When an employer dismisses an employee without good reason and/or without following an appropriate process, this could give rise to a claim for a wrongful or unfair dismissal. The ACAS Discipline and Grievance Code of Practice sets out the basic procedural requirements to effect a fair dismissal, for example, you are entitled to work out or be paid for your notice period unless you are guilty of gross misconduct. Most employers will also have their own Disciplinary Policy, which should be followed prior to dismissal where appropriate.
Employees must have at least two years’ service on the date of termination to bring a general unfair dismissal claim. However, there are a number of unfair dismissal claims where an employee does not need to have any minimum qualifying period of service, such as where the dismissal is deemed automatically unfair (see below). Please speak to our experts for further details on when these exemptions may apply.
Potentially fair dismissal
Dismissal is potentially fair if an employer can show that it is for one of the following reasons:
- A reason related to an employee’s conduct
- A reason related to an employee’s capability or qualifications for the job
- Because of a redundancy or business reorganisation
- Because a statutory duty or restriction prohibited the employment being continued
- Some other substantial reason of a kind which justifies the dismissal (SOSR)
Once a potentially fair reason is established the employer must also act reasonably in dismissing the employee for that reason. This will include following a fair procedure in the relevant circumstances. What this means differs dependent upon the reason for dismissal.
Automatically unfair dismissal
Dismissals are classed as ‘automatically unfair’ if the reason for dismissal is connected to an employee exercising specific rights relating but not limited to:
- Pregnancy: including all reasons relating to maternity
- Family reasons: including parental leave, paternity leave (birth and adoption), adoption leave or time off for dependants
- Representation: including acting as an employee representative
- Trade union membership grounds and union recognition
- Part-time and fixed-term employees
- Pay and working hours: including the Working Time Regulations, annual leave and the National Minimum Wage.
- For health and safety reasons
- A transfer of an undertaking
- Employee attempting to enforce a statutory right
In these circumstances it is not necessary for the employee to have two years qualifying service. This list is not comprehensive and we advise you to check with our employment experts to see if these exemptions may apply to you.
How an employee can succeed in an unfair dismissal claim:
In order to raise a claim for unfair dismissal, an employee must satisfy a Tribunal that;
- They were an employee, whether part time or full time;
- They had the necessary continuity of service or one of the exemptions applies;
- They were dismissed for a reason that wasn’t one of the 5 fair reasons, or the reason was not sufficient to merit dismissal, and / or;
- The employer did not follow proper procedure and the dismissal was not fair in all the circumstances.
How an employer can defend an unfair dismissal claim:
If an employer has shown that the reason for dismissal falls within one of the fair dismissal categories the Tribunal will then consider whether in all the circumstances the employer acted reasonably. This also involves looking at whether the employer followed a fair procedure and whether it was reasonable to treat the reason stated as sufficient for dismissal.
How much can be claimed
If successful in a claim for unfair dismissal an employee can claim a basic award which is calculated in a similar way to a statutory redundancy payment, based on a formula that takes account of age, length of service and the amount of a week’s pay (subject to a statutory cap). A compensatory award can also be claimed based upon financial losses cause by the unfair dismissal. The maximum compensatory award is the lower of 52 weeks’ pay or £89,493 . This will rise to £93,878 on 6 April 2022. It is also possible for an employee to seek reinstatement or re-engagement, instead of monetary compensation.
General time limit:
Time limits in the Employment Tribunal are very strict. You have 3 months less one day from the date of termination of employment in which to bring a claim. All time limits are subject to the rules on the automatic extension of time for ACAS early conciliation. Speak to our experts if you have concerns regarding time limits.
Our team is well versed in advising on unfair dismissal as well as guiding clients through redundancy exercises and internal disciplinary and grievance procedures.