Dismissals

Types of dismissals

Dismissals occur where:

The employer terminates the contract.

A fixed-term contract expires and is not renewed.

The employee resigns because of the employer’s actions and, under the circumstances, is justified in doing so (see constructive dismissal on page 7).

Fair and unfair dismissal

A dismissal may be fair or unfair, depending on the reason for dismissal and whether the employer acted ‘reasonably’ in the circumstances. You should bear in mind that employment tribunals follow previous legal decisions in deciding/defining what is ‘reasonable’.

To dismiss an employee fairly, you must firstly have a fair reason for doing so. These designated reasons are:

Capability or qualifications.

Conduct.

Illegality or a contravention of a statutory duty.

Redundancy.

Some other substantial reason (SOSR).

SOSR is a very wide category and is used to cover virtually every other possible reason.

For example, an employee who refused to use computers when they were installed, despite training, was dismissed. This was said to be a valid reason to dismiss. SOSR is a very difficult area of employment law.

Automatically unfair dismissal

Employees may bring a claim for automatically unfair dismissal, regardless of their length of service, if they were dismissed or unfairly selected for redundancy on one of the following grounds:

Exercising or trying to exercise a statutory (legal) employment right. These include the rights to:

A written statement of employment particulars.

An itemised pay statement.

A minimum notice period.

Maternity, paternity or adoption leave.

Time off for antenatal care.

Parental leave.

Time off to care for dependants.

Request flexible working arrangements.

Not be discriminated against because of age, disability, gender, gender reassignment, marriage or civil partnership, pregnancy or maternity, race (including colour, nationality or national/ethnic origin), religion or belief, sexual orientation.

Guaranteed pay when work is not available.

Time off for public duties (e.g. jury service).

Protection against unlawful deductions from wages.

Remuneration during suspension on medical grounds.

Refusing to do shop or betting work on a Sunday.

Making a public interest disclosure (whistle-blowing).

Taking certain specified action on health and safety grounds. This includes:

Carrying out or trying to carry out any activities in the role of a health and safety representative.

Performing or trying to perform duties as an official or employeracknowledged health and safety representative committee member.

Bringing to an employer’s attention a concern about health or safety in the workplace.

Leaving, proposing to leave or refusing to return to the workplace (or any dangerous part of it) if there is a serious, imminent danger that cannot be prevented.

Taking or trying to take the appropriate steps to protect him/herself or other people from a serious and imminent danger.

On the transfer of an undertaking or part of an undertaking, and the transfer itself, or a reason connected with it. This is unless it can be established that the dismissal was for an economic, technical or organisational reason entailing changes in the workforce.

Having exercised a right to be accompanied, or acted as a companion, at a disciplinary or grievance hearing.

Enforcing or seeking to enforce a right under the Working Time Regulations 1998. This includes protection against a refusal to:

Break working time rights – even if your employer tells you to work.

Give up one of the working time rights.

Sign a workforce agreement that impacts upon working time rights.

Reasons relating to trade union membership, recognition or subscription funds. This includes being dismissed for:

Deciding to join, not to join or take part in the activities of a trade union or independent trade union, or for using its services.

Refusing to give up rights under a collective agreement.

Objecting to or refusing to make a payment for union membership.

Showing support or non-support of any aspect of trade union recognition in the workplace.

Asking an employer to stop paying a contribution of a trade union subscription into the trade union’s political fund.

Objecting to a deduction of unauthorised or excessive union subscriptions from pay. Having taken part in lawfully organised, official industrial action lasting 12 weeks or fewer (or longer, in some circumstances).

Reasons relating to the National Minimum Wage (NMW). This includes being dismissed for:

Qualifying, or being about to qualify, to be paid the NMW.

Insisting on a right to be paid at least the NMW.

Reporting an employer for not paying the NMW.

Being an employee representative (or thinking about becoming an employee representative). This includes consultations with an employer about redundancies or business transfers, or as a:

European Works Council representative.

Member of a special negotiating body.

Information and consultation representative.

Activities undertaken as an occupational pension scheme trustee.

Being treated less favourably as a part-time or fixed-term employee than as a full-time or permanent employee. This includes being dismissed because of:

Part-time or fixed-term status.

Making a complaint about being treated less favourably than another employee.

Giving evidence or being involved in a complaint raised by another employee.

An employer believing the employee intended to do any of these things.

