What is unfair dismissal?

by Nadine De Souza

Unfortunately, there are times when you have to dismiss an employee. You must be careful to follow the correct procedures otherwise your employee could claim that they have been unfairly dismissed.

What is unfair dismissal?

Unfair dismissal happens when an employee is dismissed without good reason, or without the employer following a fair procedure.

The right not to be unfairly dismissed is a statutory right. An employer cannot ask an employee in their employment contract to contract out of the right not to be unfairly dismissed.

Who can make a claim for unfair dismissal?

To begin a claim for unfair dismissal, an employee has to be employed for a continuous period of one year for employees employed before 6 April 2012; and two years for employees employed on or after 6 April 2012.

The employment remains continuous even if there has been a transfer of business ownership or the employee has been absent because of sickness, injury, pregnancy or maternity leave.

There is no minimum service requirement for dismissals that are ‘automatically unfair’.

When can a claim be made?

An employee has three months from the date of termination to bring a claim for unfair dismissal.

What proof does the employer need to justify the dismissal?

If an employee can prove that they have all the qualifying conditions to bring a claim for unfair dismissal, the employer then has to establish the reason, or the main reason (if there was more than one), for the dismissal and prove that it's either:

  1. Connected to the capability or qualifications of the employee for performing work of the kind which they were employed to do; capability is assessed by looking at the skills, aptitude, health or any other physical or mental quality; or
  2. Connected to the conduct of the employee; or
  3. Redundancy; or
  4. The employee couldn’t continue to work in their job without violating (either on their part or on that of their employer) a duty or restriction imposed by or under law; or
  5. Connected with some other substantial reason that justifies the dismissal of an employee; or
  6. Retirement.

If the employer can satisfy the tribunal that the main reason for the dismissal is one of the above, then the tribunal will consider whether the dismissal was fair or unfair.

How does the employment tribunal judge the case?

Where the main reason falls within the first five reasons listed above, the tribunal will look at the reason given by the employer, and all the circumstances surrounding the dismissal including the size and administrative resources of the employer, in order to decide the reasonableness of the dismissal.

If the employment tribunal isn't satisfied that the dismissal was for an acceptable reason, the dismissal will be unfair.

The decisive factor is whether the employer followed a fair procedure leading up to the dismissal. That’s why using standard, fair procedures is crucial for employers to avoid liability for unfair dismissal. 

You can download our Staff Handbook which contains all the procedures that your business needs to follow to make sure that you don’t fall foul of employment law.

What dismissals are automatically unfair?

Some dismissals are automatically unfair. These are:

  • Membership or non-membership of an independent trade union or taking part in activities of an independent trade union
  • A maternity-related reason
  • An adoption-related reason
  • A health and safety reason
  • Asserting statutory rights
  • The performance of an employee representative (or candidate to be an employee representative)
  • The performance of an employee who is a pension scheme trustee
  • The transfer of an undertaking, i.e. where the ownership of the employer is transferred from one person/entity to another
  • A spent conviction or failure to disclose a spent conviction
  • Unfair selection for redundancy, i.e. selection will be unfair if it's for any of the above reasons
  • Taking parental leave or taking time off for dependants, and performing functions as an employee representative (or as a candidate to be an employee representative) for the purposes of establishing a workforce agreement in relation to parental leave
  • Making a protected disclosure (i.e. whistleblowing)
  • A national minimum wage reason
  • Enforcing a right to working family tax credit
  • Taking part in protected industrial action.

What judgments can the employment tribunal make?

If a tribunal finds that the employee has been unfairly dismissed, it can make an order for the employee to return to their original job or for the employee to be put in a job which is comparable to the one they were dismissed from.

The most common remedy is compensation. This is made up of a basic award and a compensatory award. The maximum basic award is £13,920 and the maximum compensatory award is £76,574.

You can see that it’s worth getting your procedures right in the first place to avoid paying out these hefty sums.

Help from Lawpack

This article has been adapted from Lawpack’s Employment Law Made Easy. If you want more in-depth information – from an employment lawyer – about all aspects of employment law, then read our guide Employment Law Made Easy. Packed with tips and expert advice on complying with employment legislation.

Other information

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Published on: May 28, 2014

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