Until the 1970s, employers had a common law leverage to dismiss employees without giving the employee a chance to be heard (Harcourt, 2012; Walsh, 2012). In Malloch v Aberdeen Corporation,110 the privy council held that where a statute provides for notice of a motion for an employee's dismissal to be given to the employee, natural justice requires that he/she should be given ‘a hearing’. Consequently, a decision by an employer to deny the employee any chance of making representation before he/she is dismissed could offend against the rule of natural justice; and could make the dismissal unfair. In the view of Denning M.R, ‘‘until recently, an ordinary servant had no security of tenure. He could be dismissed on a month's notice or a month's salary in lieu of notice, although he might have served his master faithfully for years. That was altered by the provisions of the Industrial Relations Act 1971’’.
111 This Act is now replaced by the ERA 1996.
109 The only exception is where the Claimant has issued a statutory tort claim such as unlawful deduction in wages. If the Claimant does not specifically plead breach of contract as a head of claim, the employer would not be able to counterclaim. Once the Claimant has issued a claim in breach of contract, irrespective of whether this claim is withdrawn the Tribunal would retain the right to consider the employer’s counterclaim, if any.
110 [1971] 1 W.L.R. 1578; [1971] 2 All E.R. 1278; 1971 S.C. (H.L.) 85
111 Western Excavating (E.C.C.) Ltd. v Sharp [1978] Q.B. 761, at para 767
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The rights of employees not to be unfairly dismissed by their employer is now enshrined within Part X, chapter I, s. 94 (1) ERA 1996. ‘‘[T]he effect of s.94(1) is to remedy the shortfall identified in Malloch v Aberdeen Corpn and make it more difficult for employers to dismiss employees unfairly and/or in bad faith’’.112 It follows that any decision to terminate must be objectively justified. In the event that a dismissed domestic worker is not automatically provided with a statement of reason, he/she could request the document from the employer. 113 The employer then has 14 days to provide the document; 114 otherwise, he could be liable to pay costs should the worker complain to the ET under s. 93 ERA 1996. One key problem for ODWs trying to claim unfair dismissal is the eligibility test. Sargeant &
Lewis (2012: 94) have referred to this test as a hurdle, which includes employment status, length of continuous service, and illegality. The domestic worker must satisfy the ET that he/she was employed.
Although someone engaged as self-employed could had his/her contract terminated in the same way as an employed person,115 unfair dismissal claim is only available to an employed person.116 Defining ODWs as employees is thus quintessential. In most cases, it may not be difficult to find that a domestic worker in the private household is an employee because the household is deemed to be a business.117 However, it is often the case that some domestic workers do register with HMRC as self-employed so that they can pay tax and national insurance dues, which the employers have refused to pay on their behalves. A problem that may arise if they claim against their employers is whether by registering with HMRC as self-employed, their contracts of employment have been tainted with illegality; such that the registration precludes them under the doctrine of illegality.
112 Johnson v Unisys Ltd [2001] UKHL 13, per Lord Hoffman at para 54
113 Catherine Haigh Harlequin Hair Design v Seed [1990] IRLR 175, EAT
114 See Keen v Dymo Ltd [1977] IRLR 118
115 See Fn. 5 for the definition of an employee.
116 See https://www.gov.uk/dismiss-staff/eligibility-to-claim-unfair-dismissal last accessed August 15, 2015
117 Emir, S. (2011) Selwyn’s Law of Employment, (17th Ed), Oxford: Oxford University Press, para 2.107, p.70
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In the combined appeal case of Enfield Technical Services Ltd v Payne and Grace v. BF Components Ltd ,118 the court held a decision as to whether a relationship was one of employment or whether the person performing the services was self-employed would often be very difficult. But the court concluded that an incorrect characterisation (i.e. registering as a self-employed with HMRC but performing a contract of service) of the relationship would not necessarily prevent an employee subsequently claiming the advantages of having been an employee; in so far as the categorisation is not done in bad faith. In Vidanelage v Gibsonm (unreported), 119 the ET sitting at London South held the claim of a domestic worker who was registered with the HMRC as self employed was not barred on illegality because she did not collide with her employers to cheat the HMRC. In determining if the worker has been dismissed within the meaning of s.95 ERA, 1996, the onus is on the Claimant to show that he/she has been dismissed.120
A domestic worker who tendered his/her resignation with or without notice may not be able to assert a claim to unfair dismissal;121 except where it could be argued that the resignation is a constructive dismissal or, one that is forced on him/her.122 The next hurdle that a domestic worker must cross is the qualifying period. Under s. 108 ERA, 1996, an aggrieved worker who wishes to claim unfair dismissal must show that he/she has the relevant two years continuous service.123 This is highly detrimental, especially for domestic workers admitted to the UK on or after the 6th April 2012 who have a maximum of 6 months to reside and work in the UK.
