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Understanding dismissal – what’s fair and potentially unfair

What do I need to know?

Dismissal is the termination of an employee’s employment – with or without notice. The law requires that a fair reason is given for the dismissal; that the disciplinary process leading to the dismissal conforms to standards of fairness and natural justice; and that the decision to dismiss is reasonable in all the circumstances.

What’s the difference between unfair and wrongful dismissal?

An employee may claim at an employment tribunal that the dismissal is “unfair” (against various statutory criteria and case law); or that the dismissal is “wrongful” (e.g. it has not been terminated in accordance with the terms of the contract).

What are fair reasons for dismissal?

There are five potentially fair reasons for dismissal:

  • Relating to the employee’s capability or qualifications for the job
  • Relating to the employee’s conduct
  • Because the employee is redundant
  • Because a statutory duty or restriction prohibits the employment being continued (e.g. if a lorry driver lost his driving licence he would no longer be able to comply with the law which governs his job)
  • Some other substantial reason (imprisonment of the employee, for example, would mean that they were no longer able to under the work they are being paid to do)

In each case, the dismissal is only fair if the employer acted reasonably in dismissing the employee for that reason. This includes following an appropriate procedure before dismissing them.

What is constructive dismissal?

Effectively, constructive dismissal happens when the employee dismisses themselves because they feel that conditions or an employer’s attitude at work have become so bad that they have little choice but to resign. The dismissal is therefore unfair and can lead to a constructive unfair dismissal claim. The legal definition is the termination of employment by an employee in response to a fundamental breach of contract by the employer. Sometimes this will be of an express term of the contract of employment, such as the right to be paid a certain amount on a certain date. More commonly, it will be that the employer’s behaviour destroys or seriously undermines the relationship of trust and confidence that should exist between employer and employee by, say isolating them or failing to deal with a grievance.

To prove a constructive unfair dismissal, an employee must demonstrate that:

  • the employer has breached the contract, and
  • this is a significant or fundamental breach of contract, and
  • they terminated their employment in response to that breach and did not delay resigning.

Example – the wrong way

Two sisters were dismissed for gross misconduct because they used the internet for personal reasons. The company policy stated no personal internet use during core working hours. However, the company neglected to tell them that their internet use was being monitored and so, they were able to claim unfair dismissal and win their case. The company was deemed to be “unreasonable” in dismissing them.

Example – the right way

Have a clear and concise internet use policy which states your company’s position on staff using the internet and how you intend to monitor that use. If you don’t already have such a policy, be reasonable with your staff and their internet use until you do. Remember, you can’t discipline or dismiss people if you haven’t made it clear to them what they’re doing wrong.

Dismiss an employee safely and minimise the risk to your business – we can show you how