Dismissal of Employees

To be a fair termination of employment a dismissal needs to be for one of the five potentially* fair reasons for dismissal:

1. Capability
2. Conduct
3. Redundancy
4. Statutory illegality
5. Some other substantial reason

Where an employer dismisses an employee for one of the above reasons it does not necessarily make it a fair dismissal as the employer also has to show that they acted reasonably in treating the reason as sufficient to dismiss the employee by considering whether they followed a fair procedure and whether the decision to dismiss the employee fell within the 'range of reasonable responses open to a reasonable employer’ based on the information known at the time.

Some dismissals are classed as automatically unfair and these can arise where an employee is dismissed for a discriminatory reason such as being pregnant, for making a protected disclosure, or where their dismissal is because of a TUPE transfer.

Employees who have served for less than two years are not generally able to bring claims for unfair dismissal but there are a number of exemptions that apply and circumstances where if the main or principle reason for the dismissal is established to be for one of the exempted reasons they are permitted. 

The fair reasons for dismissal are set out in the Employment Rights Act 1996, you should take legal advice before seeking to bring an employees employment to an end for any of these reasons but they can be briefly described as situations which include the following:

1)  Capability

1. The employee’s qualifications are insufficient
2. The employee demonstrates incompetence in carrying out their duties
3. The prolonged or intermittent absence due to ill health means the employee is incapable of attending often enough to comply with the contract of employment

Employers need to be very careful when bringing an employees employment to an end involving ill health to make sure they are not acting in a way that could be deemed to be disability discrimination. Employers should take specific advice on a case-by-case basis to ensure that they are not unfairly dismissing or committing disability discrimination. disability.

2) Conduct

Termination of employment for conduct is where the employee has committed a serious offence amounting to gross misconduct or a number of misconduct over time for which previously warnings have been given. It is analogous to the loss of a driving licence where points can be added and lost over time but if the employee reaches a limit of points or in this case warnings they can have their employment terminated.  Likewise where a driving offence may be of a serious enough nature the courts can go straight to a ban, employees, like poor drivers, are normally be given the chance to improve their behaviour through a warning system for more minor offences, and levels of sanctions increase dependant on repeated offences such as a verbal warning, first written warning or a final written warning before reaching dismissal.  A serious offence on its own however may justify immediate dismissal.

3) Redundancy

Redundancy occurs in three main ways:

1. The employer has ceased or intends to cease carrying on the business in which the employee worked
2. The employer has ceased or intends to cease carrying on the business in the place in which the employee worked, or
3. The requirements of that business for employees to carry out work of a particular kind, or for employees to carry out work of a particular kind in the place where the employee was employed by the employer, have ceased or diminished or are expected to cease or diminish

Once employers have established that one of the above reasons exists they need to ensure that they follow a fair procedure.  The procedure and the requirements change depending on the numbers of employees affected by the redundancy.  If there are more than 20 employees affected by the redundancies it is a collective redundancy and higher levels of consultation are required together with fixed period in which an employer can not terminate or face a protective award. The fixed period of consultation extends even further when more than a hundred employees are affected.

4) Statutory illegality

This applies where it would be illegal for the employee to carry on working in their job and therefore can not fulfil their contract.  For example a taxi driver losing his driving licence.

Care should be taken where an employer may feel that they are employing someone illegally who does not have the requisite work permit or immigration approval to work in the UK. Fines per worker can reach £20,000. Biscoes can advise employers on their immigration law requirements and how to address a situation whereby they may suspect that they have inadvertently engaged an illegal worker.

5) Some other substantial reason

This is a sort of catch-all-else reason if in the circumstances an employer can show ‘some other substantial reason such as to justify the dismissal holding the position which the employee held’ and can show that a fair procedure was used and the decision to dismiss fell within the range of reasonable responses open to the employer.

* There is a possibility to rely upon retirement as a fair reason but the law changed significantly with the introduction of age discrimination and the removal of the statutory retirement age.  An employer would normally face an unfair dismissal and age discrimination unless it was able to establish that having a retirement age was a justified means of meeting a legitimate aim.  Employers should be very wary of thinking of relying upon this as reason.