Unfair Dismissal

Only employees can claim that they’ve been unfairly dismissed. The right doesn’t extend to workers or those who are self-employed.  The employee will need to be dismissed, and in most cases, they will need to have worked for their employer continuously for at least two years, although there are some limited exceptions to this rule.

The general rule in unfair dismissal cases, is that the employee needs to have worked for their employer for two years at the time of their dismissal, to be entitled to bring a claim. But, there are some exceptions to this.  If an employee is automatically unfairly dismissed, they will not need to show that they have been employed for two years. Automatic unfair dismissal occurs when an employee loses their job for a certain reason, including:

• In connection with them carrying out jury service
• Connected to pregnancy, childbirth or statutory leave, such as maternity leave, paternity leave, adoption leave, parental leave, shared parental leave, time off to attend antenatal appointments or adoption appointments, or time of for dependants
• For a Health and safety reason
• In connection with Sunday working
• Connected to rights under the Working Time Regulations
• For acting as an employee representative, pension representative or occupational pension trustee
• For blowing the whistle
• Relating to the national minimum wage
• For asserting a statutory right
• Connected to minimum wage
• In connection with an application for flexible working
• For being a trade union representative or member
• taking part in legal, official industrial action for 12 weeks or less, for example going on strike
• In connection with the exclusivity clause in a zero hours contract

For an employee to claim unfair dismissal, they must first show that they’ve been ‘dismissed’.

The dismissal may be an actual dismissal, where the employer ends the employee’s contract of employment, with or without notice.  This can be done in writing, or the employer may just tell the employee orally that their employment is to come to an end. 

Or, the employee may be able to show that they’ve been ‘constructively’ dismissed. This is where the employee resigns on the back of the employer breaching a fundamental term of their contract of employment, and then they ‘construct’ a dismissal out of their resignation.  The term that the employer breaches must go to the heart of the employment relationship, and it can be either an express term, such as the obligation to pay the employee, or an implied term, such as the implied term of mutual trust and confidence. 

Yes, you can.  All employees are employed under a contract of employment. In most cases it is a written contact of employment.  But, in some cases the employer won’t give the employee a written contract of employment, in which case they’re employed under an oral contract of employment.  Either way, if an employee is unfairly dismissed, they’re entitled to bring a claim for unfair dismissal.   

If an employee wins their claim for unfair dismissal at an Employment Tribunal, the tribunal can award them compensation.  The amount of money the employee receives depends on a number of factors, including how long the employee worked for the employer, how much they earned, what type of work they did, and how long it took them (or will take them) to find a new job.

Each case will depend on its own facts, but in most cases the employee will be awarded compensation under the following heads:

Basic award

This is awarded to compensate the employee for being unfairly dismissed and is calculated in the same way as a statutory redundancy payment, follows:

• One and a half weeks’ pay for each year of employment after age 41.
• One week’s pay for each year of employment between ages 22 and 40.
• Half a week’s pay for each year of employment under the age of 22.

Up to a maximum of £643 per week.

Compensatory award

This is to reflect the financial losses the employee has suffered as a result of their unfair dismissal.  If the employee has a new job, then their losses will be reduced by the amount they are earning in their new role.  The tribunal will decide how long it thinks the employee will take to get back into the position they were in prior to being dismissed, and put a corresponding long-stop on the period for which they can claim losses.

Loss of statutory rights

This is to compensate the employee for the fact that, before they were dismissed, they were a protected employee (i.e. they had two years’ service and could claim unfair dismissal), but for at least the next two years they won’t be a protected employee.

Wrongful dismissal/breach of contract

This is compensation for the notice pay the employee should have received if they weren’t paid for the whole of their notice.

The amount an Employment Tribunal can award is capped at the lower of one year’s gross pay for the employee, of £105,707.  There are some cases where the cap doesn’t apply, such as whistleblowing cases and health and safety cases, but they’re definitely the exception rather than the rule.

A dismissal will be fair if it is (1) for one of the five potentially fair reasons and (2) a fair process is followed.  The potentially fair reasons are:

1. Capability or qualifications – If an employee is being dismissed because of their capability or qualifications, the employer should ensure:

• the employee knew what was required of them
• the employer took steps to minimise the risk of poor performance
• there was a proper appraisal of the employee and the problem was identified
• they provided training, supervision and encouragement
• they warned the employee of the consequences of them failing to improve
• they gave the employee a chance to improve, and
• they considered alternative employment, if appropriate

 2. Conduct – A dismissal on the grounds of conduct will only be fair if at the time of the dismissal, the employer believed the employee to be guilty of the alleged misconduct. The belief must be based on reasonable grounds following a reasonable investigation. The employer will need to show that they’ve carried out a reasonable investigation, set out the allegations, given the employee a chance to defend them, and given them a chance to appeal.

3. Redundancy – It’s unlikely that a redundancy dismissal will be fair unless the employer has:

• Warned and consulted any affected employees (or their representatives)
• Adopted a fair basis on which to select the employees for redundancy, and
• Taken such steps as may be reasonable to avoid or minimise redundancy by redeploying potentially redundant employees within its own organisation

4. Breach of a statutory restriction – If a dismissal for this reason is to be fair, the restriction will need to be severe and the employer will need to consider any alternative positions the employment can as an alternative to dismissal.

5. Some other Substantial Reason – this is a ‘catch all’ category.  If the employer wants to make the dismissal fair, they’ll need to consult with the employee, explore alternatives to dismissal and give the employee a chance to state their case, before they are dismissed.