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How to dismiss an employee fairly

  • Check how much notice needs to be given to an employee in their employment contract to avoid a claim for wrongful dismissal.
  • Since 6 April 2012, if an employee (not a worker or self-employed contractor) has at least two years’ service, then they may claim unfair dismissal against their employer in an Employment Tribunal (“Tribunal”) by notifying ACAS within three months of the last day of their employment.
  • To avoid an unfair dismissal claim, the employer must:
  1. Have a fair reason to dismiss;
  2. Act reasonably in all of the circumstances, including following a fair procedure in implementing the dismissal; and
  3. Dismissal must be within the band of reasonable responses open to a reasonable employer.

It is important to show that any dismissal was both substantially and procedurally fair.

1. Fair reason to dismiss

  • Any employer should provide the employee with a written statement giving the particular reasons for the employee’s dismissal.
  • The dismissal must genuinely be for one of the following fair reasons:
  1. Conduct e.g. an employee’s refusal to follow a reasonable instruction.
  2. Capability e.g. where an employee is performing their job below the standard that is expected or required of them. (It may be appropriate to describe an ill health dismissal as a capability dismissal but approach with caution as this may leave an employer open to a potential disability discrimination claim if handled incorrectly).
  3. Redundancy i.e. where the employer has ceased or intends to cease continuing the business for which the employee is employed or at the location where the employee is employed or the requirements of the business for employees to carry out work of a particular kind has ceased or diminished or is expected to cease or diminish.
  4. Contravention of a statutory duty or restriction e.g. an employee’s immigration status prohibits them from continuing to work, the employee has a criminal history which prevents them from working in the relevant industry or no driving licence when it is an occupational requirement.
  5. Some other substantial reason e.g. an employee’s refusal to accept a reasonable change to their employment contract following a proper consultation with the employer or a very serious personality clash. Although this category is not as wide as it may sound and should not be seen as a “catch all.”

2. Act reasonably in all of the circumstances

The employer must act reasonably in all of the circumstances, in treating the stated fair reason (from the list above) as a sufficient reason for dismissing the employee. This involves following a fair procedure:

  1. Investigate the facts and keep a written record;
  2. Inform the employee of the outcome of the investigation and consider whether disciplinary action is warranted;
  3. Disciplinary hearing. Invite the employee to attend the hearing, setting out full details of the allegations in advance, and permit the employee to attend with a work colleague or trade union representative. Warn the employee that the outcome could be dismissal;
  4. Outcome of the disciplinary hearing. This may result in a verbal warning, a first or final written warning, demotion or dismissal. Treat past and present like-for-like cases as similarly as possible. Be consistent;
  5. Allow an appeal against the outcome of the disciplinary hearing, which should be heard by someone with no prior involvement and who is independent.
  • The Tribunal will consider the size and administrative resources of the employer when considering whether the employer’s investigation etc. was reasonable. The employer should treat the employee with sensitivity and be open minded to all possible scenarios.
  • The employer should follow its disciplinary procedure carefully. However, if an employer does not have a disciplinary procedure then it should instead follow the ACAS Code of Practice on Discipline and Grievance (“ACAS Code”). (The employer’s disciplinary procedure should mirror the ACAS Code anyway). ACAS’s accompanying good practice guide is a useful secondary tool.
  • The employer should handle any grievances raised by an employee properly and in accordance with its grievance procedure.

Automatic unfair dismissal

There are some automatically unfair reasons to dismiss an employee, sometimes regardless of the length of the employee’s service. Some of the automatically unfair reasons are for whistleblowing and acting as a trade union representative.

3. Dismissal must be within the band of reasonable responses open to a reasonable employer

The Tribunal will ask, was the sanction of dismissal in the range of reasonable responses open to the hypothetical reasonable employer, at the time they took the decision to dismiss? In particular, would a lesser sanction such as a warning or demotion have been more appropriate? It will consider the standards of the most lenient and the most strict employer and decide if the employer’s response falls somewhere in the middle.

This is intended to be a brief summary of the law of unfair dismissal only and we would strongly advise that you receive specific employment legal advice before attempting to dismiss an employee.