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Money for nothing?! Why sacked employees are chasing interim relief

Introduction

Interim relief sounds like an amazing deal for an employee who believes they have been unfairly dismissed. If they can persuade a judge that they are likely to win their claim at the final hearing, the judge can order their former employer to keep paying their salary until the trial! Given the lengthy delays in the employment tribunal system, surely making this application is a no-brainer for a recently dismissed employee?

Anecdotal evidence suggests that interim relief applications are gaining in popularity, with the increasing number of employees losing their jobs, and the pandemic making the already slow tribunal system even more sluggish – many claims issued this year won’t be heard until 2022.

But interim relief is a tricky beast. A sacked employee has many hurdles to overcome, and awards are rarely made. For employers, it’s draconian, because if they are ordered to keep paying their former employee, they can’t recover that money even if they ultimately defeat the claim. So this guide aims to help both employees and employers understand how interim relief applications work, the hurdles and pitfalls, and how best to present or defend an application.

What is interim relief?

In the employment context, “interim relief” is a mechanism whereby an employee who has been dismissed, in certain situations can apply for an order that the employment relationship with their former employer continues until the trial of their claim. If successful, the applicant will either be given back their old job, given another job with the same employer, or failing that will simply continue to be paid their salary, until the final hearing.

This is an unusual remedy, because it is rare that the courts will compel an employer to continue to employ someone – it offends the principle that parties are free to contract (or not contract) with whomsoever they wish.

Interim relief has its origins in trade union law. As Girvan LJ said in Bombardier Aerospace/Short Brothers plc v McConnell & Ors [2008] IRLR 51: “The interim relief provisions were a response to the problem of dismissals of trade unionists which have the potential to generate suspicion of victimisation which on occasions can result in industrial unrest and industrial action… an application for interim relief is intended to head off industrial trouble before it begins or at least before it becomes too serious by allowing an employment tribunal to give a preliminary ruling at an emergency hearing.”

Over time the scope of the relief has expanded, and it can now be sought in a number of situations specifically identified by Parliament as never being fair dismissals. It has become particularly popular in cases where an ex-employee claims they were dismissed for making a protected disclosure – or “whistleblowing”.

What types of dismissal allow an ex-employee to bring a claim for interim relief?

An applicant must bring himself within the narrow confines of s128(1) of the Employment Rights Act 1996 (“ERA”) by claiming that the reason, or if more than one the principal reason for their dismissal, is one of the following:

  • Carrying out certain health and safety activities (s100(1)(a) and (b) ERA) – but note, dismissals arising out of health and safety matters as set out in s100(1)(d) or (e), such as refusing to return to the workplace in circumstances of danger, are not caught;
  • Certain activities as a working time workforce rep (s101A(1)(d) ERA);
  • Performing any functions as a trustee of a relevant occupational pension scheme (s102(1) ERA);
  • Performing certain functions as an employee rep for the purpose of TUPE or redundancy consultation (s103 ERA);
  • Whistleblowing (s103A ERA);
  • Blacklisting (s104F ERA);
  • Various trade union reasons including obtaining or preventing union recognition, collective bargaining or balloting under paragraph (not section!) 161 of Schedule A1 of the Trade Union and Labour Relations (Consolidation) Act 1992 (“TULRCA”).

There is also a parallel provision for employees to apply for interim relief at section (not paragraph!) 161 of TULRCA if they claim their dismissal is unfair because it relates to trade union membership or activities under s152 TULRCA. In most of these cases, the applicant must also provide a certificate signed by an authorised official of the union to certify the applicant’s membership or proposed membership of the union, and that there appear to be reasonable grounds for alleging his dismissal was for the prohibited reason (s161(3) TULRCA).

Thus interim relief is only available in a narrow set of situations – the employee who claims he was unfairly dismissed for the more common conduct or capability reasons cannot apply for interim relief.

