ACCA F4 - Corp and Business Law (ENG)

150 9: Dismissal and redundancy  Part C Employment law

Re-engagement means that the employee is given new employment with the employer (or their successor

or associate) on terms specified in the order.

In deciding whether to exercise these powers, the tribunal must take into account whether the complainant

wishes to be reinstated and, whether it is practicable and just for the employer to comply. Such orders are

in fact very infrequent.

The Employment Appeal Tribunal has ruled that an order for re-engagement should not be made if there

has been a breakdown in confidence between the parties.

7.3 Compensation

If the tribunal does not order reinstatement or re-engagement the tribunal may award compensation,

which may be made in three stages as follows.

(a) A basic award calculated as follows. Those aged 41 and over receive one and a half weeks' pay (up

to a statutory maximum per week) for each year of service up to a maximum of 20 years. In other

age groups the same provisions apply, except that the 22–40 age group receive one week's pay per

year and the 21 and under age group receive half a week's pay.

(b) A compensatory award for any additional loss of earnings, expenses and benefits on common law

principles of damages for breach of contract. This is to compensate the employee for financial loss

suffered as a result of unfair dismissal insofar as that loss is attributable to action taken by the

employer. This is limited to a statutory maximum and may be awarded in cases where

reinstatement or re-engagement are deemed in appropriate by the tribunal.

(c) If the employer does not comply with an order for reinstatement or re-engagement and does not

show that it was impracticable to do so a punitive additional award is made of between 26 and 52

weeks' pay (again subject to a statutory weekly maximum).

The tribunal may reduce the amount of the award in any of the following circumstances.

 If the employee contributed in some way to their own dismissal

 If they have unreasonably refused an offer of reinstatement

 If it is just and equitable to reduce the basic award by reason of some matter which occurred

before dismissal

8 Redundancy

Dismissal is caused by redundancy when the employer has ceased to carry on the business in which the

employee has been employed or the business no longer needs employees to carry on that work. In these

circumstances, dismissal is presumed by the courts to be by redundancy unless otherwise demonstrated.

An employee may claim a redundancy payment where they are:

 Dismissed by their employer by reason of redundancy

 Laid off or kept on short time

8.1 What is redundancy?

A dismissal is treated as caused by redundancy if the only or main reason is that:

 The employer has ceased, or intends to cease, to carry on the business (or the local establishment

of the business) in which the employee has been employed

 The requirements of that business for employees to carry on the work done by the employee have

ceased or diminished (or are expected to)

Key term

Key term

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