Unfair Dismissal
Have you been unfairly dismissed by your employer?
Employment Law – Unfair Dismissal
What is Unfair Dismissal?
Unfair dismissal in the UK is when your employer terminates your contract without having a legally fair reason to. It can also be used when your employer terminates your contract of employment with fair reason, but handles your dismissal incorrectly. In either circumstance, there are laws that protect you.
To qualify to bring an unfair dismissal claim in the Employment Tribunal a person must meet a number of criteria:
- They must be an employee (rather than self-employed or, in most cases, working through an agency)
- They must normally have at least two years continuous employment (subject to certain exceptions)
- They must be in employment that has a sufficient connection to Great Britain
- They are within the 3 month time primary limit for bringing a claim to the Employment Tribunal
Dismissal reasons
Employment tribunals follow certain guidelines that contain reasons why a person can be fired or dismissed. These are Capability, Conduct, Redundancy, Breaking the Law and “any other reason”. Each of these factors also include specific detail, with ‘any other reason’ being interpreted on a per-case basis.
Capability – refers to the competence of an employee, and may include their health or qualifications, particularly if they initially lied in interviews.
Conduct – this includes the employee’s actions at work, such as misdemeanours, abusive or racist behaviour, unauthorised absence, poor punctuality and theft from the company
Redundancy – employers are required to have a clear redundancy policy and follow this policy. An employer cannot be seen to target a single individual for redundancy or make redundancies at random.
Breaking The Law – refers to breaches of Civil or Criminal Law committed outside of work hours, as employees can be dismissed due to gross misconduct or damaging the name of the firm.
Any other reason – this is the “catch-all” situation, which includes the specific and different ways you may be dismissed outside of the other reasons above. For example, an important client of the company may want you to be dismissed, or an employee may refuse to work with a certain colleague or with certain equipment. This reason is deliberately vague in scope, offering some protection to the employer against employees purposefully seeking dismissal in order to make a claim.
Another common reason, not listed above, is constructive dismissal. This refers to the situation when an employer gives you no other choice but to resign, typically because of abusive or intimidating behaviour. A successful Constructive Dismissal claim requires a lot of evidence to prove.
Dismissal Procedures
Most employers will “play by the book” when it comes to dismissals in order to avoid employment tribunal claims. This requires them to follow a formal and reasonable dismissal procedure as outlined in your contract of employment or employee handbook. Most dismissal procedures will include verbal and written warnings, documented attempts as resolving the situation, an opportunity for the employee to defend themselves and a final warning prior to dismissal.
An employment tribunal will expect your employee to give you a fair indication of any disputes and made a serious and reasonable attempt at resolving it, in line with their formal policy. Employers cannot use one set of rules for one employee and different rules for another. This is not the case for gross misconduct, where an employer can dismiss you without warning and ‘on the spot’.
Has There Been a Dismissal?
Usually it is obvious whether a dismissal has taken place. The employer will have told the employee they have been dismissed, and will usually have confirmed it in writing.
Sometimes, it is more complicated – for example if an employer says something unclear which the employee takes as a dismissal but which the employer did not mean as one.
If an employer acts in a way which undermines the relationship between employer and employee, or commits a breach of contract – such as not paying wages for example, the employee is entitled to resign and claim constructive dismissal.
This is a phrase meaning the resignation is deemed to be a dismissal, because of the way the employer has acted.
Is it an Unfair Dismissal?
Stage 1
For there to be a dismissal an employer must prove that the reason, or if there are more than one the principle reason, falls into one of the categories falls into one of the categories set out in the Employment Rights Act 1996.
These categories are:
- The employee lacked the required capability or qualification to carry out their role
- The dismissal was a result of the conduct of the employee – such as dishonesty, poor attendance or failure to follow instructions for example
- There was a genuine redundancy
- The continuation of the employee’s employment would contravene a statute, for example there is a requirement to drive during the course of your employment but you have been banned due to speeding
- Some other substantial reason (SOSR) – Any reason that does not fall within the above. This however does not mean it is any easier for an employer to raise this. Some example SOSR’s include:
- A personality clash between an employee and their employer
- A client expresses a wish that an employee is no longer involved in managing their account
- An employee unreasonably refuses to accept changes to terms and conditions
If an employer is unable to prove one, or more, of the above reasons for dismissal then the termination of the employee’s employment will be deemed to have been unfair.