Even some types of claims for automatically unfair dismissal do not provide a gateway to an interim relief application. For example, if the claimant says that they were selected for redundancy because they made a protected disclosure, this does not allow them to claim interim relief, because s105(6A) ERA (relating to allegations that selection for redundancy was due to whistleblowing) is not one of the “gateway” provisions listed in s128 ERA. The selection process might make a redundancy unfair, but the selection was not in itself the reason for the dismissal, and interim relief is focused on the reason for the dismissal. Moreover, in a genuine redundancy situation the remedies offered via interim relief, such as reinstatement, may simply no longer be available.  

Further requirements for making an interim relief application

  • The applicant must be an employee: workers (or the self-employed) cannot obtain interim relief.
  • The claim must be brought within seven days of the effective date of termination: s128(2) ERA; s161(2) TULRCA. If the employee is working their notice, they can make the application during the notice period. Seven days is a very tight time limit and it is not possible to extend it.    

However:

  • The employee does not need two years’ service, unlike with an “ordinary” unfair dismissal claim
  • The employee does not need to have gone through the ACAS Early Conciliation process before making the application (reg 3(1)(d) of the Employment Tribunals (Early Conciliation: Exemption & Rules of Procedure) Regulations 2014). Box 2.3 on form ET1 makes clear that an interim relief application is one of the exemptions to the requirement to complete ACAS Early Conciliation.

The highest hurdle: persuading the Judge it is “likely” they will succeed at trial

To obtain interim relief, under s129 ERA (or s163 TULRCA), the applicant must persuade the Tribunal that it is “likely” that they will succeed at the final hearing in proving that the reason or principal reason for their dismissal was the inadmissible reason they rely on. This is where many applications fail, as it is a high test.

The word “likely” has been extensively considered by the courts. In Taplin v C Shippam Ltd [1978] ICR 1068, EAT, Slynn J held (§1074F) that in an application for interim relief, the tribunal should “ask themselves whether the applicant has established that he has a ‘pretty good’ chance of succeeding in the final application to the tribunal.” He also made clear that the standard of proof is higher than that of a reasonable prospect of success: “We do not consider that Parliament intended that an employee should be able to obtain an order under this section unless he achieved a higher degree of certainty in the mind of the industrial tribunal than that of showing that he just had a ‘reasonable’ prospect of success” (§1074B).

The result of this is that a claimant seeking interim relief has to reach a higher standard of proof than applies at the final hearing! 

Despite challenges over the years, Taplin is still good law. For example, in Dandpat v University of Bath (UKEAT/0408/09/LA) (Underhill P presiding) it was held (at §20) that “Taplin has been recognised as good law for 30 years. We see nothing in the experience of the intervening period to suggest that it should be reconsidered… We do in fact see good reasons of policy for setting the test comparatively high… in the case of applications for interim relief. If relief is granted the respondent is irretrievably prejudiced because he is obliged to treat the contract as continuing, and pay the claimant, until the conclusion of proceedings: that is not [a] consequence that should be imposed lightly.”

And in London City Airport Ltd v Chacko (UKEAT/0013/13/LA), Mr Recorder Luba QC observed (at §10): “It must, on the authority of Taplin, be established that the employee can demonstrate a pretty good chance of success. While that cannot substitute for the statutory words, it has been the guiding light as to the meaning of “likely” in this context that has been applied over the subsequent three or more decades by the EAT”.

A claimant who successfully obtains interim relief, but does not succeed at the final hearing, is not obliged to repay the salary he received, even if he did no work for the employer between the interim relief and the final hearings. There is no mechanism to recover that money. As Mr Justice Wood (President) said in Initial Textile Services v Rendell (UKEAT/383/91) at page 3: “it is abundantly clear that money paid under the provisions will be irrecoverable and there is no provision for paying it into a fund or into a Court; there is no limit of time for the period which is relevant…”. This potentially punitive feature of interim relief is one reason that the standard of proof is so high.

What must the applicant show?

