There might be times where you need to permanently end an employee's contract.
It could be due to serious or gross misconduct or an inability to perform their work duties. Whatever the case, you may decide on dismissal.
But it's a complicated process. Dismissing employees involves several employment laws and rights. If ignored, an employer could face paying fines and rehiring employees.
In this guide, we'll look at what dismissal is, which UK laws apply, and how to let employees go fairly.
What is dismissal?
Dismissal is when an employer ends a work contract. This is usually done with notice.
An employee can be dismissed instantly, but only for the right reasons. Every employer must follow a proper dismissal process before ending any employment contract.
There are five ‘potentially’ fair reasons for dismissal. For example:
- Conduct: Like, committing gross misconduct.
- Capability: Like, being too ill to work.
- Redundancy: Like, ending jobs because of business closure.
- Statutory breach: Like, dismissing someone because of fake work papers.
- Some other substantial reason (SOSR): Like ending a fixed-term contract.
To be considered fair, an employer needs to show that an individual has breached their contract agreements. Or that the business is suffering because of the employee’s conduct. Dismissal can't be done without the employer giving a legal and fair reason.
It's also important to note that an employer should only use dismissal as a last resort.
What are different types of unlawful dismissal?
There are many types of dismissal, and some are considered unlawful. When you ignore the proper steps or don’t have a fair reason, employers could end up paying fines.
Here are different types of unlawful dismissal:
Unfair dismissal
Unfair dismissal is when you illegally end an employee's job but didn’t follow the proper process.
If this was done on purpose, there’s a higher chance of the employee winning this claim. (And receiving compensation for the circumstances).
An unfair dismissal can occur when you dismiss an employee for any of the following reasons:
- 'Whistleblowing' on a health & safety issue.
- Being part of trade union activities.
- Asking for parental leave (like maternity leave or adoption leave).
- Requesting flexible working.
Wrongful dismissal
A wrongful dismissal is when an employer dismisses someone, but it breaches their employment contract terms. For example, their notice period.
Proving wrongful dismissal will depend on how the employee was dismissed. For example, they were:
- Dismissed without statutory notice.
- Dismissed without contractual notice.
A wrongful dismissal is different to an unfair dismissal. That’s because an employee doesn't need two years of service to claim wrongful dismissal.
Constructive dismissal
A constructive dismissal is when an employee has no choice but to resign from their job.
This is usually because of the employer's conduct or circumstances. Here are reasons for constructive dismissal:
- Working in an unsafe environment.
- Withholding wages or reducing them unfairly.
- Ignoring grievances raised during work.
- Setting extreme deadlines or workloads.
- Forcing unreasonable changes onto staff.
Constructive dismissal might seem similar to a wrongful dismissal. However, the difference is that the employee faced such grief that they’re left with no choice but to resign.
Capability dismissal
A capability dismissal is when you dismiss an employee because of poor performance
An employer can use a capability procedure to prove this. It’ll show how the employee’s lack of ability has affected the business.
Here are reasons for capability dismissal:
- Dismissed due to false qualifications.
- Dismissed due to refusing to follow proper work standards.
- Dismissed due to ill-health. (There are separate rules for medical capability dismissal).
Dismissing due to an employee's capability is not illegal. But employers need to ensure that they follow the correct procedures to act fairly.
Summary dismissal
A summary dismissal is when you dismiss an employee immediately - without notice.
This is used in cases where an employee's behaviour is 'unacceptable' or illegal, like gross misconduct. After proper disciplinary investigations and hearings, the employer decides to dismiss them immediately.
Here are potential reasons for summary dismissal:
What is the UK law on dismissal?
Every employer must only dismiss an employee if they have a fair reason.
As mentioned, there are fair grounds for dismissal. But it's not as simple as ‘dismissing a fixed-term worker on a fixed-term contract’.
Dismissal law mainly comes under the Employment Right Act 1996. Thee act states dismissal is automatically unfair when it involves:
- Criminal offences.
- Breach of law or legal protection.
- Miscarriage of justice.
- Health and safety issues.
- Environmental damage.
- Deliberate concealment of information.
When protected disclosures are involved, employees may raise a claim for automatic unfair dismissal to the Employment Tribunal (ET).
If a tribunal judge finds evidence of an automatically unfair dismissal, you could end up paying expensive fines.
How to manage a fair dismissal procedure
A dismissal process can be tricky to get right. But without a valid reason, many employers let people go in a unfair way.
Let's look at ways to manage fair procedure for dismissal:
Start an investigation
The first step of a dismissal procedure is to start a disciplinary investigation. An employer should do this as soon as they’re aware of any misconduct or wrongdoing.
The investigation will discover what the allegation is and who's involved.
In rare cases, you might need to This might be due to a serious conflict of interest with other employees at work.
Hold a disciplinary hearing
The next step of the dismissal procedure is to hold a disciplinary hearing.
The hearing panel will look at all the evidence and witness statements brought forward. They’ll also question the employee about the findings.
An employer should invite the relevant employee to the hearing, through writing. The letter should say what the hearing will cover. And whether employees can bring moral support, like a colleague or trade union representative.
Pass the final decision
After the hearing, the employer will pass the final decision.
Their final decision doesn't always end with an immediate dismissal. They could decide to issue a demotion or alternative employment only in extreme cases).
Employees are entitled to appeal if they think it's an unfair dismissal. Whatever their reasons are, they can raise them to the Employment Tribunal.
Offer a written statement
The last step the employer should do is offer a written statement. This is usually a letter, explaining the reasons for dismissal.
For example, a 'dismissal letter' could include:
- What the allegation is (like, gross misconduct).
- Why they've been dismissed.
- What employment rights still apply (like maternity leave and adoption leave).
- What the appeal process is.
Is an employee entitled to a notice period when they’re being dismissed?
An employee doesn’t lose their notice period rights if they’ve been dismissed from their job.
You need to give them at least the notice written in their contract. This is known as a ‘contractual notice period’.
If you don’t have one, offer the statutory minimum notice period. The length will depend on how long the employee has worked for you.
You can only dismiss an employee immediately – without notice – in limited circumstances. But this will only be seen as a fair reason in court.
Get expert advice on dismissal with Peninsula
When it comes to dismissal procedures, every employer must be fair and reasonable.
You need to follow the correct steps and employment laws. Doing so can help minimise the risk of you facing wrongful or unfair dismissal claims. If you ignore the rules, you could end up facing fines, rehiring employees, and business damage.
Peninsula offers expert advice on dismissal. Our HR team offers unlimited 24/7 HR employment advice which is available 365 days a year.
Want to find out more? Seek advice from one of our HR advisors. For further information, call our telephone number 0800 028 2420.
