Can an employer be forced to re-engage an unfairly dismissed employee?
If an employee succeeds in a claim of unfair dismissal against their employer, they can ask the Employment Tribunal (ET) to order their reinstatement or re-engagement.
Reinstatement is an order requiring the employer to treat the employee as if they had never been dismissed. This means re-employing the employee on the same terms of employment with no loss of pay, pension rights or continuity of employment, and with the benefit of any pay rises or other improvements that they would have enjoyed if they had not been dismissed.
Re-engagement is an order that the employee must be engaged by the employer, its successor, or an associated employer in employment that is comparable to the job from which the employee was dismissed, or in other suitable employment. The Tribunal must specify the terms on which re-engagement will take place, including payment of arrears of pay for the period between the date of termination of employment and the date of re-engagement (back pay).
Orders for reinstatement or re-engagement are rare, but if the employer refuses to comply, the Tribunal can order the employer to pay an additional award as well as the compensatory award for the successful unfair dismissal claim. The additional award is between 26 and 52 weeks’ pay, subject to the cap on a weeks’ pay (currently £525). The tribunal will not make an additional award where the employer satisfies the tribunal that it was not practicable to comply with the reinstatement or re-engagement order.
However, if an employer refuses to comply with the order for reinstatement or re-engagement, can an employee force them to do so?
Dr M issued a claim for unfair dismissal in the ET and sought an order for re-engagement. The employer argued that re-engagement would not be practicable, but the ET rejected that argument on the ground that although there had been an irretrievable breakdown in Dr M’s relationship with a senior colleague, there was no breakdown in the relationship of mutual trust and confidence between herself and the employer more generally. The ET therefore ordered re-engagement, together with back pay of almost £103,000. The employer declined to re-engage Dr M and paid her just over £107,000, which it was agreed was the maximum amount payable.
Dr M started judicial review proceedings in the Court of Appeal, the effect of which (if successful) would be that the employer would be forced to comply with the ET’s order to re-engage Dr M. However, the Court found that there “is no statutory machinery for requiring an employer actually to re-engage an employee, as opposed to requiring it to pay an additional award”. In other words, the employee does not have the right to be re-engaged. The only remedy for non-compliance with a re-engagement order is payment of the additional award.
In this particular case, the amount of back pay payable to Dr M as ordered by the Tribunal was almost as much as the aggregate of the compensatory and additional awards. Dr M was not entitled to both. The result was that the employer had to pay only around £4,000 more as a result of not complying with the order for re-engagement than it would have had to pay if it had done so.
This case clarifies that an employer cannot be forced to re-engage an employee in these circumstances. The Court noted that “the law has always been very reluctant to countenance the making of orders requiring parties to continue in an employment relationship.” If a Tribunal orders re-engagement which the employer does not comply with, the only remedy available to the employee is payment of the additional award.
27 June 2019
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