Supreme Court blocks common law unfair dismissal claims

The Supreme Court has refused to allow workers to bring common law claims against their employers on the grounds that the way they were dismissed breached their employment contracts.

Both claimants in separate cases dealt with by the court this morning had employment contracts with express terms governing dismissal procedures and in both cases the procedures were not followed.

Lord Dyson said that when parliament introduced our unfair dismissal laws 40 years ago it 'could not have intended that the inclusion of these provisions in a contract would also give rise to a claim for damages'.

Edwards, an orthopaedic surgeon, argued that his contract of employment entitled him to have a disciplinary panel including a clinician of the same medical discipline as himself and a legally qualified chairman. Neither of these were features of the disciplinary hearing that dismissed him for gross misconduct.

Botham was employed by the MoD as a youth worker. He was dismissed for gross misconduct following allegations that he had behaved inappropriately in relation to two teenage girls.

An employment tribunal later found that he had been unfairly dismissed and that his summary dismissal was in breach of contract, based on a number of findings including that the MoD had committed breaches of the express and implied terms of his contract of employment.

Delivering judgment in Edwards v Chesterfield Royal Hospital NHS Foundation Trust [2011] UKSC 58, Lord Dyson said: 'The unfair dismissal legislation precludes a claim for damages for breach of contract in relation to the manner of a dismissal, whether the claim is formulated as a claim for breach of an implied term or as a claim for breach of an express term which regulates disciplinary procedures leading to a dismissal.

'Parliament has made certain policy choices as to the circumstances in which and the conditions subject to which an employee may be compensated for unfair dismissal.'

Lord Dyson said a dismissal could be unfair for a variety of reasons, not just because agreed procedures were not followed, but complaints were intended to be adjudicated by specialist employment tribunals.

'Parliament did not intend that an employee could choose to pursue his complaint of unfair dismissal in the ordinary courts, free from the limitations carefully crafted by parliament for the exercise of this statutory jurisdiction.'

Lord Dyson upheld the ruling of the House of Lords in Johnson v Unisys [2001] UKHL 13, and said the cases of Edwards and Botham fell within the 'Johnson exclusion area'.

He rejected the argument put forward in the dissenting judgments of Lady Hale and Lords Kerr and Wilson that claims such as those made by Edwards and Botham would have been available as common law claims for breach of contract before the Industrial Relations Act 1971 and that neither that statute nor its successors should be interpreted as having taken away existing rights enjoyed by employees.

Lord Dyson allowed the appeals. Lord Walker agreed, together with Lord Phillips and Lord Mance, for their own reasons. Lady Hale, Lord Kerr and Lord Wilson dissented.