Being entitled, or potentially being entitled, or enforcing rights relating to, Working Tax Credits.

Constructive dismissal

Constructive dismissal occurs where an employee resigns because his or her employer has fundamentally breached his or her contractual terms, for example making a unilateral change to an employee’s contract by reducing his or her annual salary.

Note: In order to bring a claim for constructive dismissal at an employment tribunal an employee is required to have 24 months’ (two years’) service of employment. Unless they happen to bring a claim under one of the categories mentioned above where 24 months’ service is not required.

Wrongful dismissal

Wrongful dismissal is where a contractual term is broken in the dismissal process, for example where an employer dismisses an employee without providing him or her with his or her full contractual notice entitlement.

Note: There is no qualifying period for an employee to bring a claim for wrongful dismissal at an employment tribunal.

Reasonableness

As an employer, you should act reasonably and in accordance with the Acas Code of Practice if you decide to dismiss an employee. In cases of alleged misconduct, before considering dismissal, you should:

Genuinely believe the employee has committed the offence.

Have reasonable grounds for that belief .

Have carried out proper and reasonable investigations.

Have followed procedures.

Have informed the employee of the allegations and listened to his or her views.

Have allowed the employee to be accompanied at the disciplinary hearing.

Have given the employee the chance to appeal against the decision and acted within the ‘band of reasonable responses’ available in the circumstances.

Note: ‘Reasonableness’ may also depend on whether the employee could be expected to understand the consequences of his or her behaviour.

Notice periods

Employees are entitled to notice either under their contracts of employment or, if not specified, according to statutory notice provisions. Employees who are dismissed on the grounds of gross misconduct may however be dismissed without notice.

The statutory minimum notice period you should provide to the employee in all other types of dismissal situation is set out in the table below.

If the reason or principal reason for an employee’s dismissal relates to his political opinion or affiliation, then the employee does not need any qualifying service to bring an unfair dismissal claim on that basis.

Sick pay during the notice period

If, following an employee’s resignation or dismissal, they are absent from work due to sickness during their notice period, the requirement to pay sick pay may change.

If the employee’s contract entitles them to receive only a week’s notice for every year’s service (i.e. the minimum statutory requirement) and no salary during sickness absence, i.e. only SSP, then the employer is obliged to pay full salary while the employee is off sick during their notice period.

If the employee’s contractual notice exceeds the statutory minimum by at least a week the employer would only be required to pay SSP, or in some circumstances, where SSP has expired, would not have to pay anything at all, assuming the employee is on sick leave for the period of his notice.

This rule applies no mater who actually gave the notice. For example if the person leaving resigned, you still use the rule above.

LENGTH OF SERVICE

Less than one month

Between one month and two years’ continuous service

Between two years and 12 years’ continuous service

More than 12 years’ service

MINIMUM NOTICE PERIOD TO BE GIVEN BY THE EMPLOYER

Nil

One week’s notice

One week’s notice for each complete year of service 12 weeks’ notice

Upon dismissing an employee, you may not wish him or her to work out his or her notice period. If this is the case, provided you have the contractual provisions in place within the contract, you have two options:

1. Pay in lieu of notice. This means the employee can leave immediately, but receives payment up to the date he or she would have left had he or she been allowed to work a period of notice as per his or her contract.

2. Place the employee on ‘garden leave’. This means you continue to pay the employee up to the date when the notice period ends, but ask him or her to stay at home and not to do any work.

Note: Pay in lieu of notice can potentially amount to a breach of contract unless this is specifies in the employee’s contract.

Final payments and other matters

An employee who has been dismissed may be entitled to these final payments:

Normal pay up to the date of termination

Pay for unused accrued holiday

Any pay in lieu of notice

All contractual bonuses, overtime or benefits calculated up to the effective date of termination.

If the employee has caused damage, or if you have suffered some quantifiable loss arising from the employee’s conduct, the cost of this cannot safely be deducted unless the contract allows for it.

In a summary dismissal, do not include pay in lieu of notice. You may limit holiday pay to statutory holiday entitlement only, if your contract allows.

Written reasons for dismissal

If an employee asks for written reasons for his or her dismissal, you must provide the information within 14 days of the request if he or she has at least two years’ continuous service.

As a matter of course, you should give reasons in writing to any female employee dismissed while she is pregnant, on statutory maternity leave or adoption leave.