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Decision by the Court of Appeal stresses the importance of examining substance over form.
In a recent judgment, James Buhagiar vs Jani Limited, delivered on the 26th January 2018, the Court of Appeal examined in quite some detail the issue of disciplinary proceedings in unfair dismissal cases.
The employee had been dismissed following an accusation of theft. The disciplinary procedures in the employment contract had been ignored. On the basis of this, the Industrial Tribunal had concluded that the dismissal was in violation of the right to a fair hearing and of the employment conditions. The Tribunal ordered the employer to reinstate the employee in his previous post without loss of pay for the correct disciplinary proceedings to be followed.
The defendant company appealed this decision. The Court of Appeal commented that in arriving at its decision, the Tribunal had not decided whether the employer had a good and sufficient cause to terminate employment, as it had the power and duty to do under the Employment and Industrial Relations Act (Chapter 452) but had focused on whether the correct disciplinary procedure had been followed. The Tribunal had not examined the case in its substance and in accordance to law – this issue was a point of law on the basis of which the employer could appeal. The Court held that in unfair dismissal cases what must be determined is:
- 1. The reason for the dismissal which must be proven by the employer;
- 2. Whether the employer had been reasonable in his decision to dismiss. This must be decided by the Tribunal.
According to the Court, in order to determine whether a dismissal was unfair it was not enough to determine whether there was procedural fairness or otherwise. The Tribunal had jurisdiction to decide whether there was an 'unfair dismissal' and not a breach of contract. The cases determined by the Tribunal are not cases of 'wrongful dismissal' which relate to breach of contract provisions and for which the employee can have a different remedy other than those stipulated under Chapter 452. While it was expected that the employer follows the contractual obligations imposed in the contract before taking a decision, the fact that he does not do so does not necessarily mean that dismissal is unfair. As required by the definition itself of an 'unfair dismissal', the Tribunal must look at the behaviour of the employee concerned. In some cases it could be that the lack of an opportunity for the employee to explain his position could lead to the Tribunal concluding that the employer was not reasonable to dismiss. In order to determine whether a dismissal was fair or not, it must be determined whether the decision was reasonable at the time when the decision was taken. It could be that in some cases, the facts are so clear that holding disciplinary proceedings would not impact the final decision. The Tribunal should not compensate an employee who deserves to have his employment terminated simply because a procedure was not followed.
In the present case the Tribunal had not examined the merits of the case but had based its decision on the fact that the procedure was not followed. The case was sent back to the Tribunal for it to decide on the merits as explained by the Court of Appeal.
A word of caution for employers – following a proper procedure before dismissal will assist the employer in satisfying the 'reasonableness' principle as emphasised by the Court.
This document does not purport to give legal, financial or tax advice. Should you require further information or legal assistance, please do not hesitate to contact Dr. Christine Calleja.