When is a Dismissal fair?

What is a dismissal?

A dismissal takes place when an employer terminates an employee’s contract or fails to renew a fixed-term contract when it comes to an end. Employees should be given notice in writing when they are dismissed, ideally with reasons for the dismissal (especially if they have over two years service). Notice given to dismiss must be the greater of the contractual notice or the statutory minimum of one week per year of service up to a maximum of 12 weeks. Notice can be paid in lieu if the contract allows for it.

Constructive dismissal

Constructive dismissal is where an employee resigns due to a breach of contract by his or her employer and feels they have no option other than to resign. 

Wrongful dismissal

Wrongful dismissal is where an employer is in breach of contract e.g. by dismissing an employee with inadequate notice. 

Short-service dismissal

As long as there are no risks of discrimination, you can dismiss staff with less than two years service fairly by giving them contractual notice.

Unfair dismissal

Staff with two years service or more can make a claim for unfair dismissal in an Employment Tribunal. In order to avoid a claim for unfair dismissal an employer must have:

1. a fair reason to dismiss 

2. acted reasonably

3. followed a fair procedure prior to dismissal

Fair reasons to dismiss

There are five fair reasons to dismiss an employee:

1. Capability: e.g. an employee lacks the qualifications to do the role; cannot meet the required standard of performance; or is incapable due to illness

2. Conduct: e.g. an employee exhibits misconduct in a range of areas from theft through to in appropriate behaviour in relation to other people

3. Redundancy: i.e. an employee’s role is eliminated or moves to a new location

4. Statutory illegality: e.g. an employee can no longer carry out their role eg without a driving licence

5. Some other substantial reason e.g. termination and re-engagement on new terms; or dismissal due to imprisonment

Following a fair procedure

As well as having a fair reason to dismiss, employers must be able to demonstrate they have followed a fair procedure prior to dismissal:

– Have they followed the ACAS code of practice?

– Has an investigation been carried out?

– Was a series of warnings given?

– Was there a consultation with the employee?

Can I give notice and issue new contractual terms?

This practice known as ‘fire and rehire’ should only be used as a last resort, following a fair consultation with staff where changes are critical and voluntary agreement isn’t possible.

Case law

There were 630 successful unfair dismissal cases last year, up 51% from the previous year. The average compensation payout was £14,000, with the highest being £165,000.

If you are considering dismissing an employee, especially if they have over two years service, please get in touch to discuss the details of the case and the procedure you plan to follow. Feel free to email the contract and background to the case via help@yourhrpartner.co.uk.

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This post was written by SKHR