Unfair dismissal is the label given to a series of rights conferred on employees as a result of statute; it is entirely separate from wrongful dismissal.  Whereas wrongful dismissal looks at contractual rights, unfair dismissal looks at the reason for the dismissal and the way the employer handled it.

Eligibility

Not every worker can claim the right not to be unfairly dismissed.  Usually, the claimant must:

• be an “employee” and not self-employed;
• have one years continuous service with their employer;

There are however cases where the right to bring a claim for unfair dismissal arises without the need to have accrued one years qualifying service, and this is where dismissal is for an automatically unfair reason.  See below: Automatically Unfair Reasons

Potentially fair reasons for dismissal

In order to defend a claim of unfair dismissal, an employer must establish:

That, as a matter of fact or to the employer’s genuine belief, the reason or principal reason for the dismissal is one of the following potentially fair reasons:

• a reason related to the capability or qualifications of the employee for performing work of the kind which he was employed by the employer to do;
• a reason related to the conduct of the employee;
• the retirement of the employee;
• that the employee’s role was redundant;
• the employee could not continue to work in the position which he held without contravention (either on his own part or that of his employer) of a duty or restriction imposed by or under an enactment - this is a rarely relied upon reason;
• some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which that employee held.

In all the circumstances, the employer acted reasonably in treating the reason as a sufficient ground for dismissing the employee.  See below: Reasonableness of dismissal

Automatically unfair reasons

A number of reasons for dismissal are considered to be automatically unfair – that is to say that, irrespective of how fair the procedure followed by the employer was, a dismissal for that reason can never be fair.  The main categories of automatically unfair dismissal are:

• Health and safety dismissals;
• Pregnancy or childbirth related dismissals;
• Dismissals for asserting a statutory right - this will include most rights conferred under the Employment Rights Act 1996 such as a right not to suffer an unlawful deduction, a right to minimum notice, a right to time off for union activities and duties;
• Dismissals relating to union membership, non-union membership, trade union recognition or taking part in protected industrial action;
• Dismissal for asserting any right under the Working Time Regulations 1998.
• Dismissal for making a protected disclosure under the Public Interest Disclosure Act 1998
• Dismissal in connection with a refusal by a shop worker to undertake Sunday work;
• Dismissal in connection with performance of certain duties as an employee representative;
• Dismissal in connection with performance of certain duties as a pension scheme trustee;
• Dismissal in connection with the national minimum wage;
• Dismissal in connection with carrying out jury service;
• Dismissal in connection with exercising the right to be accompanied to a disciplinary or grievance hearing;
• Dismissal for asserting certain rights as a part time worker or fixed term employee;
• Dismissal in connection with an application for flexible working;

It is not necessary for the employee to establish anything more than one of the above reasons to obtain a finding of unfair dismissal.  The manner in which the employer handled the dismissal will be irrelevant.  Commonly, an employee will not need one years’ continuous service to bring an automatically unfair dismissal claim.

Reasonableness of dismissal

Establishing a potentially fair reason for dismissal is the simpler of the two tests which the employer must satisfy to avoid a finding of unfair dismissal.  It is more difficult for the employer to establish that it has acted reasonably in all the circumstances in treating the reason as a sufficient reason for dismissal.  Whether the procedure followed was reasonable or not will depend upon the reason for the dismissal, but a number of factors will always be considered when assessing the reasonableness of employer’s conduct:

A tribunal will not substitute its own view for that of the employer - the test is whether the employer has acted in a manner in which a reasonable employer might have acted;

The size and administrative resources of the employer’s business - the larger and more complex the employer the more sophisticated its approach to employment relations and the less ready it should be to dismiss;

Any relevant ACAS Code of Practice.

Minimum dismissal procedure / ACAS Code of Practice

The Employment Act 2002 introduced a compulsory system for resolving disputes in the workplace which required all employers to follow a minimum dismissal / disciplinary procedure (DDP). If the employer failed to follow the minimum procedure any subsequent dismissal was rendered automatically unfair (but the employee still required one years’ continuous service) and any tribunal award was increased or reduced by between 10-50% to reflect the extent of compliance with the DDP.

The procedures introduced by the Employment Act 2002 were repealed with effect from 6th April 2009.  A new ACAS Code of Practice on Disciplinary & Grievance Procedures came into force on the same day.  Failure to follow the Code (which does not apply to redundancy dismissals or non-renewal of a fixed term contract) will not render any dismissal automatically unfair but may lead to an increase/decrease in compensation of up to 25% to reflect the extent of compliance with the Code.

Complex transitional provisions determine which of the DDP or ACAS Code should be followed in situations when an employer commenced a disciplinary procedure before 6th April 2009, but in general terms, disciplinary procedures started after that date should be handled in accordance with the ACAS Code.

Penalties and time limits

A claim for unfair dismissal is brought in the Employment Tribunal, and if the applicant is successful, the Tribunal can award compensation, re-instatement or re-engagement, depending on what the applicant has requested.  Re-instatement or re-engagement will not be ordered where it is not reasonably practicable to do so, and this will be the case for example where the job has disappeared or where there has been a breakdown in the trust and confidence between employer and employee.  Where compensation is awarded, the Tribunal firstly makes a “basic award”, which is based on the number of years service and a week’s pay (currently capped at £350 per week).  The maximum basic award which can currently be made is £10,500.  In addition the Tribunal will order a “compensatory award” which reflects the claimant’s loss of earnings.  This award is currently capped at £66,200.

Any unfair dismissal claim must generally be brought within 3 months (less one day) of the dismissal.  However, in certain circumstances, this time limit may be extended at the tribunal’s discretion.