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Lord Falconer of Thoroton: Not in defining "misconduct".
Lord Wedderburn of Charlton: Not in defining "misconduct". Therefore, regulations will not tell us what "misconduct" means, but somehow they will make the general position clearer.
Lord Falconer of Thoroton: They will set what the procedures apply to—but it will not define "misconduct".
Lord Wedderburn of Charlton: They will not define "misconduct", but will tell us what the procedure will mean in its application. The procedure says:
- "The employer must set out in writing the employee's alleged misconduct which has led to the dismissal".
There really is no case for these modified procedures. They are confusing, although the noble and learned Lord said that it was important to keep the them simple. That was his basis. So, in order to cure the confusion we must introduce another simple confusion. Simple confusions do not cure other confusions; they make them worse.
I do not say that my form of words is correct; I simply took the words from the judgments. I believed that the judges might know something about the law on this and so I thought I should do that. If the Minister does not like "fundamental breach of his obligations", which he read out in a somewhat harsh manner, perhaps he has a better phrase. But "misconduct" will not do. We are making law, and here we are making confusing and uncertain law, and we are thrusting it into the contract of employment by Parliament's diktat.
It is not good enough. However, we are in a Grand Committee and there is no point in pursuing the matter. We shall certainly come back to modified procedures at the Report stage and I hope that the review of Schedule 2 will lead the government to be more flexible. Labour markets, we are told, must be flexible, and we would add to that that governments must be flexible. They must look at Schedule 2 again and come back with something better. I give way to my noble friend.
Lord Gladwin of Clee: My noble friend is right in saying that the Minister did not answer my question. I always thought it was dangerous to have two different words that meant the same thing in legislation, because judges will say that Parliament used two different descriptions and therefore there must be two different meanings.
My understanding is that the standard procedure provides for an employer to take action against an employee for alleged conduct, but the modified procedure talks about alleged "misconduct". I really do not understand why the Government want to use two different descriptions.
Lord Falconer of Thoroton: I apologise to my noble friend if I have not specifically replied to his question. I will try to make it clear. The modified procedure will by regulations be applied in respect of cases where the dismissal has already occurred and therefore it is instant or near instant. It will therefore be applied to a case where the employer, rightly or wrongly, alleges that the employee has been guilty of conduct which justifies dismissal.
He may or may not be right in relation to it, but he has to set out in his letter what the misconduct was. It must be misconduct in order for the employer to have dismissed him. That is why, the dismissal having already occurred, in the modified procedure we use the word "misconduct", whereas in the earlier, unmodified procedure, we use the word "conduct".
The conduct can be examined and it might all turn out to be nothing at all. The employer might say, "Nothing has gone wrong, you stay employed".However, by the time one gets to the modified procedure, the employee has already been instantly, or near instantly, dismissed. That is why we use the word "misconduct". We believe it is simple and it is right to use a clear word like "misconduct" rather than "alleged fundamental breach of contract", which is what my noble friend Lord Wedderburn suggests. That is why we have used two different words. I hope that is comprehensible.
Baroness Turner of Camden: Before my noble and learned friend sits down, a matter has occurred to me because for many years I was a member of a social security tribunal. One of the problems was that we often received allegations that an individual had been dismissed for misconduct. That automatically meant that he—it was usually he—was liable to lose benefit. I used to insist that the person who alleged the misconduct should come along and justify it. If it was not justified, the case had not been proved and the individual had benefit restored.
The point I make is that the use of the term "misconduct" becomes important as far as the employee is concerned in a social security environment. Therefore, if it is not appropriate here, that has severe implications for an individual facing that kind of allegation. He may find himself losing benefit and then he may well be severely disadvantaged as a result of that.
Lord Falconer of Thoroton: That is why the statutory procedure uses the words "alleged misconduct".
Lord McCarthy: None of this explains why under the modified procedure the employer does not have to explain what he has done; does not have to defend what he has done; and does not need to have a meeting with the employee in order to tell him what he intends to do before he does it. That is to take one slice away from the employee. If it is a dismissal or a disciplinary case, he can say that he wants to appeal. But what does he appeal against? He appeals against the unilateral act of his employer, which has not been discussed or explained, has been done instantly and carries the penalty of instant dismissal. What is it about that difficult circumstance from the point of view of the worker which justifies shortening the standard procedure?
