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Unfair Dismissals

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Unfair Dismissals

Many businesses will at some stage face the difficult task of having to dismiss an employee or a group of employees. Dismissals occur where: 

  • the employer terminates the contract;
  • a limited-term contract ends and isn't renewed;
  • the employee resigns in circumstances where they're entitled to do so because of the employer's actions

A dismissal is fair or unfair depending on the reason for dismissal and whether the employer acts reasonably during the dismissal process.

Constructive dismissal

Constructive dismissal occurs where an employee resigns because the employer has substantially breached their employment contract. Examples could include: 

  • cutting a worker's wages without agreement;
  • unlawfully demoting them;
  • allowing colleagues to subject them to harassment, bullying, victimisation, humiliation or discrimination;
  • unfairly increasing their workload;
  • changing the location of their workplace at short notice; 
  • making them work in dangerous conditions.

The breach of contract can result from either a single serious event or the last in a series of less serious events.

Wrongful dismissal

Wrongful dismissal is where a contractual term is broken in the dismissal process, e.g. dismissal without giving proper notice.

Eligibility to complain to a tribunal

Employees can usually claim unfair dismissal only if they have worked for the employer at least one year or 2 years if the employment started on/after the 6/4/12. However, a number of dismissals require no minimum period of employment and are also automatically unfair i.e. the tribunal will find that they are unfair even if the employer followed a correct dismissal procedure.

Automatically unfair reasons for dismissals

The tribunal will hold the dismissal of an employee to be unfair if they are dismissed or selected for redundancy due to: 

  • Pregnancy and childbirth
  • Parental leave
  • Health & safety reasons
  • Whistle blowing
  • Victimisation
  • Acting as a representative
  • Seeking flexible working
  • Jury service
  • Taking part in protected industrial action

Penalties for Unfair dismissals

If an employment tribunal finds that an employee has been unfairly dismissed, it may order the employer to reinstate or re-engage them. More commonly, a tribunal will award compensation, made up of a basic award which depends on the employee's age, gross weekly pay and length of service, and a compensatory award.

Reasons for fair dismissals

The Employment Rights Act sets out 6 potentially fair reasons that an employer may lawfully use to dismiss an employee. These are: 

  • Capability, includes poor performance and ill health
  • Conduct
  • Retirement
  • Illegality
  • Redundancy
  • Some other substantial reason (SOSR) 

Dismissals on capability grounds

Sometimes an employee is incapable of doing their job to the required standard. This may be because: 

  • they don't have the right skills or aptitude for the job;
  • they are ill and therefore unable to attend work regularly and/or do their job properly while at work.

In most cases, an employer can help an employee improve by taking informal action, e.g. by offering training/mentoring or another suitable job. If, after taking informal action, they don't improve and their poor performance continues to affect the business, an employer might then consider formal disciplinary action.

Dismissals on conduct grounds

An employer can consider dismissing an employee on conduct grounds if they: 

  • can do their job but are unwilling or reluctant to do it properly;
  • commit some form of misconduct, i.e. they do something that breaches disciplinary rules.
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