In Carmelli Bakeries Ltd v Benali the Employment Appeal Tribunal considered a case where a baker, Mr Benali, claimed unfair dismissal and victimisation when he was dismissed for using non-kosher jam in his work for a kosher bakery – which was gross misconduct. Mr Benali had worked for the bakery since 2004 and had an unblemished record until 2011. However he had made disability related claims and had a lengthy period off work in 2008 when he was suffering from sciatica.
There was no doubt that he had knowingly used the jam. He had arranged for two (non-kosher) jars to be bought from the local Tesco store when the regular supply ran out. However an Employment Tribunal found that this was not the “operative cause” of his dismissal. The “real” reason for his dismissal was that he had earlier made a disability discrimination claim against his employer. Mr Benali lost any right to notice pay because of his admitted gross misconduct but was successful in both his other claims before an employment tribunal. He was awarded £35,567 which included a basic award, a compensatory award based on one year’s loss of earnings under the Employment Rights Act and an award of £14,000 for injury to feelings under the Equality Act. The Employment Appeal Tribunal upheld these findings. Consequently, although it seemed that the employer had the most clear cut of cases to justify dismissal for gross misconduct, this was undermined by what the tribunal regarded as the real reason of discrimination. Mr Benali felt that he had been regarded as a “problem employee” singled out for “special scrutiny” and, ultimately, the tribunal agreed. However, the Employment Appeal Tribunal did allow an appeal by the bakery owners on one ground; remarkably, no consideration had been given to any deduction for contributory conduct, and this was an error. The case was therefore sent back to the tribunal to consider the point.
Continuing the cakes and confectionery theme, Park Cakes Ltd v Shumba & Ors provides a useful summary of the typical factors to be looked at when deciding whether a particular benefit (in this case an enhanced redundancy payment) has become a contractual term. The case arose when four section managers at a cake factory were made redundant. The question arose whether they were entitled to enhanced redundancy payments of more than twice the statutory package. There was nothing in their written contracts about this, nor in the Employee Handbook. However, there was a body of written evidence about how the payments had been regarded, including an undated agreement between a recognised union and a previous owner of the business (there had been TUPE transfers, but these were not material) and an unpublicised policy document both referring to “entitlements”, and a miscellany of past redundancy calculations showing enhanced payments. There was also witness evidence suggesting the practice was widely known and often, if not invariably, followed.
Accordingly the claims for enhanced redundancy payments were, in effect, for damages for breach of an implied term in the contracts of employment. At the employment tribunal claims for unfair dismissal succeeded but the claims for redundancy payments failed.
Supporting the conclusion of the Employment Appeal Tribunal the Court of Appeal found that the decision of the tribunal had been flawed, because it had not made findings of fact about how often the enhanced payment had been made. Summarising the issue to be addressed Lord Justice Underhill said
…the essential question in a case of the present kind must be whether, by his conduct in making available a particular benefit to employees over a period, in the context of all the surrounding circumstances, the employer has evinced to the relevant employees an intention that they should enjoy that benefit as of right.
He also set out a useful, but not comprehensive, list of circumstances to look at when answering this question:
- On how many occasions, and over how long, the benefits in question have been paid;
- Whether the benefits are always the same;
- The extent to which the enhanced benefits are publicised generally;
- How the terms are described;
- What is said in the express contract;
- How equivocal the evidence is – the burden of establishing that a practice has become contractual is on the employee. If the employer’s practice is, viewed objectively, just as well explained as an exercise of discretion rather than legal obligation, the employee has not proved the practice is contractual.
A new tribunal will now consider the case with these factors in mind.