To demonstrate that it is “likely” (to the standard discussed above) that they will succeed in making out their claim at the final hearing, the applicant must persuade the Judge of this in relation to all the elements of the claim that would be considered at the final hearing. The burden is on the applicant to prove their case.

Take for example a whistleblowing claim, which is a common basis for an interim relief application. The applicant must succeed on each element of the claim. So, as Underhill P put it at §14 of Ministry of Justice v Sarfraz (UKEAT/0578/10/ZT), “in order to make an order under sections 128 and 129 the Judge had to have decided that it was likely that the Tribunal at the final hearing would find five things: (1) that the Claimant had made a disclosure to his employer; (2) that he believed that the disclosure tended to show one or more of the things itemised at (a) to (f) under section 43B; (3) that that belief was reasonable; (4) that the disclosure was made in good faith; and (5) that the disclosure was the principal reason for his dismissal”. (Note that since the decision in Sarfraz, the “good faith” test has been replaced with a test of whether the applicant reasonably believed the disclosure to be in the public interest.)

This rule does not just apply to the merits of the claim itself, but to all elements that must be proved at the final hearing. So for example, if there is a dispute over the employment status of the claimant who seeks interim relief (which, as noted above, is only available to employees), the judge hearing the interim relief application should also consider the employment status issue and decide whether, on the Taplin basis, it is likely that the applicant will show that they are an employee at the final hearing (Hancock v Ter-Berg and Anor (UKEAT/0138/19). This case also held that an interim relief hearing should not be delayed while an initial issue such as employee status is decided. All these matters should be decided at the interim relief hearing.

Another example of what might be thought a preliminary issue being considered at the interim relief application is that of the alleged illegality of the contract: this, if raised, can also be considered and decided to the same Taplin standard: Al Qasimi v Robinson (UKEAT/0283/17).

How should the respondent oppose an application for interim relief? 

A respondent may have little time to deal with this application: under s128(3) ERA the tribunal must hear the application “as soon as practicable after receiving the application” albeit it must give the employer at least seven days’ notice of it (s128(4) ERA). It is very hard to postpone the hearing of the application – under s128(5) ERA there must be “special circumstances” before that can happen (although the availability of a direct access barrister has been held to constitute “special circumstances”: Lunn and Anor v Aston Darby Group Ltd and Anor UKEAT/0039/18).

So the respondent must act fast. Ideally it should put in a witness statement, and provide key documents, going to the heart of what the respondent says was the (fair) reason for dismissal. As the Judge is making a broad-brush assessment of the merits, it will be hard for an applicant to persuade the Tribunal that it is “likely” that they will succeed at the final hearing if there is a cogent alternative narrative from the respondent.

In a statement prepared for the interim relief hearing, there is no need to go too deeply into peripheral issues or procedural matters: the focus should be on the reason for the dismissal. Note however that as a fuller witness statement will no doubt be required for the final hearing, the statements for each hearing should be consistent with each other. A respondent whose position changes at the final hearing will then face obvious difficulties.

What happens at the interim relief hearing?

Interim relief applications are generally decided at a hearing based on the papers before the Judge, plus the parties’ oral submissions, and the usual rule is that no oral evidence is heard. Rule 95 of Schedule 1 of the Employment Tribunals (Constitution & Rules of Procedure) Regulations 2013 (“the Regulations”) says that the Tribunal “shall not hear oral evidence unless it directs otherwise”. There is nothing to stop a party asking to cross-examine the other side’s witness(es), but permission for this may not be granted. Hearings often have limited time. These days, an interim relief application is likely to be held remotely over a video platform.

Rule 95 also specifies that rules 53 to 56 of the Regulations apply to interim relief hearings, and these provisions make clear that the interim relief hearing is a preliminary hearing, it is heard by a Judge sitting alone (although there is provision to apply for a panel under rule 55), and it is a public hearing.

The Tribunal will inevitably have far less material before it than at the final merits hearing. Often, it may have nothing more than the claimant’s ET1 claim form. The respondent is under no obligation to provide its ET3 response early in order to present it for the interim relief hearing, although an employer who is able to provide it in time may wish to do so.

