Unfair dismissal: an employer's quick guide

    Unfair dismissal: an employer's quick guide

    When it comes to employment-related disputes, most employers immediately think about unfair dismissal. Thanks to the abolition of fees in July 2017, the Employment Tribunal is seeing more and more claims brought by employees who no longer have a financial disincentive to stay away. In 2017/18, there were 17,384.

    But what exactly is unfair dismissal and what do employers need to know?

    What is unfair dismissal?

    An employee can claim that they have been unfairly dismissed if their employer does not have a potentially fair reason to dismiss them and/or has not followed a fair procedure in deciding to dismiss.

    Who can claim unfair dismissal?

    Generally, an employee has to have two years’ continuous service before they are eligible to make a claim for unfair dismissal. There are exceptions to this. For example, where the employee is dismissed because they are pregnant or have blown the whistle on their employer.

    What are the potentially fair reasons to dismiss an employee?

    If an employer wants to dismiss an employee, there are only five potential reasons that are lawful. The two which are most common are:

    • Misconduct - the employee has done something wrong; and
    • Performance - the employee is not doing their job well enough or is not capable of doing their job for some reason (including sickness)

    In addition, employers can point to:

    • Redundancy
    • Illegality
    • Some other substantial reason

    What process should an employer follow when dismissing an employee?

    The exact process depends on the circumstances but the fundamental point is that the employer has to act fairly and reasonably. This will include:

    • following their own policies and procedures
    • meeting with the employee to understand their point of view and seek their input
    • gathering further evidence.

    How much can an employee claim for unfair dismissal?

    There is a cap on the compensatory award for ordinary unfair dismissal of either one year’s salary or (as from 6 April 2018) £83,682, whichever is higher. The cap doesn’t apply in all circumstances. For example, the cap does not apply if the employee claims automatic unfair dismissal because of whistleblowing.

    Do I have to give my employee notice? If so, how much?

    Employees are entitled to notice unless they have committed an act of gross misconduct. The law sets out the minimum notice an employer must give to an employee as:

    • one week in the first two years of employment; and
    • from two years of employment, one week for each complete year (up to a maximum of twelve).

    By statute, employees only have to give one week’s notice.

    These provisions are often varied by the contract of employment so that employers and employees are required to give more than the minimum amount.

    I’ve heard of constructive unfair dismissal. What does this mean?

    Constructive unfair dismissal is where an employee is entitled to resign in response to a fundamental breach of their contract by the employer. In short, the employer has done something so bad as to justify the employee treating themselves as dismissed. If this can be proved, the employee can claim compensation in the same way.

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