If an employer can prove that the reason for the employee’s dismissal does come under one of the above categories, it is still down to the Employment Tribunal to decide “in accordance with equity and substantial merits of the case” as to whether or not the dismissal was fair.
Stage 2
The tribunal will also need to decide whether the dismissal was within the “range of reasonable responses” of that employer.
The employer, for example, may have had grounds for dismissing an employee because of their performance or conduct, but that does not mean the employer had to take this step. If a tribunal believes that no reasonable employer would have dismissed an employee under the same circumstances, then the dismissal will still be unfair. The tribunal in making its decision will also take into account the size and administrative resources of an employer.
What can you do if you have been unfairly dismissed?
If you want to take your case to an employment tribunal, you must be able to prove that your dismissal was unfair under UK employment law. Likewise, your employer has to show evidence to the contrary. We strongly suggest seeking legal advice at this stage in order to assess your situation and collate the required evidence.
When defending the allegation, your employer will be required to:
- Prove they followed the correct dismissal procedure
- Prove they did not single you out or treat your situation as special
- Prove that you were previously and sufficiently made aware of company policies and rules
You can only take your case to a tribunal if you have followed the normal procedure of your company and still not reached a satisfactory outcome. It’s important that you have kept copies of all correspondence between yourself and your employer, including any meetings held, and notes about events and actions relevant to your dismissal.
Frequently Asked Questions
Can my employer rely on any new information found after I have been dismissed?
No they cannot. The test as to whether or not the dismissal was fair is upon the basis of what the employer knew at the time. No argument can be raised that your employer would have dismissed you in any event, because of information they had discovered after you had been dismissed.
How important is it for an employer to follow a correct process?
Even if your employer has a justified reason to dismiss you, the dismissal will still be unfair if your employer has not followed a correct process.
This could be, for example, where your employer has not carried out a proper consultation or selection process in a redundancy situation.
For dismissals based upon misconduct, or performance, the processed that your employer should follow is largely governed by the ACAS Code of Practice, which provides that there should be sufficient investigations, evidence, warnings (in most cases) and the right to be accompanied at meetings.
Can anyone claim unfair dismissal?
The right to bring a claim to an employment tribunal for unfair dismissal isn’t available to:
- Self-employed people
- Independent contractors
- Members of the armed forces
- Employees who have reached a settlement with their employer through Acas (Advisory, Conciliation and Arbitration Service) or the Labour Relations Agency (LRA) in Northern Ireland
- Employees who have reached a settlement with their employer through a binding settlement agreement after taking legal advice
- Employees employed under an illegal contract, (for example, a barman under the age of 18)
- Employees covered by a dismissal procedure agreement that’s been legally exempted from the unfair dismissal rules
- Employees taking part in unofficial industrial action (unless the dismissal is for an automatically unfair reason)
- Police staff (unless the dismissal relates to health and safety or whistleblowing
- Those working on a fishing vessel and paid by a share in the profits or gross earnings of the vessel.
What is the qualifying period of employment necessary to make a claim for unfair dismissal?
You will normally need to have been continuously employed with the same employer for at least 23 months and 3 weeks without a break and not already been served with notice expiring before 2 years employment.
In some cases, you can still claim continuous employment if there has been a break which falls into one of the following cases:
- Sickness, aternity, paternity, parental or adoption leave
- Annual leave
- Employment overseas with the same company
- Time between unfair dismissal and an employee being reinstated
- When an employee moves between associated employers
- Military service, eg with a reserve force
- Temporary lay-offs
- Employer lockouts
- When a business is transferred from one employer to another
- When a corporate body gets taken over by another because of a legal change
There are also some limited exceptions where by the continuous period does not apply at all. This is known as automatic unfair dismissal.
What is automatic unfair dismissal?
A dismissal will be automatically unfair with no qualifying period of service necessary in exceptional circumstances.
