Hiring and firing staff is a given for any successful enterprise for all business owners. However, when making the difficult decision to dismiss an employee - you have a duty to act with respect and legally.
Failure to do so can lead to an unfair dismissal claim being made against you, which could lead to an employment tribunal with financial damages to pay.
In this guide, we'll discuss what unfair dismissal is, what employers must avoid doing and the potential remedies following an unfair dismissal.
What is unfair dismissal?
Unfair dismissal is when an employee feels they were dismissed from their role without a fair reason or without the fair process being followed.
Under the Employment Rights Act 1996, a dismissal must fall into one of the following five categories in order to be fair:
- The employee lacked the qualifications or capability to carry out the role.
- The dismissal was down to the employee's conduct. Such as poor attendance, dishonesty, or theft.
- The employer had to make a redundancy, but they must be genuine and fair.
- The employee cannot do their job legally. For example, a HGV driver being banned from driving.
- There's some other substantial reason (also known as SOSR). For example, a personality clash or a non-renewal of a fixed-term contract after maternity leave or adoption leave
In order to avoid unfairly dismissing an employee, you must ensure you follow a fair procedure.
However, it is crucial you understand that there are times when a dismissal might be classed as automatically unfair.
What is automatic unfair dismissal?
This type of dismissal is when an employee is dismissed for an automatically unfair reason. As an employer, you must avoid dismissing someone for automatically unfair reasons, such as staff exercising an employee's statutory employment rights.
It's against employment law to treat an employee unfairly via the following:
- Dismissing an employee for using their right to request flexible working
- Dismissing an employee for taking time off for dependents.
- Dismissing an employee for taking rest breaks.
- Dismissing an employee for taking time off for jury service.
- Dismissing an employee for taking time off to study.
- Dismissing an employee for whilst blowing or for making a public interest disclosure.
- Dismissing an employee after discriminating against them, for example, due to their political opinion, or being in a civil partnership.
- Dismissing an employee after asking to be paid the national minimum wage.
It's vital you ensure all staff are fairly dismissed, but below are common examples of when employees are often dismissed unfairly.
Common examples of unfair dismissal
You have a duty to treat your staff fairly and with respect before, during and after their employment - and this includes when you choose to end their employment. Failure to do so can lead to an employee being dismissed unfairly and a stain on your company's reputation.
Make yourself aware of actions which need to be avoided when dismissing an employee.
Dismissal on health & safety grounds
You should never dismiss an employee because they're made a complaint over a health & safety issue.
Employees have a right to work in a safe environment. The following should never lead to an employee being unfairly dismissed:
- Raising a health & safety issue or concern to their employer.
- Refusing to work in an unsafe environment which could lead to danger.
- Simply carrying out their job as a workplace health & safety representative, for example advising colleagues on an unsafe piece of equipment.
Dismissal on health & safety grounds can class as an automatically unfair reason if it's the main reason why an employee is being dismissed.
Unfair redundancy selection
When making staff redundancies, you must act fairly and follow the correct process when choosing which staff to dismiss.
Ensure you take into consideration attendance, performance and standard of work when selecting who to make redundant. Any absences related to disability, pregnancy or maternity must not be included.
Unfairly dismissed due to industrial action
It's against employment law to dismiss staff who have taken part in official legal industrial action. You must not dismiss employees during the following:
- The 12-week period following the start industrial action taking place.
- If the action takes longer than 12 weeks, if the employer has tried to solve the dispute.
Employees should not be dismissed for joining or becoming a trade union member, trade union representative or participating in trade union activities.
Dismissal due to business transfers
Under TUPE regulations, a dismissal will be unfair if an employee is dismissed either before after a TUPE transfer if the main reason for their dismissal is the transfer.
Dismissal relating to employee pregnancy or maternity
There are unfair dismissal provisions to protect pregnant employees. You cannot dismiss a pregnant employee for the following:
- For any reason at all connected to their pregnancy.
- For keeping in communication with other employees whilst on maternity leave.
You must provide employees with a minimum notice period, maternity, paternity or adoption leave if required.
Dismissal due to activities as an occupational pension scheme trustee
Dismissal for performing a function as an occupational pensions trustee is automatically unfair.
An employee cannot be unfairly dismissed for carrying out their duties surrounding the scheme.
Dismissal due to being an employee representative
Dismissal for performing functions as an employee representative on a TUPE transfer is automatically unfair.
Employee's also have protection from dismissal for carrying out their duties in regard to:
- Being a member of a special negotiating body.
- Being an information and consultation representative.
- Being a European Works Council representative.
Is constructive dismissal unfair dismissal?
Constructive dismissal is when an employee is forced to resign due to employer's conduct.
Examples of constructive dismissal are:
- Reducing an employee's wages.
- Significantly reducing an employee's working hours.
- Treating an employee differently for no reason.
In some cases, constructive dismissal can be seen as unfair dismissal - with employees well within their rights to claim this in front of a tribunal.
You must work to avoid acting in a way that could be seen as constructive dismissal when looking to end someone's employment.
Dismissal rights for your employees
You have a duty to your employees to treat them fairly when you choose to end their employment. Being dismissed is undoubtedly a stressful time and you should never make it a more difficult period for them.
Remember, that how you treat your employees can lead to a negative effect on your company.
If an employee should have been dismissed fairly and you failed, a claim could be made against you. It's important you know when an employee can't raise a claim to have been dismissed for an unfair reason.
What's the process for claiming unfair dismissal?
If employees think they've been unfairly sacked, they need at least two years’ continuous service to make a claim.
If an employee has been dismissed for an automatically unfair reason, they can make a claim no matter how long they’re being employed.
However, for discrimination cases, there's no qualifying period in place.
Who can't make a claim for unfair dismissal?
Not everyone can claim they have been unfairly dismissed. The following groups aren't entitled to make a claim against their employer:
- A worker rather than an employee.
- A member of the police service or armed forces – subject to certain exceptions.
- A temp working under a contract for services if they aren’t an employee in reality.
- A share fisherman.
As an employer, you need to understand the severity of these claims.
Can an unfair dismissal claim lead to an employment tribunal?
Employees who feel they've been unfairly dismissed and have made an unsuccessful appeal - may take advice from an employment solicitor.
This could lead to an employment tribunal. Employment tribunals work to find the best solution for both parties and will hear both sides fairly.
The employment tribunal may award the claimant a basic and compensatory award. They may award you to pay a compensatory award. Such payments can include lost wages, or any bonuses not paid.
Can an employee claim unfair dismissal and wrongful dismissal at the same time?
An employee is well within their rights to claim both unfair and wrongful dismissal at the same time. The unfair dismissal award may cover the wrongful dismissal award so the claimant would not usually get a double recovery in that situation.
How to avoid unfair dismissal claims against you
As an employer, there's many things you can do to avoid a claim being made against you and a potential employment tribunal case.
To put it simply, treat your employees with respect throughout their employment and when it comes to terminating their employment.
Communicate with your employees and if you have to make redundancies - ensure you follow the correct process.
Get expert advice from Peninsula on unfair dismissal
Employers have a duty to treat their employees properly, and this includes when you have to make dismissals.
Failure to act properly is against the law and can lead to claims being made against you, with potentially heavy financial damages to pay.
Make sure you fully understand the rules and regulations surrounding all types of dismissal, and how much money you may need to pay in damages if you get it wrong.
Peninsula offers you expert 24-hour advice to answer any questions on unfair dismissal you may have. Our individual solicitors are regulated by the Solicitors Regulation Authority. Contact us on 0800 051 3687