118 [2008] EWCA Civ. 393; [2008] I.C.R. 1423
119 ET2303426/2009 & ET2303547/2009, at para 47
120 See the dicta of May LJ in Morris v London Iron and Steel Co Ltd [1988] Q.B. 493, at 505
121 See Johnson v Unisys Ltd [2001] UKHL 13
122 See Hussey v Photogenic Ltd [2010] All ER (D) 49 (Sep) EAT
123 The Unfair Dismissal and Statement of Reasons inserts the two years requirement for Dismissal (Variation of Qualifying Period) Order 2012, SI 2012/989 (in force on 6 April 2012). Further, this statutory instrument amends s 92(3) ERA 1996 to increase from one year to two years the qualifying period of continuous employment needed for the entitlement, on request, to a written statement of reasons for dismissal.
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Although one may argue that the 2-year waiting period indirectly discriminates against the ODWs, the discrimination may be justified by the Secretary of State under the need to control immigration. In R. v Secretary of State for Employment Ex p. Seymour-Smith (No.2),124 the House of Lords (now Supreme Court) upheld the Secretary of State’s appeal against the Court of Appeal decision 125 that the Unfair Dismissal (Variation of Qualifying Period) Order 1985 that modified the requirement for claiming unfair dismissal was indirectly discriminatory against women, and therefore incompatible with the principle of the Equal Treatment Directive. Their Lordship accepted the extension had a considerable adverse effect on women because a smaller percentage of women as compared to men were able to satisfy the qualifying period, but held that the Government was justified by objective factors unrelated to sexual discrimination that the main objective of the 1985 Order was to encourage recruitment by employers. An exception to the qualifying period is where the ODW has been automatically unfairly dismissed. For instance, where the ODW has been dismissed for asserting a statutory right,126 or making a protected disclosure.127 For the ODWs admitted to the UK before 6th April 2012, a potential hindrance to claiming unfair dismissal is if the employer decides to terminate their contract a few days or months before the two-year qualifying period. Although the statutory notice period may assist a domestic worker’s claim for wrongful dismissal, except if and when s.97(2) ERA, 1996, read with s.86(1) of the Act could make the effective date of termination fall within the qualifying period, a claim of unfair dismissal would be barred.128
124 [2000] 1 W.L.R. 435; [2000] 1 All E.R. 857; [2000] 1 C.M.L.R. 770; [2000] I.C.R. 244; [2000] I.R.L.R. 263
125 [1997] 1 W.L.R. 473
126 In Ward v Ashkenazi [2011] EWCA Civ. 172 CA (Civ. Div.), the Claimant, a housekeeper for less than a year was dismissed after she exercised her right under s.1 ERA 1996. The ET whose decision was upheld by the EAT and the court of appeal rules her dismissal ‘automatic unfair’ under s. 104 ERA 1996. In addition, the Claimant recovered damages under s. 38 Employment Act 2002 with an upliftment under s. 31 of the same Act.
127 Vidanelage v Gibson ET 2303426/2009 & 2303547/2009 (unreported)
128 See Harper v Virgin Net Ltd [2004] EWCA Civ. 271; [2005] I.C.R. 921
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Nonetheless, where a Tribunal has found that a domestic worker has been unfairly dismissed, the domestic worker would be entitled to compensation for loss of earnings and as the Court deemed fit.