What is Unfair Dismissal?

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18 Jul 2018

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UK law describes unfair dismissal as firing an employee without a fair reason to do so. There are five reasons for a fair dismissal:

  1. Poor conduct.
  2. Lack of capability or qualifications.
  3. Redundancy.
  4. A statutory duty or restriction that forbids employment from continuing—such as when a courier suffers a driving ban.
  5. Some other substantial reason that explains the dismissal.

So with that in mind, the following are types of unfair dismissal:

  • A reason that the employment tribunal deems to be "automatically unfair".
  • Dismissing one of your staff without a fair dismissal procedure.

Right now, these reasons remain vague. So, we're here to give you concrete examples and help you make sure you never exercise unfair dismissal.

Unfair Dismissal Qualifying Period

Normally, there's no "qualifying period" for automatically unfair dismissal. If you fire someone on their first day and it's for a reason that's automatically unfair, they can make a claim. When the reason for the dismissal isn't automatically unfair, the employee needs to have worked for you for two years (minus one week) to make a claim. They must have the employment status of an employee, too—not a worker or self-employed.

Reasons that are Automatically Unfair

Dismissing an employee is automatically unfair if you violate one or more of your employee's statutory employment rights. To fire one of your staff for any of these reasons is automatically unfair dismissal:

  • Pregnancy or any matters of maternity.
  • Membership within a trade union.
  • Whistleblowing.
  • Paternity leave.
  • When one of your employees refuses to give up a right under the Working Time Regulations 1998. For example, if they won't give up a rest break.
  • One of your employees tries to exercise their right to receive the national minimum wage.

Discrimination is also automatically unfair. You must not treat anyone in an unfair manner because of one or more of their "protected characteristics".

  • Sex.
  • Sexual orientation.
  • Age.
  • Gender reassignment.
  • Disability.
  • Race.
  • Religion and belief.
  • Marriage and civil partnership.
  • Pregnancy and maternity.

Each person has a unique set of these characteristics. You must not fire any of your staff for anything on this list. Remember, there's no length of service to reach to prevent dismissal for any of these reasons.

You Must Follow a Fair Dismissal Procedure

Before you dismiss someone, you will usually have to go through the following steps:

  • An informal chat with a note for improvement.
  • A verbal warning.
  • First written warning.
  • Final written warning.
  • Dismissal.

You can only jump straight to dismissal in cases of gross misconduct. Make sure all staff have a copy of your procedures and policies. You should also cover your bases during disciplinary procedures by making written notes of all actions. Keep copies of all correspondence.

Unfair Dismissal During Probation Period

Sometimes an employer dismisses an employee while the employee is still on their probation period. If the reason for dismissal was not automatically unfair, then the employee needs two years' service to make a claim for unfair dismissal.

What Happens During an Appeal Hearing for Unfair Dismissal?

When you inform your employee about a disciplinary hearing outcome, you should write to them as best practice. It's best to keep evidence of all correspondences.

You should explain what the employee did wrong, and why you have decided to move ahead with your outcome. If you don't follow either your own disciplinary procedure or the Acas Code of Practice, you leave yourself exposed to an employee having a good case for an appeal. Always ensure that your staff are aware of your appeals process. An employee appeals because they're challenging your decision.

They might be challenging the precise action you took, for example, to dismiss them and the way in which you proceeded. Or they might be challenging the evidence you used to reach your conclusion. In order to remain impartial during the appeal process, you should involve another manager in the business—who was not involved in the initial disciplinary hearing—to preside over the appeal meeting. If this isn't an option, you could turn to your board of trustees.

If, instead, you decide to be the one who hears the appeal, despite first leading the disciplinary hearing, you must be fair. You can't punish an employee for appealing. You should inform the employee of the outcome of their appeal as soon as possible. Do so in writing. If following the appeal process the employee chooses to make a claim, they have three months minus one day to begin the process.

What Happens if You Lose an Employment Tribunal for Unfair Dismissal?

Unfair dismissal tribunal fees are gone. The Supreme Court abolished all tribunal fees in July 2017. Without financial costs for employees, there has been more than a 118% increase in tribunal claims. If an employee's unfair dismissal claim succeeds, you could pay compensation up to £83,682.

The law caps unfair dismissal compensation at your employee's yearly pay. If an employee earns over £83,682 per year, they will not receive more than this current cap in compensation. However, the compensation usually comes with a basic monetary award added on. So, it's in your best interests to not act in a way that will give one of your staff grounds for unfair dismissal.

Talk to an Expert

For more information about dismissals, get in touch with Croner's employment law experts on 0808 145 3381.

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