Joanne Sefton on what the other lawyers won’t tell you

There’s a received wisdom amongst lawyers that updates, blogs and articles like this should focus on the risks arising to employers from the particular scenario being discussed. That’s what HR departments need to know about, and (as a happy upside) playing up the risks creates worry and therefore drives business for us lawyers.

Given, therefore, that the Court of Appeal have recently handed down an interesting decision on the remedy of reinstatement in unfair dismissal cases, I’ll be willing to bet that there will be more than a few emails pinging into inboxes to helpfully remind you of the Armageddon-esque prospect of having to take back an employee you’ve spent the last 18 months slugging it out with in the Tribunal. However (because we like to be a little bit different at Mitchell Law) I’m here to say… chill.

The Employment Rights Act positions reinstatement (returning to the same role) and re-engagement (returning to a different role with the same employer) as the primary remedies for unfair dismissal. Only if they are not sought by the Claimant, or are impracticable, will the Employment Tribunal go on to consider a full compensatory award in the usual way. As any article on the subject will tell you, however, it is “very rare” for Tribunals to actually make such an order. The figure of ‘under 1%’ is often bandied around.

Over the years, I’ve been involved in many more than 100 unfair dismissal claims, and I’ve never seen such an order being made. I believe I’ve seen unsuccessful applications made on just two occasions. That got me wondering how rare “very rare” actually is.

A dig around in the Employment Tribunal statistics revealed this:

Year Total unfair dismissal claims
disposed of by the ETs
Number of reinstatement
or re-engagement orders
%
2014-15 18,387 5 0.027%
2015-16 14,549 7 0.048%
2016-17 9,039 3 0.033%

In 2018-19 they seem to have stopped giving separate figures, with the equivalent table dealing only with levels of compensation, perhaps because the numbers involved are so vanishingly tiny. So we’re not just talking ‘under 1%’, we’re talking about less than 1 in 2,000 cases. For comparison, mortality rates for over-25s in the UK tend to be about 0.2-0.4%, so you probably have more chance of your Claimant actually dying during the litigation process than being awarded either type of re-employment order.

When you think about it, there are good reasons why re-employment orders are not something that would happen every day:

  1. First, the Claimant has to win their case. Most cases are settled, and strong cases are even more likely to settle, so that narrows the field.
  2. The Claimant has to want reinstatement/reengagement. For obvious reasons, this will be the last thing most ex-employees are interested in at this stage. Some will indicate early in the process that this is what they are seeking only to change their mind when it comes to remedy (far be it from us to suggest that may occasionally be tactical).
  3. The ET has to consider whether it is ‘reasonably practicable’. Whilst the factors that can be taken into account are many and varied, the bottom line is that most small or medium sized employers will very easily be able to show that it wouldn’t work for the claimant to come back into their organisation. A national company who can redeploy the claimant into a different team without the ‘baggage’ might have a trickier argument.
  4. The ET also has to consider whether the employee contributed to their dismissal. Whilst the law doesn’t absolutely bar employees from being reinstated or re-engaged in those circumstances, this is probably a decisive argument against it for all practical purposes.
  5. Although not part of the statutory test, one factor which may well influence how likely claimants are to go for reinstatement, as well as how likely the Tribunal is to order it, is whether there is a particular need or advantage to them being employed by that organisation. The Court of appeal case mentioned above (MacKenzie v University of Cambridge) involved a law professor who presumably wished to remain with a pre-eminent department (and, in fact, continued to work there on a casual basis). One 2016 case involved a police fingerprint specialist – I can’t imagine there are many opportunities to pursue that career outside the police.

Whilst all those reasons would naturally lead to only a limited number of orders being made, my feeling is that they don’t quite account for the really tiny numbers shown above. It does rather beg the question as to why we have a remedy – and a remedy which supposedly takes precedence – which to all intents and purposes is never used. To my mind, the very idea of re-employment orders fundamentally misjudges the modern reality and psychology of the litigation process. Once upon a time, the ET might once have been envisaged as a quick, informal forum where the parties might have had their head knocked together before the claimant returned to his place on the production line or shop counter. It’s not like that any more (I doubt it ever was).  After a Herculean slog through today’s tribunal battlefield, most of those involved would probably echo the look of abject horror on the face of one particular claimant client of mine when I asked him if he wanted to request re-employment. As he put it: ‘I’ll take the money and run, thanks, love.’ I believe most tribunals, having witnessed a hearing go on for several rancorous and emotional days, if not longer, understand that the prospect of reviving a working relationship is almost always a non-starter. The tiny numbers are an acknowledgment of a fundamental truth – this is a remedy that works in the imaginations of parliamentary drafting lawyers, not on the ground.

What’s more, the legislation is explicit that employers who fail to comply with a reinstatement or reengagement order will have to pay a normal compensatory award, plus a penalty of between 26-52 weeks’ pay. There can be no question of the courts ultimately forcing an employer to take someone back – a point which appears clear on the face of the statute and was confirmed in MacKenzie.

In that case the claimant was granted a reinstatement order, but the university refused to comply with it. In effect, she tried to seek an injunction to force them to have her back, but this was roundly rejected. Because she was a highly-paid employee, the amount of the compensatory award and the additional award was only marginally more than the backpay which she would have been entitled to if they’d complied with the reinstatement order.

For all those reasons, I don’t tend to encourage clients to take into account the risk of reinstatement when they are weighing up the odds or considering how much to offer in a settlement. Just like I don’t encourage them to factor in their key witness winning the lottery, or the ETs all being closed down in a post-Bexit social meltdown. I mean, it might happen, but… Of course, if we had a claimant that looked like a very strong candidate for reinstatement then we’d discuss it – still emphasising the extremely low probability.

If you are used to employment lawyers taking a woollier attitude to risk, you might find our approach is refreshingly different. Please get in touch if you would like to talk to us about an unfair dismissal claim, or any other employment law issue.