Types of dismissal

The law recognises that there are times when employers need to dismiss staff but it seeks to ensure this is done fairly. However, poor performance may be a result of inadequate leadership, bad management or defective systems of work and, if so, remedies (often involving learning and development) can be put in place. Also, many cases of misconduct and poor performance can be dealt with by informal advice, coaching and counselling (see articles 48 and 188).

An employee must have been in continuous employment for two years before they can bring a tribunal case for unfair dismissal (the qualifying period). Since 1 October 2014 there has been an exception for armed services reservists who are dismissed by their civilian employer for a reason connected to their membership of a reserve force. The maximum amount that a tribunal can award for unfair dismissal is capped at one year’s salary or the maximum award, whichever is the lower. The maximum award is made up of the basic element, which is worked out in the same way as a redundancy award (see article 181) and a compensatory award, which is capped at £78,335 from 6 April 2015. The caps change each year.

Potentially fair reasons for dismissal

As discussed in previous chapters, an employer must prove the dismissal was for one of the following reasons:

• capability or qualifications

• conduct

• illegality or contravention of a statutory duty

• some other substantial reason

• redundancy

• retirement – but only if the employer has established an Employer Justified Retirement Age (see article 69).

As well as falling within one of the six potentially fair reasons given above, an employer must also have acted fairly and reasonably in taking that reason as sufficient cause for dismissing the employee. Tribunals can now no longer take discussions about ending the employment contract into consideration unless some sort of improper behaviour took place. However, in cases of discrimination and automatically unfair dismissal the tribunal can still refer to them. The basic principle is that it is not wrong to begin discussing whether and how an employee should leave the organisation by mutual agreement. The Acas Code of Practice on Disciplinary and Grievance Procedures and Discipline and grievances at work: The Acas guide both contain information that can help.

Automatically unfair reasons

These are dismissals on the grounds of proposed or actual trade union membership or non-membership, employee representation, acting as a pension scheme trustee, seeking to claim employment rights (such as to be paid the National Minimum Wage), whistleblowing, taking certain action in respect of health and safety, unfair selection for redundancy, pregnancy, or on grounds of discrimination including race, disability, sex, gender reassignment, pregnancy, age, sexual orientation, marital status or religious belief. In discrimination cases the qualifying period of employment is one year instead of two.

Wrongful dismissal

This occurs if the employee has evidence that the employer has breached the terms of the contract of employment. For example, an employer may not have given due notice.

Constructive dismissal

Employees can claim constructive dismissal if they feel the employer has placed them in such an intolerable situation by their actions that they were given no option but to resign. So, although technically the employee may have given notice, they may claim they were in reality dismissed by the employer. This may then give the employee the right to claim that the dismissal was unfair and the employee should raise a formal grievance with the employer.

Dismissals and TUPE

Dismissal purely because of a transfer under TUPE is automatically unfair. That is unless an economic, technical or organisational (ETO) reason entailing changes in the workforce was the main reason for the dismissal and the employer acted reasonably in using that reason to justify dismissal. An example would be where a business that is already in financial difficulty is transferred and the new owners require changes to be made to make the purchase viable. An employee who considers that his or her rights have been infringed can complain to an employment tribunal provided he or she has one year’s continuous service (see article 83).