Statutory restriction dismissals – key considerations by tribunals
This article was originally published in Legal Island Employment Law Hub, October 2022.
Over the past year, the Northern Ireland employment team prepared a series of external articles on potentially fair reasons for dismissal. This article deals with dismissals for reasons of statutory restriction.
What is a statutory restriction dismissal?
Statutory restriction dismissals are defined at Article 130 (2) (d) of the Employment Rights (Northern Ireland) Order 1996 as:
The employee could not continue to work in the position which he held without contravention (either on his part or on that of his employer) of a duty or restriction imposed by or under a statutory provision.
This provision covers a broad range of scenarios and where continued employment of the employee would lead to a breach of a statutory restriction. Common examples that we encounter when advising clients are where:
- An employee loses their right to work in the UK and continued employment would constitute a breach of immigration rules.
- An employee is unable to continue in a regulated profession owing to a decision by a professional disciplinary tribunal or regulatory body.
- An employee is employed in a driving role, requiring a driving licence, and they are disqualified from driving.
As a result of Brexit and the closure of the pre-settled status scheme, we have noticed a marked increase in dismissals resulting from an employee losing the right to work in the UK.
Employers will not be liable for civil penalties (which can be up to £20,000 per illegal worker) for continuing to employ an employee who cannot prove their right to work in the UK if they can establish a statutory excuse. This can be established by conducting satisfactory right to work checks.
Upon becoming aware that an employee has lost the right to work in the UK, employers should investigate the reasons as to why the position regarding the right to work has changed and advise the employee to take steps to regularise their immigration position. The employer may need to take steps to terminate the employee’s employment if the right to work issues cannot be resolved. Knowingly employing someone you are aware does not have the right to work in the UK may also result in criminal prosecution, but employers can usually rely on a 28-day grace period once the right to work has come to an end.
A fairly straightforward example of when a statutory restriction dismissal could arise is in the context of professional regulatory proceedings.
Such an example would be a firm of solicitors in private practice employing a member of staff as a practising solicitor. If that member of staff were struck off the roll following regulatory proceedings by the Solicitors Disciplinary Tribunal, the employer would be unable to continue employing them in that role.
Similar examples may arise in any number of regulated professions.
Requirement to hold a driving licence
A relevant case involving a statutory restriction dismissal was determined by the Employment Tribunal in England and Wales in St-Hilaire v Keltbray Ltd . This case involved an HGV driver being dismissed as he did not have a valid HGV licence.
The tribunal held that the absence of an HGV licence was a valid ground for a statutory restriction dismissal. The tribunal concluded that the process adopted by the employer in this case (or rather lack of a process) was unfair but applied a 100% Polkey reduction and a 75% contributory fault reduction. This had the effect of greatly reducing the claimant’s damages.
Employers should be reminded that in such cases they are under a duty to investigate whether suitable alternative employment is available for an employee.
Genuine but mistaken belief
A statutory restriction dismissal will only be fair where continuing employment would actually contravene a statutory restriction. It is not sufficient to genuinely, but mistakenly, believe this to be the case. This is in contrast to the position for dismissal for conduct where such a dismissal could be fair if it was a reasonably held belief, following a reasonable investigation.
This was the case in Baker v Abellio London Ltd , where the Employment Appeals Tribunal (EAT) in England and Wales overturned a tribunal decision which held that an employer’s reasonable but mistaken belief that an employee did not have the right to work in the UK justified his dismissal. However, the EAT held that the dismissal was fair as it was for one of the other potentially fair reasons – “some other substantial reason”.
The statutory three-step dismissal process should be followed in dismissals on the basis of statutory restriction. This will require the employer to:
- Send the employee a written statement describing the reasons and circumstances leading them to consider dismissal.
- Invite the employee to a meeting before action is taken. The employee will have the right to be accompanied. The employee must be given reasonable time before the meeting to consider the reasons leading the employer to consider dismissal. The employee must be notified of their right to appeal.
- If the employee appeals the employer must invite them to a further meeting and the employer must inform the employee of their decision.
Statutory dismissals offer a potential avenue for employers to end an employment relationship where failure to do so would leave them in breach of the law. Given the requirement for an actual statutory breach to justify such a dismissal, employers should carry out a thorough investigation to establish the facts. Where this is not possible, employers should be aware of other potential avenues of dismissal to minimise their risk.
In the context of Brexit and stricter immigration requirements, employers may see an increase in such dismissals going forward.