Lord Wedderburn of Charlton: I have been puzzling over my note of what I believe my noble and learned friend said. It seems that Step 4, which is the modified procedure on discipline, really means that the employer must set out in writing the employee's misconduct which the employer alleges is justification for a lawful dismissal. I am informed that that is wrong. He does not have to allege misconduct which makes his dismissal lawful. The employer can allege any old misconduct. I thought the Minister said that he had to allege misconduct that would ordinarily justify dismissal. If I am wrong in that, I am surprised.
There is a second point which led to the summary dismissal. We have been using the phrase "instant dismissal", which is not normally a term of art. As I understand it, it applies to cases of summary dismissal and it does not apply to dismissals on notice. Therefore, the modified procedure should have written into it
- "the employee's alleged misconduct"—
- "which has led to the summary dismissal of the employee".
I intend, of course, to beg leave to withdraw the amendment but I shall not do so before my noble and learned friend replies. It seems he does not wish to do so. We must leave the matter there. This is eminently a case that we should come back to on Report. We cannot possibly leave the Bill like this, whatever regulations we shall get and whatever appeals to Pepper v Hart the Government will make. The idea that this will only involve the employment tribunal is, of course, absurd. This point will involve the employment appeal tribunal, the Court of Appeal, House of Lords and your Lordships' Judicial Committee. If the Government wanted to provide fees for my brethren whose practice grows in this area, they could not have done a better job. But I cannot believe that could possibly be their objective. They must look at Schedule 2 again and they must do something better than is at present in the modified procedure. Preferably, they should delete it or, if they cannot do that, they should make it clear. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6.15 p.m.
Lord Wedderburn of Charlton moved Amendment No. 109:
- Page 64, line 33, after "which" insert "on the facts known to the employer at the time"
The noble Lord said: We can deal with this very quickly. It is a legal point and it is a legal point that arises very fairly, in my submission, in relation to the problems of the modified procedure. As a matter of fact, I am rather surprised that we did not table this amendment in relation to both the standard and the modified arrangements; but we have not. I am trying to find common ground in this regard. I take it to be common ground that what it means is that the employer must set out what he alleges are the incidents of misconduct that led him to dismiss—summarily dismiss, I think.
The law got itself into a sort of schizophrenic mess in this area because, this being a matter of breach of contract and of unfair dismissal, the jurisdictions of the common law courts—in the High Court and the Court of Appeal and so on—on what amounts to a
proper dismissal in the face of misconduct, the decisions in the employment tribunals and, as it turned out, the employment appeal tribunal, Court of Appeal and House of Lords in regard to unfair dismissal of course diverged. In the former—in the High Court and the common law tests of breach of contract— since the case of Boston Deep Sea Fishing Company v Ansell in 1888 (39 Ch D 339), it was held that an employer who dismissed in ignorance of certain facts and on grounds that were not adequate to justify the dismissal, could, when he learned subsequently of other facts about the misconduct of the employee—to put it broadly—add those subsequently acquired facts to the dismissal and justify it retrospectively.
When they came to look at the law on unfair dismissal, the courts and, ultimately, the Judicial Committee of your Lordships' House decided that that common law rule really could not apply to the new law on unfair dismissal. In Devis v Atkins in 1977 (IRLR 314), the House of Lords decided that the common law principle of adding subsequent knowledge to the dismissal that had taken place before could not apply. I refer to the noble and learned Lord, Lord Simon of Glaisdale, for once, who very pithily said that the reasonableness of the employer's action could not be justified by facts subsequently acquired. Of course, there could be argument if this rule in the modified procedure applies to justifiable dismissal for misconduct, as to which of the rules applies. It could be that my noble and learned friend will say that, because this is going to be concerned primarily with unfair dismissal, the unfair dismissal precedents will apply. But I remind him that that is not concerned only with unfair dismissal; since they have put these modified procedures and the obligation to observe them into the contract of employment the employee—and, indeed, the employer—will have actions in the county court or the High Court for breach of contract under Clause 30. They will do so—I will say more about this later—because they have chosen to use (I do not criticise them for this) the mechanism of a statutorily implied term in the contract of employment by Clause 30. That was their choice and they must live with it. That could be a breach of contract that could be sued upon in the ordinary courts, and we do need to know whether the old common law test or the new unfair dismissal test, about the facts known to the employer and their effect, will be relevant in this area of the law. I beg to move.
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