The authorities show that the Judge hearing the application needs to make a brisk, summary assessment based on the material available. As Mr Recorder Luba QC put it in Chacko at §23: “The application falls to be considered on a summary basis. The employment judge must do the best he can with such material as the parties are able to deploy by way of documents and argument in support of their respective cases ... what this requires is an expeditious summary assessment by the first instance employment judge as to how the matter looks to him on the material that he has. The statutory regime thus places emphasis on how the matter appears in the swiftly convened summary hearing at first instance which must of necessity involve a far less detailed scrutiny of the respective cases of each of the parties and their evidence than will be ultimately undertaken at the full hearing of the claim.”

And in Parsons v Airplus International Ltd (UKEAT/0023/16/JOJ), HHJ Shanks observed (at §8): “On hearing an application under section 128 the Employment Judge is required to make a summary assessment on the basis of the material then before her of whether the Claimant has a pretty good chance of succeeding on the relevant claim. The Judge is not required (and would be wrong to attempt) to make a summary determination of the claim itself … her decision will inevitably be based to an extent on impression …”.

The Judge who hears the interim relief application should not conduct the final hearing: British Coal Corporation v McGinty [1987] ICR 912.

What happens if the applicant succeeds at the hearing?

This can be a heavy burden for an employer. As s129(3) ERA and s163(2) TULRCA set out, if the applicant succeeds, the Tribunal will ask whether the employer is prepared to reinstate them into their old job, or to re-engage them on terms at least as favourable as those of their old job.

The employee has to agree to any re-engagement (s129(6) ERA; s163(5) TULRCA). If their refusal is considered unreasonable, the Tribunal will not make any order (s129(8)(b) ERA; s163(5)(b) TULRCA).

Reinstatement or re-engagement may not be appealing to an employer who may well not wish to have that former employee back in their workforce, having just dismissed them. If neither reinstatement nor re-engagement are possible, the Tribunal will order a continuation of the contract, so the employer has to continue to pay the successful applicant but will not have the benefit of their labour (ss129-130 ERA and ss163-164 TULRCA). Note that a continuation order will also result if the respondent does not attend the hearing of the interim relief application (s129(9)(a) ERA; s163(6) TULRCA), so an employer must not ignore the application – it could turn out to be an expensive mistake.

If there is a significant change of circumstances after the interim relief hearing but before the final hearing, either party can apply to the Tribunal to vary or revoke the order made at the interim relief hearing (s131 ERA; s165 TULRCA).

If an employer fails to comply with an order for re-instatement or re-engagement made at an interim relief hearing, the employee can apply for an order for continuation of the contract and for compensation (s132 ERA; s166 TULRCA).

Top tips for claimants

  • Act fast – the application for interim relief must be submitted within seven days of the effective date of termination.
  • Use the application to put pressure on the respondent to settle – especially if interim relief is awarded.
  • Ensure that all the elements of the claim that need to be decided at the final hearing are thought through: is there a good argument on each stage?
  • Keep the focus on the reason for the dismissal but be prepared to deal with peripheral issues such as employment status if that is likely to be in dispute.
  • The employer may not yet have served the ET3, so the employee needs to think carefully to anticipate the arguments the respondent is likely to run.

Top tips for respondents

  • Put in as strong a case on paper as can be prepared in the short time available.
  • Check that the employee has complied with all the formalities set out above.
  • Make sure that the Tribunal has given the correct notice of the hearing of at least seven days.
  • Focus on the reason for the dismissal and if possible, put in evidence as to the fair reason the respondent will rely on.
  • Focus on chipping away at any obvious weaknesses in the claimant’s case.
  • If interim relief is awarded, argue for as early a final hearing as possible.
  • Above all, turn up! Failure to attend the hearing automatically results in an order being made in the claimant’s favour.

 

Click here to view Catherine Urquhart's profile


24.08.2020