These circumstances include:
- If the dismissal was connected with a health and safety reason that the employee became aware of
- Where the employee has asserted a statutory employment right (such as maternity or paternity leave)
- Whistleblowing
- Participating in trade union activities
- Where the employee is dismissed by reason of a business transfer, (as they are protected under the TUPE regulations,(but they still need a qualifying period of service for TUPE claims)
What is the difference between constructive and unfair dismissal?
Unfair dismissal refers to the act of having your employment terminated in a way that is unlawful. Typically this is when none of the 5 lawful reasons for being dismissed apply, or the employer has not followed the correct process.
Constructive dismissal is when you are put in a situation where you are forced to resign due to the conduct of your employer, which has made the relationship untenable. Whilst it is referred to as a dismissal in law, the act itself is more like a resignation by the employee.
Compensation for Unfair Dismissal
If successful a claim for unfair dismissal will lead to damages being awarded by the Employment Tribunal.
The damages are made up of two elements, namely
- The basic award
- The compensatory award
Unfair Dismissal – Basic Award
There are two main elements in the calculation of the basic unfair dismissal award. These are the employee’s length of service at the effective date of termination and the employee’s age at the time of dismissal.
For the purposes of calculation a maximum of £489 per week gross (from 6th April 2017) is allowed and up to a maximum of 20 years’ service (maximum of £14,670). The calculation depends on the age of the employee and uses a multiplier:
- half a week’s pay for each year of employment in which the employee is under the age of 22
- one week’s pay for each year of employment in which the employee is below the age of 41 but not below the age of 22
- one and a half week’s pay for each year of employment in which the employee was not below the age of 41
There is no lower age limit for a Basic Award (unlike a Statutory Redundancy Payment).
The Basic Award can be reduced:
- if the employee unreasonably refuses an offer of reinstatement;
- if the employee is held to have contributed to his/her own dismissal by his/her culpable conduct;
- and by any payments already made to the employee, for example, money in lieu of notice or redundancy payments.
- where the employee has been unfairly dismissed for a reasons relating to a trade union “blacklist” and has received a Basic Award in respect of the same dismissal.
Unfair Dismissal – Compensatory Award
The elements that make up the award are:
Loss of wages up to the date of the Tribunal hearing
This covers the period from the end of the notice period (or dismissal) to the date of the Tribunal hearing,less any earnings from new employment, or to the start date of a new job if higher paid.
Future Loss of Wages
As estimated by the Tribunal. If a new job has been found then this element is not included unless the employee’s new employment pays less, in which case the Tribunal estimates this future loss. Most Tribunals will award between 6 and 12 months’ future loss, although in some cases Tribunals can award significantly more.
Loss of Associated Benefits
Loss of car, health benefits, share options, pension loss, etc.
Loss of Employment Protection (Statutory Rights)
Usually anything between £250 to £700.
Loss of pension rights /contributions Expenses in seeking work
Case law has now established that there is no compensation payable for stress or injury to feelings in unfair dismissal claims.
Unfair Dismissal – Reduction in the Compensatory Award
The employee is under a duty to take reasonable steps to reduce his/her loss by gaining alternative employment as soon as possible. This is called “mitigation”. Any failure to mitigate will limit loss of earnings awarded.
Any conduct on the part of the employee before the dismissal, which contributed to that dismissal, may lead to the compensation being reduced.
In any circumstances where the Tribunal considers it just and equitable to reduce the Compensatory Award, it may do so. This may sometimes be seen where the employer discovers after the dismissal that the employee was guilty of some serious misconduct other than that which he/she was dismissed for.
If the dismissal is held to be procedurally unfair, the Tribunal will ask itself the question whether this failure would ultimately have made any difference to the outcome. If not, then compensation will be limited to the period it would have taken for a proper procedure to take place before a fair dismissal could have occurred. This is commonly known as a “Polkey” reduction.
Additional Award
An additional award is made if the employer fails to comply with an order made by the Tribunal for reinstatement or re-engagement unless the employer satisfies the Tribunal that it was not practicable to comply.
If the Tribunal orders the employee be reinstated and the employer fails to carry out this Order, an additional award of between 26 and 52 weeks’ pay can be made at a maximum of £489 per week (from 6th April 2017).
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