There have been many changes to employment law and regulations in the last few years. A key area is the freedom or lack of freedom to dismiss an employee.
An employee's employment can be terminated at any time but unless the dismissal is fair the employer may be found guilty of unfair dismissal by an Employment Tribunal.
We set out below the main principles involved concerning the dismissal of employees including some common mistakes that employers make. We have written this factsheet in an accessible and understandable way but some of the issues may be very complicated.
Professional advice should be sought before any action is taken.
The Right to Dismiss Employees
Reasons for a fair dismissal would include the following matters:
- the person does not have the capability or qualification for the job (this requires the employer to go through consultation and/or disciplinary processes)
- the employee behaves in an inappropriate manner (the company/firm's policies should refer to what would be unreasonable behaviour and the business must go through disciplinary procedures)
- redundancy, providing there is a genuine business case for making (a) position(s) redundant with no suitable alternative work, there has been adequate consultation and there is no discrimination in who is selected
- the dismissal is the effect of a legal process such as a driver who loses his right to drive (however, the employer is expected to explore other possibilities such as looking for alternative work before dismissing the employee)
- some other substantial reason.
Claims for Unfair Dismissal
After one year's service employees can make a claim to an Employment Tribunal for unfair dismissal within three months of the date of the dismissal and if an employee can prove that he/she has been pressured to resign by the employer he/she has the same right to claim unfair dismissal or constructive dismissal.
If the employee wins his/her case the Tribunal can choose one of three remedies which are:
- re-instatement which means getting back the old job on the old terms and conditions
- re-engagement which would mean a different job with the same employer
- compensation where the amount can be anything from a relatively small sum to an unlimited amount if the dismissal was due to some form of discrimination.
If the dismissal is demonstrated as being due to any of the following it will be deemed to be unfair regardless of the length of service:
- discrimination for sex, race, age or disability
- pregnancy, childbirth or maternity leave
- refusing to opt out of the Working Time Regulations
- disclosing certain kinds of wrong doing in the workplace
- health and safety reasons
- assertion of a statutory right.
Statutory Disciplinary Procedures
On many occasions a dismissal which seems quite justified to the employer will be found to have been unfair if correct disciplinary proceedings were not followed. As a result of the Employment Act 2002 from October 2004 all employers must have a disciplinary procedure in place which satisfies the requirements of the Dispute Resolution Regulations 2004. Whether you employ just one or hundreds of employees ignorance will be no excuse if you fall foul of this important area of new legislation.
There is a basic three-step Dismissal and Disciplinary Procedure (DDP) which must be used before an employer dismisses or imposes a significant sanction on an employee such as demotion, loss of seniority or loss of pay.
It applies to all types of dismissal, including conduct, capability, redundancy, retirement, expiry of a fixed term contract, unsuccessful probation etc.
Standard procedure
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Step 1 |
Employers must set out in writing the reasons why dismissal or disciplinary actions against the employee are being considered. A copy of this must be sent to the employee who must be invited to attend a meeting to discuss the matter, with the right to be accompanied. |
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Step 2 |
A meeting must take place |
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Step 3 |
An appeal procedure must be established
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There may be some very limited cases where despite the fact that an employer has dismissed an employee immediately without a meeting, an Employment Tribunal will very exceptionally find the dismissal to be fair. This is not explained in the regulations but may apply in cases of serious misconduct leading to dismissal without notice. What this means in practice awaits the test of case law.
Modified procedure
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Step 1 |
Employers firstly set out in writing the grounds for action that has led to the dismissal, the reasons for thinking at the time that the employee was guilty of the alleged misconduct and the employee’s right of appeal against the dismissal |
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Step 2 |
If the employee wishes to appeal against the decision, the employer must invite them to attend a meeting, with the right to be accompanied, following which the employer must inform the employee of their final decision. Where practicable, the appeal meeting should be conducted by a more senior or independent person not involved in the earlier decision to dismiss. |
The only occasions where employers are not required to follow the DDP are as follows: