The Employment Appeal Tribunal has held in Zimmer v Brezan that a “Step 1 letter” must inform an employee of any risk of dismissal and the reason why. Where this is not stated, a resulting dismissal will be rendered automatically unfair. Jenny Wotherspoon explains why.
Topic: Dismissal Procedures
Who: Nico Brezan and Zimmer
Where: Employment Appeal Tribunal
When: February 2009
Law stated as at: February 2009
Nico Brezan worked in sales for Zimmer, a maker of orthopaedic products as well as the infamous Zimmer frame. Brezan covered a large area of the south of England and was being considered for a promotion to an office-based role. After he had raised concerns about losing his entitlement to mileage payments in this new role, Zimmer decided to conduct an investigation into Brezan's mileage and expenses claims.
During the investigation, Zimmer found that Brezan's claims seemed higher than those put in by others in similar jobs but in other regions. Zimmer's human resources director emailed Brezan asking him to come to a meeting to discuss this, including with the email a copy of the firm's disciplinary policy.
No mention was made in that email of Brezan's possible dismissal or of the fact that his behaviour might be considered gross misconduct. He was dismissed later that month for misconduct (the reasons cited by Zimmer included failure to comply with a reasonable order, instruction, contractual requirement or work rule, unprofessional conduct and failing to record matters he was required to record.)
A worker is automatically unfairly dismissed if the 3 step procedure outlined in the Employment Act 2002 is not followed. In summary, "step 1" requires informing the employee in writing of the disciplinary issue, "step 2" requires holding a meeting with the employee and informing them of the outcome and "step 3" provides the employee with the right to appeal against the decision to dismiss.
Step 1 specifically provides that "the employer must set out in writing the employee's alleged conduct or characteristics, or other circumstances, which lead him to contemplate dismissing or taking disciplinary action against the employee."
The Decision in Zimmer
The question being considered in Zimmer was whether the company had followed the 3 step procedure.
The EAT held that a step 1 letter must allow the employee to understand that he is at risk of dismissal and the reason why. As the e mail had not stated that dismissal was a potential outcome, step 1 had not been complied with. As a result Zimmer had failed to follow the 3 step procedure and Brezan's resulting dismissal was automatically unfair.
Why this matters:
Currently, failing to follow the statutory procedure will result in a finding of an automatically unfair dismissal and a potential uplift of between 10-50% in the damages awarded to the claimant at the Tribunal's discretion.
On 6 April 2009, the current statutory dismissal and disciplinary procedure are to be repealed and replaced with the Acas revised Code of Practice. This more flexible Acas guidance is concise and principles-based, imposing less strict demands on employers. A failure to follow the Code will not, in itself, make a person or organisation liable to proceedings. However, Tribunals will take the Code into account and may adjust any awards of compensation by up to 25 per cent if there has been an unreasonable failure to comply with any provision of the Code.
The new Code still requires employee to be notified of any disciplinary action being taken against them in writing. The Code provides:
"this notification should contain sufficient information about the alleged misconduct or poor performance and its possible consequences to enable the employee to prepare to answer the case at a disciplinary meeting". (our emphasis)
The principles in Zimmer will therefore remain relevant to any disciplinary procedure even after the introduction of the new Code and it is recommended that, if there is a risk of dismissal, that this is highlighted to the employee.
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