Unfair dismissal
The question of fairness is at the heart of any employee dismissal in the United Kingdom.
An employee with continuous service of one year who began employment prior to 6 April 2012 is protected against unfair dismissal. Employees commencing new employment after that date must now wait for two years for the protection.
Fair reasons for dismissal
To defeat a claim for unfair dismissal, an employer must first show a potentially fair reason for the dismissal. There are five permissible and potentially fair reasons for dismissal:
Conduct - this can be a single act or a series of acts of misconduct. The employer does not need to prove that any particular employee perpetrated an act of misconduct, but needs only have a reasonable belief in the employee’s culpability.
Capability - employee lacks qualifications/capabilities to do their job. The relevant qualification or capability must relate to the work the employee was employed to do.
Redundancy - employee is no longer ‘needed’. The dismissal must be attributable to a reduction in the need for employees to carry out particular types of work (either generally or at a particular location), or to the shut down of a business or workplace in which an employee is employed.
Statutory Restrictions - continued employment would break the law. An example is an employee not having appropriate immigration clearance to work in the UK. The employer must show that the employee's continued employment would actually contravene a statutory restriction.
Some Other Substantial Reason - ‘catch all’ for dismissals not falling into the above categories. The employer must establish a reason for the dismissal which is of a kind that could justify the dismissal of an employee holding the job in question.
Within the “band of reasonable responses”
A dismissal for one of the above reasons will be fair provided the employer can also show that the decision to dismiss was within the “band of reasonable responses”, meaning that in the particular circumstances it acted reasonably in treating the reason as sufficient to dismiss.
For an employer to demonstrate reasonableness, it will be expected to have undertaken a fair procedure prior to the dismissal, including investigations, consultations, warnings and hearings, as appropriate.
Claims for unfair dismissal must normally be lodged with an employment tribunal within three months of the date of termination. Details of how to make and respond to a claim can be found on the Government’s Courts and Tribunals website at:
A successful claimant may seek re-instatement, re-engagement or compensation. However, orders for re-instatement and/or re-engagement are rare and compensation is the normal remedy.
Compensation
Compensation consists of two elements: a basic award and a compensatory award.
The
basic award is intended to compensate an employee for loss of job security and is calculated using the same formula that is used for calculating statutory redundancy payments, taking into account age, length of service and weekly pay, subject to a current maximum cap of £12,900.
The
compensatory award is determined by an employment tribunal. There is no statutory formula; rather the tribunal will award such amount as it considers just and equitable in all the circumstances, having regard to the loss sustained by the employee as a consequence of the dismissal (but only in so far as that loss is attributable to the employer’s action). Typically, this involves an assessment of how long the tribunal believes it will take the dismissed employee, using reasonable efforts, to secure new employment on broadly equivalent terms of remuneration. The compensatory award is subject to a current cap of £72,300.
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