Dismissal Series Part 1 – What is Unfair Dismissal?

What is Unfair Dismissal?

Unfair dismissal, put simply, is when an employer terminates an employee’s contract when they didn’t have a fair reason to do so, whether that’s because they didn’t follow the correct procedure or because the decision to dismiss was too harsh given the circumstances.

Employees are protected by law against this eventuality, subject to certain qualifying criteria. Workers, such as the self-employed or agency staff are not protected against unfair dismissal, unless a tribunal agrees that in reality they are in fact employees.

Who can claim Unfair Dismissal?

The right to claim unfair dismissal kick starts at two years continuous service with the employer – before this, your employer couldlawfully dismiss you unfairly, unless it is for a reason that violates one or more of the following statutory rights, such as being dismissed for:

• Being pregnant or on maternity leave.
• Asking about your legal rights at work – e.g. to be paid minimum wage or to work within the working time regulations.
• Taking action about a H&S issue.
• Being a trade union member or taking part in trade union activities, including industrial action or acting as an employee representative.
• Whistleblowing – e.g. raising a protected disclosure relating to any of the following or an attempt to cover up any of the following:
  • A criminal offence
  • A failure to comply with a legal obligation
  • A miscarriage of justice
  • A H&S issue
  • Damage to the environment

To be dismissed for any of the above is an automatically unfair reason for dismissal – which employees are eligible to claim from day one of employment.

Claims for unfair dismissal must be made within three months of being dismissed.

What is a fair reason for Dismissal?

Legally, there are five reasons for dismissal that are considered fair. Although it’s not as black and white as this, a fair dismissal includes consideration that an objective and reasonable process has been followed, that the employee has been treated consistently as other employees in similar situations, and that the decision to terminate wasn’t too harsh given the circumstances.

The fair reasons for dismissal are:

• A significant lack of capability to perform the job – whether that’s due to poor performance or because of ill-health
• Conduct-related – either gross misconduct or repeated misconduct
• For a legal reason – e.g. the employee is not eligible to work in the UK
• Redundancy
• Some other substantial reason

Awards for successful claims

If a tribunal decides an employee has been unfairly dismissed, the employee will be awarded compensation, made up of:

• A basic award – a fixed sum calculated to a statutory formula; and
• A compensatory award – to compensate for the loss of earnings.

Both types of awards are capped and can be reduced depending on circumstances, including if the employee’s conduct has been at fault or if the employer has tried to follow some form of process with the employee.

Note that if there is proven discrimination of any kind the award can be unlimited – this would, however, fall under a claim for discrimination rather than unfair dismissal.

What if the reason is fair but there has been a breach of contract?

This would be wrongful dismissal – covered in the next blog of this series.