman had in fact committed gross misconduct so the matter was referred back to the tribunal.   

While it would seem logical not to allow employees who have committed gross misconduct to benefit from the addition of the statutory minimum notice to their length of service, it will be of comfort to employers to see the EAT coming to this conclusion. 

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