With the average award for unfair dismissal sitting at £10,812, missteps can be costly. It’s therefore essential that employers understand what a fair dismissal process looks like and what might constitute unfair dismissal.
What is a fair dismissal?
The key ingredients to a fair dismissal process are:
1. Having a valid reason to dismiss; and
2. Acting reasonably in the circumstances.
In relation to the first criteria, the Employment Rights Act 1996 lists five potentially fair reasons for dismissal. These are:
- Dismissal related to an employee’s conduct (e.g. theft, fraud, bullying or negligence)
- Dismissal related to the employee’s capability or qualification for the role (e.g. long-term sickness absence or performance concerns)
- Redundancy (e.g. business closure)
- Dismissal because of a statutory restriction, i.e. if continuing to employ the person would break the law, such as a driver losing his driving licence
- Dismissal for some other substantial reason. This is a ‘catch-all’ category that employers may rely upon if none of the other potentially fair reasons for dismissal apply (e.g. the employee is handed a long prison sentence, their conduct outside of work brings the employer into disrepute, or they refuse to accept changes to contractual terms)
From a legal standpoint, however, it’s not enough that the employer has a valid reason to dismiss; you must also be able to demonstrate that you acted reasonably in the circumstances.
What is a fair dismissal procedure?
While there is no legal definition of ‘reasonableness’, in determining whether a dismissal was fair, an Employment Tribunal will consider a number of factors, including whether the employer:
- Properly investigated the issues and considered mitigating circumstances
- Informed the employee of the issues in writing and notified them of the potential for dismissal
- Conducted a disciplinary hearing with the employee to give them an opportunity to respond
- Allowed the employee to be accompanied at any hearings
- Informed the employee of the decision to dismiss in writing and gave the employee the chance to appeal
What makes a dismissal unfair?
A dismissal will be considered unfair if:
- The reason for dismissal does not fall under the scope of one of the five potentially fair reasons for dismissal outlined above
- The employer did not follow a fair disciplinary or dismissal process and/or the decision to dismiss was outside the range of reasonable responses open to the employer.
In cases of misconduct or performance concerns, employers should follow the procedures set out in the Acas Code of Practice on Disciplinary and Grievance Procedures, as an Employment Tribunal will take this into account when assessing whether an employer has acted reasonably.
If it is found that an employer has unreasonably failed to follow the relevant procedure in the Code, a Tribunal may consider that the dismissal is unfair.
Likewise, in redundancy situations, the main elements to a fair redundancy process are:
- Warning employees of redundancies
- Creating and applying fair and non-discriminatory scoring criteria and consulting with employees and exploring suitable alternative employment options
If you fail to follow a fair selection or consultation process, you may find that the dismissal is deemed unfair.
An employee with at least two years’ service may be able to submit a claim to a Tribunal for unfair dismissal. Claims must generally be submitted within three months of the date the employee’s employment was terminated.
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