Your staff won’t stay with you forever. And as an employer, you may have to bring someone’s employment to an end.
This isn’t a decision to be taken lightly. Employees have rights and employers have obligations.
Before deciding on dismissal, you’ll must show sufficient reasons and a fair process. Without them, you could find yourself facing more business penalties than you think.
Read about the fair grounds for dismissing an employee from your business. As well as the procedure for actioning a dismissal, and how to avoid any breaches that could constitute wrongful or unfair dismissal.
Read the full guide or click the link below to go straight to that section.
- What is a dismissal?
- Dismissal procedure.
- Employee dismissal rights.
- Dismissing an employee with less than two years' service.
- Different types of dismissal.
- Alternatives to dismissing an employee.
What is a dismissal?
A dismissal occurs when you decide to end an employee’s contract. Dismissals aren’t something that employers should refer to lightly, but rather as a last resort.
Employers must follow a fair and consistent procedure when letting people go.
Failing this, you could face unfair dismissal claims, as well as claims of constructive unfair dismissal – where an employee feels they have no other choice but to quit and bring a claim to a tribunal.
This can lead to possible re-employment, workplace disruption, and compensation fees.
You must follow an established disciplinary procedure when letting someone go.
A fair dismissal process must include the following steps:
- Conduct an investigation into the matter.
- Inform the employee of any issues following investigation.
- Invite the employee to a disciplinary hearing.
- Hold the hearing and issue outcome.
- Allow right to appeal.
Dismissal policies and procedures should be available to all staff members and be included in your employee handbook and employment contracts.
In situations of gross misconduct (like theft or assault) you should start with more serious penalties, like demotion or dismissal.
Employers can dismiss staff in misconduct cases, even if the reason does not amount to gross misconduct. However, they are still obliged to give notice and follow a fair procedure.
For cases of gross misconduct, no notice needs to be given – but a fair procedure must still be followed.
Without following the correct procedure, a tribunal could find you guilty of unfair dismissal. Here, the dismissed employee could be awarded re-employment or even unfair dismissal compensation.
Employee dismissal rights
You don’t have to give an employee notice if you decide to dismiss them where gross misconduct is concerned. However, with all dismissals you must:
- Show a fair reason for your decision.
- Act reasonably in the circumstances.
You must fully investigate the situation before actioning any form of disciplinary or dismissal. The aim is to be fair and follow the right legal steps for these employment issues.
Be consistent with following the process, including with workers who are part-time or on fixed-term contracts – they cannot be treated less favourably than a full-time or permanent employee.
Right to written statement of reasons for dismissal
You’re not always required to provide a written statement of reasons for dismissal, but if an employee with at least two years’ continuous service requests one, you must provide it.
A detailed letter of dismissal can provide evidence to support your dismissal. It identifies your legal compliance, and fair reasons. This will reduce the chance of discrimination claims as well.
Employees who’re dismissed while pregnant, on maternity leave or adoption leave must be given a letter of dismissal. You must provide a written statement to these workers.
Right to appeal
Employees have a right to appeal against dismissal and all disciplinary decisions they consider were unfair or wrongful.
At the dismissal hearing, you must provide employees with information on:
- Their legal rights.
- The time period for appealing (five working days from the original decision).
- How to submit an appeal (in writing and outline their reasons).
A dismissal can be overturned at appeal. If this happens, the dismissal effectively disappears. The employee is treated as if they have continued regular employment over, and they’re entitled to back pay from the date you initially dismissed them.
Dismissing an employee with less than two years’ service
Employee’s gain statutory protection against unfair dismissal after two years’ of continuous service with the same employer.
This means that you don’t have to follow the same dismissal procedure when dismissing an employee with less than two years’ service.
During the two-year qualifying period, you can lawfully terminate someone’s contract of employment without the need to demonstrate a fair reason or defend your decision in court.
Although the two-year rule protects you from unfair dismissal claims, dismissed workers could still claim wrongful dismissal. Wrongful dismissal of staff members with under two years’ service are often due to being dismissed without notice.
Statutory notice period
Almost all employees are entitled to the statutory notice period. The period of notice depends on the length of continuous service worked by the employee.
