Reinstatement, being the re-employment of the employee back into the role he was unfairly dismissed from (as though the dismissal had never occurred), is one possible remedy in the UK for unfair dismissal. In the high-profile case Chagger v Abbey National plc & Hopkins (2006), the Employment Tribunal found that Mr Chagger had been unfairly dismissed, and that both Santander Abbey National (the Spanish-owned UK bank due to be re-branded as Santander, and being part of the Banco Santander Group) and Mr Hopkins had discriminated against Mr Chagger on the grounds of race in respect of his dismissal. The Employment Tribunal took the rare step of ordering Abbey Santander to reinstate Mr Chagger in order to remedy its wrongdoing. Santander Abbey National, however, refused to comply with the Employment Tribunal’s reinstatement order. Following Abbey Santander’s refusal and failure to comply with the reinstatement order, the Employment Tribunal subsequently ordered Abbey Santander to pay Mr Chagger the record breaking 2.8 million compensation for his loss on the basis that he had not been reinstated. Santander Abbey National had terminated Balbinder Chagger’s employment in 2006, giving redundancy as the reason. He was employed as a Trading Risk Controller, earned about 100,000 per year, reported into Nigel Hopkins and was of Indian origin.
UK law views reinstatement of the unfairly dismissed employee as the primary remedy for unfair dismissal; reinstatement of the employee permits him to continue to enjoy the economic benefits of the role in the future and also restores the mental satisfaction that he enjoyed from his role. If reinstatement of the employee is not practicable, UK law then usually views reengagement as the next best remedy. Reengagement is re-employment of the employee into a different role to the one he was unfairly dismissed from (on terms and conditions as close as is reasonably practicable to those he was unfairly dismissed from).
After an Employment Tribunal makes a finding of unfair dismissal, it must ask the unfairly dismissed employee whether or not he wishes to be reinstated or reengaged. If the employee wishes to be reinstated or reengaged, then the Employment Tribunal has complete discretion as to whether or not to issue a reinstatement order or reengagement order. The Employment Tribunal will consider whether it is practicable for the unfairly dismissed employee to return to work for the employer and, where the unfairly dismissed employee was partly to blame for the dismissal, whether or not it would be just and equitable to issue such a reinstatement order or reengagement order.
Although they are the primary remedies, Employment Tribunals rarely ever order reinstatement or reengagement though. That’s because the reality of the process of litigation is that its vexatious nature often leaves the relationship between the employer and the unfairly dismissed employee beyond repair such that it is no longer possible for them to work together anymore; only in rare cases do Employment Tribunals decide that the relationship remains workable.
When an Employment Tribunal orders reinstatement or reengagement, then it is open for the employer to refuse to re-employ the unfairly dismissed employee. Unless the employer satisfies the Employment Tribunal that it was not practicable to comply with the reinstatement order or reengagement order, then the employer’s refusal to comply with the Tribunal’s wishes will give rise to increased compensation for the unfairly dismissed employee. If the Tribunal is dissatisfied with the employer’s reasons for refusing to comply with its wishes, then the employer will have failed to comply with what the law views as the best solution to rectify the wrong committed; then the Employment Tribunal will proceed to consider and award compensation as the next best remedy to address the employer’s wrongdoing.
Requesting reinstatement and/or reengagement may prove to be tactically useful for an unfairly dismissed employee because the employer’s failure to comply entitles him to be compensated in full for all his loss of earnings from the date of the unfair dismissal to the date of the reinstatement/reengagement order; the statutory limit (or cap) on the compensation amount does not apply. So, if the unfairly dismissed employee’s losses to the date of the hearing exceed the statutory limit, then reinstatement/reengagement should be seriously considered. Furthermore, employers generally dislike re-employing an unfairly dismissed employee so much that a credible application for re-employment could lead to higher offers of settlement from the employer. If the employer complies with the order of reinstatement/reengagement, then the employee will be expected to comply too.
The Chagger case did not end at the Employment Tribunal stage, however. The case was subsequently escalated to the Employment Appeal Tribunal (EAT), and recently had escalated to the second highest court in UK, the Court of Appeal. The Court of Appeal’s website showed the case was heard on 7 and 8 July 2009. The Court of Appeal’s records of the case were not available at the time of writing this article. However, the King’s Bench Walk set of barristers’ chambers reported (through their website) that the hearing was limited to the issue of compensation only (not race discrimination also). That suggests that the wrong of race discrimination committed by Santander Abbey National and Mr Hopkins seemed to have been finalised by the EAT, which upheld the original Employment Tribunal’s judgement that Mr Hopkins and Abbey Santander had discriminated against Mr Chagger on the grounds of race in his dismissal.