Unfair Dismissal

Unfair dismissal is a statutory right the employee has Employment Rights Act 1996 where they have been unfairly or unreasonably dismissed by their employer. However, there is a 1-year qualifying period before the employee can claim the right and that period has increased from 1 year to 2 years for employees who started their job on or after 6 April 2012.

Under section 98 of the Employment Rights Act 1996, it is fair for the employer to dismiss the employee for one of the following reasons:

  1. Capability or Qualifications of the employee which includes a lack of general ability and skills and training for the job and where the employee is on long-term sick leave.
  2. Conduct – where the employee’s behaviour at work is unacceptable. This can include a single act or a series of acts. Gross misconduct such as theft of the employer’s property or violence towards other employees and/or clients of the employer would normally justify dismissal for the first offence.
  3. Redundancy - employers must show that there has been an appropriate consultation & selection process, demonstrating as necessary that the published criteria for redundancy did form the basis of the selections.
  4. A Statutory Requirement – For example employing an employee without the required work permit or dismissal because the employee has lost their driving licence and they need to drive to do the job.
  5. Some Other Substantial Reason – There is no statutory guidance on this but common examples include business reorganisations and where the employee unreasonably refuses to accept changes to the terms and conditions or their employment.

However, even where the employer convinces a Tribunal that they dismissed the employee for one of the above reasons, the employer will still have to show that they followed a reasonable procedure in accordance with the ACAS Code of Practice 1 for disciplinary matters. The employer must also show that the decision to dismiss the employer fell within the range of reasonable responses open to an employer. For example, a single act of poor performance by the employee would not normally warrant a dismissal although a single act of gross misconduct may justify dismissal depending on the circumstances. 

Types of Unfair Dismissal

Certain types of dismissals are deemed to be “automatically unfair” in which case no qualifying period of service is required and the dismissal is not subject to the ‘reasonableness test’. Examples of automatically unfair dismissal include: membership of a trade union; health and safety; dismissal due to the employee having a protected characteristic; seeking to enforce rights under the National Minimum Wage Act 1998; and making a protected disclosure under the Public Interest Disclosure Act 1998.

Claim for Unfair Dismissal

A claim for unfair dismissal or automatically unfair dismissal must be brought to the Employment Tribunal within 3 months of the dismissal. If the claim is successful, the Employment Tribunal can order that the employee should be reinstated by the employer or engaged on another job with the employer although this rarely happens. Otherwise, if successful, the employee will receive a basic award, calculated on the basis of the employee’s age, salary and length of service. The current amount is £430 per week for each completed year (½ a week’s pay for employees aged 21 and under and 1½ weeks’ pay for employees aged 41 and over) up to a maximum of 20 years which amounts to £12,900. In addition, the employee will receive a compensatory award which is intended to compensate the employee for their financial losses as a result of the dismissal. The Employment Tribunal will consider the employee’s loss of earnings from the date of dismissal to the date of the hearing, future loss of earnings if relevant and loss of benefits such as private healthcare and company car. However, if the employee has started a new job which is either better paid or as well paid as their old job then the employee will not receive compensation from the start date of their new job but if their now job is less well paid then the employee will receive the difference in salary between the two jobs. The compensatory award is capped at £72,000. However, there is no cap on compensation for cases involving dismissals due to health and safety, protected disclosures and discriminatory dismissals. Employment Tribunals can adjust awards up or down by 25 per cent if they consider that either the employer or employee has unreasonably failed to follow the ACAS Code of Practice 1.