- Between one month and two years: A minimum of one weeks’ notice.
- Two years or more: A minimum of two weeks’ notice, and an additional week for each year completed.
Employees who have worked for you for less than a month aren’t required to work a notice period unless specified by their contract.
Different types of dismissal
There are many types of dismissal and some of them are considered unlawful. This could cause huge financial costs and impact your business’ reputation. The different types of dismissal are:
- Fair dismissal.
- Unfair dismissal.
- Wrongful dismissal.
- Constructive dismissal.
- Summary dismissal (such as dismissal without notice).
It’s important for employers to understand the difference and what leads to each one.
The Employment Right Act 1996 outlines five fair reasons for dismissal:
- Conduct: when they’ve done something that breaches your code of conduct.
- Capability: when they can’t do the job, this can relate to qualifications or poor health.
- Redundancy: when the job is no longer viable.
- Legal reasons: when they can’t do their job legally, such as after receiving a driving ban.
- Some other substantial reasons (SOSR): used for many other significant reasons.
Other substantial reasons could include:
- Refusal to agree new terms of their employment contract.
- A client or another member of staff refusing to work with the employee.
As well as having a valid reason, you must follow the proper dismissal procedure for your dismissal to be fair.
By far the majority of cases are lost at Tribunal because of failure to follow a fair procedure when dismissing an employee. A proper procedure is everything.
Unfair dismissal occurs when an employee’s contract is ended without a legal reason.
Workers can bring forward unfair dismissal claims if they believe:
- The reason the employer gave for the dismissal was not the real one.
- The reason was unfair.
- The employer did not follow a proper procedure.
- The employer acted unreasonably (for example, by failing to give them plenty of warning about their dismissal).
Automatically unfair dismissal is classed as a different type of unfair dismissal. Even if employers acted reasonably, some reasons for dismissal are classed automatically unfair regardless, like:
- Being pregnant or reasons related to maternity.
- Requiring family leave (like parental, paternal, or adoption leave).
- Being part of a trade union or employee representative.
- Asking for legal rights (like to be paid minimum wage).
- Being involved in whistleblowing.
A wrongful dismissal happens when the dismissal breaches the worker’s contract. It generally relates to a complaint made about not being paid correctly at the end of contract termination.
Constructive dismissal happens when an employee resigns because their employer’s behaviour leaves them with no alternative. Or because of a serious breach in their contract made by their employer. Constructive dismissal in UK law are:
- Demotion or reduced pay for no reason.
- Forcing the employee to accept unreasonable changes to their employment contract.
- Failing to take appropriate action for bullying or harassment from colleagues.
- Not having appropriate safety procedures or risk assessments in place.
Constructive dismissal examples can be from a single or multiple incidents, which add up to a serious breach of contract.
When you decide to dismiss an employee, you normally have to grant them a notice period.
Alternatives to dismissing an employee
There’s no specific requirement for employers when making other types of dismissal – unless making redundancies.
However, if the employee makes an unfair dismissal claim, a tribunal could review whether you made a reasonable effort to avoid having to dismiss.
Before resorting to dismissal, consider the following options:
- Try to resolve the issue informally.
- Use formal disciplinary procedures.
- Put them on probation and set short-term goals.
- Reduce bonuses, salary and promotion opportunities.
- Offer alternative employment.
These options won’t always work but dismissing an employee should always be the last resort.
Get expert advice on dismissals with Peninsula
There are many different types of dismissal and a lot to keep in mind to make sure your dismissals are fair.
Sometimes dismissal due to capability, performance, or conduct can be major deciding factors for your business. And failing to follow the rules can lead to employment tribunals and costly legal fees.
Peninsula offers specialist advice on the entire process of dismissal. We provide 24/7 HR advice to help with legal compliance and building policies for dismissal.
Our team of HR experts can show how to provide dismissed employees with the most practical departure, ensuring they know about their entitlements and legal appeal rights.
Peninsula clients also get access to 24/7 HR consultation with our experts, at any time or day. And if you’re not yet a client, you can still enjoy free advice from our experts. Simply call us on 0800 028 2420.