What Employers need to know about Unfair Dismissal

Employers need to have a sound working knowledge of the basic tenets of Employment Law. This is nowhere more amply demonstrated than in the area of Unfair Dismissal.

If employers don’t know the difference between what makes a fair dismissal and what doesn't, then that is likely lead to them facing a claim for unfair dismissal on more than one occasion. They are also likely to find themselves on the end of some very costly employment tribunal decisions, paying out hefty sums for both basic awards and compensatory awards.

Having an experienced business employment law solicitor just a phone call away to provide legal advice in this area of law, is not only a source of reassurance, but is also a necessity.

As this article will show, it is often possible to rectify procedural errors that are made during the course of termination of a contract for one of the fair reasons listed below. It is better, however, to have the knowledge not to make the error in the first place. It is hoped that employers reading this article will gain an insight into the correct way to carry out a dismissal.

Are there any fair reasons for dismissing an employee and if so, what are they?

A dismissal of an employee will be for a fair reason if it is for one of the following 5 reasons:

1. Conduct.
2. Lack of Capability (i.e. poor performance or becoming incapable of doing the job due to ill health)
3. For reasons of redundancy
4. If it becomes illegal to continue to employ a person (e.g. if the employee loses their right to work in the UK, or someone employed as a driver is banned from driving and loses their licence)
5. Some other substantial reason (SOSR) – this reason is often used where there has been a clash in personality between employees, of the kind that can’t be repaired. Another reason is if the company relocates to another geographical area and the employee is unable to move.

Even if the reason for dismissal is a fair one, it is important that the employer follows the correct procedure laid down in the employment contract, the company handbook, company policies or procedures or failing that using the ACAS Code of Practice on disciplinary and grievance procedures. Failure to follow the correct procedure could still make dismissal unlawful.

If a dismissal isn’t for one of the reasons above, then it follows that the employee’s dismissal will have been unfair.

What is automatic unfair dismissal?

Unfair dismissal claims can usually only be brought by employees who have had at least two years of continuous employment with the employer.

The reason for using the word ‘usually’ in the last sentence, is because if an employer dismisses one of their employees for exercising or trying to exercise, one of their statutory employment rights, then this will constitute an automatic unfair dismissal.

No period of continuous employment needs to have been worked for an unfair dismissal claim to be brought in any of the circumstances where an act of automatic unfair dismissal has occurred.

The Employment Rights Act 1996 is the guiding piece of legislation when it comes to automatically unfair dismissal.

There are about 60 automatically unfair reasons for dismissal. Here are a few examples where if an employee is dismissed for any of the reasons outlined, it will constitute automatically unlawful dismissal:

• Person being discriminated against because of gender, race, disability, religion or belief, sex, sexual orientation or age
• Membership of a trade union or for trade union activities
• Taking time off for jury service
• Taking time off to look for work before redundancy happens
• Exposing wrongdoing in the workplace under whistleblowing legislation
• Refusing to give up a statutory right under The Working time Regulations 1999
• Taking time off, or seeking to take time off for family reasons including pregnancy, maternity leave, adoption leave, childbirth, parental leave or paternity leave
• Refusing to work on Sundays by shop and betting company employees.
• Seeking to exercise the right to have flexible working
• Because they are a part-time worker
• Taking steps under the National Minimum Wages Act 1998

Employers need to beware.

So, either a dismissal is an automatic unfair dismissal or it’s a fair dismissal?

No. It’s still possible for an employer to dismiss an employee on the grounds of one of the five fair reasons for a dismissal, only for an Employment Tribunal to decide that the employer has acted unreasonably in treating that reason as sufficient for the dismissal.

A Tribunal must decide whether the employer was reasonable in dismissing an employee for the reason of conduct, capability, redundancy, illegality or SOSR, in accordance with equity and the substantial merits of the case.

The test is an objective one, with each case turning on its own facts. An employment tribunal must decide whether:

1. the dismissal was fair or unfair, having regard to the reason shown by the employer and,
2. whether in the circumstances the employer acted reasonably or unreasonably in treating that reason as a sufficient reason for dismissing the employee, and
3. that question shall be determined in accordance with equity and the substantial merits of the case.

It is not for the tribunal to ask itself the question:

“If the employee did what is alleged, what would it, the tribunal have done?”

The tribunal’s job is to decide whether the employer’s response to an incident that potentially constitutes a fair reason for dismissal, is of itself the kind of response that falls within the range of responses that a reasonable employer would make.

Article Summary

1. It is possible to dismiss an employee fairly even after they have been employed for over two years, if the reason for dismissal falls under one of the 5 fair reasons for dismissal.
2. If the reason is fair, the employer’s response must be a reasonable response and one that would fall within the range of responses that a reasonable employer would take.
3. Many successful unfair dismissal claims are held to be unfair, not because the reason for dismissal was unfair nor because the response of the employer was unfair, but because there were procedural irregularities made by the employer during the disciplinary and/or dismissal process.
4. In cases of automatically unfair dismissal, any employee can make a claim to a tribunal regardless of how long they have worked for that employer. There are around 60 grounds for claiming automatically unfair dismissal.

If after reading this article you would like to discuss any aspects of Unfair Dismissal or any other area of Business Employment Law, our employment law team at Spencers solicitors would be delighted to hear from you. You can call us on 0808 274 5269 or leave your contact details and we’ll get straight back to you.