Employment Law

Certain categories of employee have the right not to be dismissed unfairly. Certain qualifications are necessary:-

1. The employee must show that he is an employee – see separate note.
2. The employee must have at least two years' continuous employment unless the dismissal is for a reason considered to be “automatically unfair”.
3. The employee must not fall into one of the limited number of excluded classes – for example share fishermen.
4. The employee must have been dismissed. This may take a number of forms:-

(a) The contract is terminated by the employer.

(b) The employer fails to renew a fixed term contract.

(c) The employee leaves because of a major breach of contract by the employer – known as constructive dismissal. 

The grounds for dismissal which are automatically unfair include reasons to do with Union membership, discrimination, pregnancy, health and safety and TUPE.

Grounds for dismissal

The following grounds for dismissal are potentially fair:-

Misconduct: What amounts to misconduct will depend upon the circumstances but might, for example, include poor attendance, theft, violence at work, insubordination and so on.

Redundancy: See separate page for further information.

Capability: This is inability to do the job, for example incompetence or ill health. In the case of illness great care is now required because of the potential impact of the Equality Act provisions.

Illegality: The inability of an employee to do the job without breaking the law – a good example perhaps being the loss of a driving licence to a professional driver.

Some other substantial reason: This might include for example a fundamental re-organisation of a business causing changes in deployment of staff and individual contracts of employment - not to be confused with redundancy.

Retirement: Dismissal on the grounds of retirement will in some circumstances be fair.

An employer seeking to retire an employee on the grounds of retirement has a duty to notify the employee of the right to work beyond retirement – not more than 12 or less than 6 months before the intended retirement date. The employee has a right to request to work beyond this date and the employer has a duty to consider this request (including the duty to meet with the employee and discuss the matter and to provide a right of appeal).

Reasonableness: In order for an employer to show that he has acted reasonably to dismiss for a potentially fair reason the decision to dismiss must also fall within a range of decisions that a reasonable employer could make. However the tribunal does not simply substitute their own view of fairness for that of the employer.

In order to demonstrate reasonableness an employer should:-

(a) Raise any issues (for example a misconduct) with the employee promptly as they arise.

(b) Provide the employee with a fair hearing (time to prepare, advocate and an opportunity to state his case).

(c) Act proportionately giving employees an opportunity to improve and assistance with this where appropriate. Provide a penalty commensurate to the wrong – for example giving warnings.

(d) Provide a right to an appeal.There is now a statutory obligation to follow disciplinary and grievance procedures. It is vital that any procedures which the employer has in a Staff Handbook or contract of employment are fully adhered to. Failure to comply with statutory disciplinary procedures may render an otherwise potentially fair dismissal unfair.

Written reasons for dismissal: An employee who has been employed for more than two years is entitled to be notified in writing of the reasons for their dismissal:-

1. The employer must respond within 14 days in writing to any request.
2. The employer must provide a simple summary of the reason for dismissal.

Time limits: An application for unfair dismissal must be filed within three months of termination of employment. This is critical – the limit is rarely extended. Great care is needed.

Compensation: In the event that a tribunal finds a dismissal unfair it has discretion as to remedies. The tribunal can order re-instatement but rarely does. The most frequent remedy is compensation divided into:-

1. Basic award – calculated in the same way as statutory redundancy subject to a maximum of £16,140.
2. Compensatory award – the amount which a tribunal considers just to compensate the employee for losses such as earnings (net pay), to include benefits, pension contributions and the like and expenses arising from dismissal. The maximum possible compensatory award is £88,519 (or 12 months' gross pay if less). It can be reduced by up to 100% due to contributory fault on the part of the employee. The employee has a duty to mitigate their loss, so must seek alternative employment as soon as possible.
3. Certain claims that can be made to a tribunal such as discrimination, health & safety or “whistle blowing” are not subject to the limits mentioned above.

Claims to a tribunal:  No claim can be made to an employment tribunal without an ACAS certificate to show that early conciliation has been attempted. For costs, please see our Employment Fees Overview.

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