Understanding Unfair Dismissal

If you’re facing an employment related legal issue, you’re not alone. We understand that dealing with employment law can be overwhelming, whether you’re the employer or the employee.

Unfair dismissal is a statuary right that is important to understand when an employee is suddenly dismissed. Successful cases that received compensation have been falling since 2010, although in 2021/22, there was a rise of cases that resulted in the employee’s favour. Today, we’ve explained what you need to know about unfair dismissal, and how it can affect you.

What is unfair dismissal?

Employees that have worked at a business for over two years have the right to not be unfairly dismissed. However, employees that have not yet worked at a business for two years may still have this right, as there are exceptions. What falls under ‘unfair dismissal’ must include at least one of the following:

  • No fair reason for dismissal
  • Not enough reason to justify dismissal
  • The employer did not follow fair procedure

Fair dismissal procedure must also follow the Acas Code of Practice on disciplinary and grievance procedures if the dismissal’s reasons involved misconduct or performance capability. While employees are generally protected by the Acas code, every company has its own disciplinary or dismissal process to follow.

There is a limited window of opportunity for an employee to begin the appeal process for an unfair dismissal. This starts from the last day of employment and lasts for three months.

What employers should do if they want to dismiss an employee

An employer must show that there is valid reason for an employee to be dismissed. If there is more than one reason for dismissal, then the principle reason must be valid. The reasons given for an unfair dismissal cannot be based on new discoveries or behaviour after it has already occurred.

However, even if an employer proves that the dismissal is for fair reasons, it is still ultimately up to the court to decide whether the dismissal was fair or not. They will decide if the employer responded reasonably in dismissing the employee, or if a less severe penalty would have been adequate.

If a court believes that no reasonable employer would use the given reason to dismiss an employee, then the dismissal will still be determined as unfair. This decision will be made, factoring in the size and resources of the employer, such as if they are an SME.

Five fair reasons for dismissal

To be considered fair, the reason for dismissal must fall into at least one of the five categories that are set out by the Employee Rights Act 1996. These include;

  1. Lack of Capability:
    The employee lacked the qualification or the ability to perform the work that they were employed to do.
  2. Genuine redundancy:
    The employee’s role is no longer necessary due to business reasons.
  3. Conduct:
    The employee behaved in ways that amount to gross misconduct, including poor attendance, dishonesty, and failure to follow instructions.
  4. Contravention of a statutory enactment:
    If an employee is no longer able to perform a key part of their role, like if they are banned for speeding when their day-to-day work involves driving, this is what is known as contravening a statute.
  5. Some Other Substantial Reason (SOSR):
    The dismissal follows none of the above reasons. SOSR could include a personal disagreement with the employer or a non-renewal of a fixed-term contract that is specific to certain roles. Every SOSR case will be determined by its own context and facts.

The consequences of unfair dismissal

If a dispute arises regarding an employee’s termination, the involved parties may consider alternative resolutions such as compromise agreements. These may include reinstating the employee in their previous position or re-engaging them in a different role.

Financial compensation may be part of the resolution, taking into account factors like the employee’s age, gross weekly pay, and length of service. If the agreement includes reinstatement and it is not implemented, additional compensation may be required.

It’s essential to note that there are limits on the compensation that can be awarded in cases of dispute resolution, with exceptions for instances related to health and safety or whistleblowing.

Thomas and Thomas Solicitors is a friendly, local law firm that has a unique insight and an inclusive approach to clients with years of experience. With a team of specialists in their specific legal field, the firm offers a range of legal services, including employment law. Get in touch with us today by emailing or visiting to find your nearest office.