Employment Update: SDDP



Under the SDDP, an employee does not have to be told in writing of their right of appeal against dismissal.

The SDDP (which applies to all employers) provides that, before any dismissal, the employee must be invited to a meeting to discuss the dismissal and (section 29(4) Employment Act 2002) ‘after the meeting, the employer must inform the employee of his decision [to dismiss] and notify him of the right to appeal against the decision if he is not satisfied with it’.

Section 98A of the Employment Rights Act 1996 states that a dismissal is automatically unfair if the SDDP applies but has not been complied with by the employer. Furthermore, in such a case, the tribunal must increase any compensation awarded by 10% and may ‘if it considers it just and equitable in all the circumstances to do so’ increase the award by up to 50%.

In Aptuit (Edinburgh) Ltd v Kennedy the employee had been notified that she was at risk of redundancy. She had asked for a meeting with her manager and a representative of the HR department at which a number of matters were discussed. The next day she was notified by letter that her redundancy would take effect in four months time. The letter made no mention of her having a right of appeal. At some point thereafter she did, in fact, have a further meeting with the HR department representative. The employment tribunal concluded that the dismissal was automatically unfair because the claimant had had no right of appeal and ‘the affording of a right of appeal was a part of the statutory dismissal procedure’. She was awarded compensation with a 40% uplift.

The EAT has now decided that the tribunal was wrong to rely solely on the fact that the employee had not received written intimation of her right to appeal. There is no legal requirement that the employer must notify the employee in writing of his/her right of appeal. Furthermore, while there may have been a failure to communicate that right, the tribunal should, before awarding compensation, have considered whether the dismissal would have taken place in any event and considered making a Polkey deduction from any award that it might otherwise have made. If an appeal had actually taken place, despite the employee not having been informed beforehand of her right to appeal, a 100% deduction might be appropriate.

Also a procedural unfairness that does not fall within the SDDP may be totally excused and render the dismissal fair if it can be shown that, on balance, the employee would have been dismissed in any event.

Points to note –

  • The EAT in Aptuit has clarified what the SDDP requires from the employer in relation to the employee’s right to appeal a decision to dismiss him/her. There is no need for the employer to ‘offer’ an appeal. ‘The employee must have the fact of the right to appeal communicated to him but it is then for the employee to inform the employer that he wants to appeal’. Of course it will be best practice for the employer to communicate with the employee in writing. Employers who wish to avoid arguments, or even claims, over this issue should check their procedures to ensure that they do so.

  • The EAT also stressed that the 10-50% uplift in compensation can only be awarded for failure to comply with the SDDP. In Aptuit, the tribunal had also taken into account the fact that there had been ‘no consultation whatsoever’. This may make a potentially fair redundancy unfair but does not relate to any failure to complete the SDDP and so should have no effect on the level of compensation awarded.