Ever heard of reinstatement or re-engagement? It’s unsurprising if not, as they are the outcome of less than 1% of Employment Tribunal cases.
If an Employment Tribunal orders that an unfairly dismissed employee is reinstated, it means that they must be re-employed on the same terms they enjoyed before their dismissal. If re-engagement is ordered (on terms determined by the Employment Tribunal), the employer must engage the employee on comparable employment terms, or in other suitable employment with itself, or possibly its successor or an associated employer.
The third and most common outcome of a successful unfair dismissal case is that the employer is ordered to pay the employee compensation. However, there are some instances where re-employment orders are an employee’s most lucrative option. The recent case of Jones v JP Morgan Securities plc illustrates this point.
Bradley Jones was a Financial Analyst and trader at JP Morgan. He was recruited in 2011 and progressed to be a “well-liked, respected, and trusted employee”.
In 2020, he was dismissed for allegedly committing the gross misconduct of “spoofing” in 2016.
Spoofing involves a trader placing a bid or offer, intending to cancel it, to give a misleading impression of the supply or demand of a particular commodity. This can result in a change in the price of that commodity which the trader can then exploit by trading at the new price. Spoofing breaches traders’ regulatory rules and constitutes a criminal offence.
JP Morgan determined in 2016 that Mr Jones’ conduct one afternoon was not spoofing, so there was no need to take disciplinary action. However, following a change of spoofing policy and an internal review, JP Morgan revisited its decision in 2019. Mr Jones was disciplined and dismissed for engaging in spoofing.
Mr Jones claimed that he had been unfairly dismissed by JP Morgan. The Employment Tribunal agreed, finding that JP Morgan had changed its approach out of a “desire to appease its regulators” by demonstrating that it was “clearing up its act”. This meant that Mr Jones had not been dismissed for a potentially fair reason, but “rather to further [JP Morgan’s] desire to appease its regulators”. This rendered the dismissal unfair.
Mr Jones had asked the Tribunal to reinstate him into his previous role and, failing that, to be re-engaged by JP Morgan or an associated employer. The Tribunal decided that reinstatement would not be practicable, as there had been redundancies in Mr Jones’ team and suitable positions were now full. The Tribunal ordered that Mr Jones be re-engaged to a comparable or suitable role in Hong Kong with an associated employer.
The significance of reinstatement and re-engagement orders is that they generally require the employer to pay to the employee all the salary and benefits (including any applicable pay rises) they have not received between their dismissal and re-employment. Here, this meant that JP Morgan was ordered to pay Mr Jones an enormous £1,588,489.87 for arrears of pay.
In contrast, compensation for unfair dismissal is subject to a statutory cap which, at the time of Mr Jones’ dismissal, was £86,444.
The statutory cap changes annually and will increase to £93,878 for unfair dismissals occurring from 6 April 2022. This case highlights the dangers of re-employment orders for employers with high earning employees, whose salaries exceed the statutory cap.
If you have any queries regarding this or any other employment matter, please do not hesitate to contact a member of the team.
