Overview

Unfair dismissal is entirely different from wrongful dismissal, which is a long-established concept derived from contract law. Most of the provisions governing unfair dismissal are to be found in the Employment Rights Act 1996. Numerous other pieces of legislation cross-refer to unfair dismissal issues.

Some employees don’t qualify to bring unfair dismissal claims. To present a claim for unfair dismissal, an employee must:

  • have been dismissed
  • be an employee and not a worker
  • be employed for the requisite qualifying period*
  • commence the claim within three calendar months of dismissal
  • not be within the excluded categories (for example, the armed forces)
  • not be an employee shareholder – although few employees fall into this category, they will be unable to claim unfair dismissal.

*Except where the employee has been dismissed for an automatically unfair reason that does not require a qualifying period (see ‘What reasons for dismissal are automatically unfair and what does this mean?’).

Northern Ireland

Some key legislation, including the Employment Act 2008 and the Employment Tribunal (Constitution and Rules of Procedure) (Amendment) Regulations 2008, does not apply in Northern Ireland. Specific information is available from nibusinessinfo.co.uk.

Although all the categories below lead to an automatically unfair dismissal, it should be noted that the first set of examples do not require the period of continuity of employment to bring a claim, and the second set still requires the period of continuity of employment.

All employees who started employment on or after 6 April 2012 need two years’ continuous service before they can bring a claim.

Automatically unfair reasons for dismissal (where one year or two years’ continuity of employment is not required):

Automatically unfair reasons for dismissal (where one year or two years’ continuity of employment is still required):

If a dismissal is for one of any of the reasons under both of the above headings, it will be unfair. It is not necessary to consider if the employer acted fairly in all the circumstances. The presence of the automatically unfair reason on its own is sufficient for a finding of unfair dismissal.

A dismissal for ‘some other substantial reason’ (SOSR) is often referred to as the ‘catch all’ category. There is no definition of what constitutes a substantial other business reason: It will be a matter of fact in each case. This potentially fair reason for dismissal can also be hard to establish. The following are some examples from case law of reasons that may fall under this category:

  • business reorganisation (changes to terms and conditions)
  • where the employee was taken on, for example, for short-term cover and that was known from the outset
  • the employee receives a prison sentence
  • break down in trust and confidence
  • personality clashes
  • third-party pressure, for example from a large client (as long as for non-discriminatory reasons).

An example of third-party pressure would be where an employee works on projects for one of the employer’s largest clients at the client’s place of work. If the client requested that the employee be removed from the project for a valid reason, and there are no other vacant posts, the employee could be dismissed with notice for a SOSR.

It is anticipated that SOSR may be used to justify the dismissal of older employees who do not appear to intend retiring voluntarily.

Constructive dismissal arises when an employee alleges that they felt forced into resigning by the employer’s words or actions. Technically, a constructive dismissal is where an employee terminates their employment contract, either with or without notice, in circumstances in which they are entitled to terminate the contract without notice.

If an employee just refers to ‘constructive dismissal’ they are technically incorrect but the tribunal will accept the application. What the employee means is that they are claiming constructive unfair dismissal. They may be claiming wrongful dismissal as well, usually where they have received no notice payment (or an inadequate notice payment).

To prove a constructive unfair dismissal, an employee must demonstrate that:

  • the employer has breached the contract and
  • this is a significant or fundamental breach of contract and
  • they terminated their employment in response to that breach and did not delay resigning.

In certain circumstances where there has been a delay in resigning after the breach, a tribunal might conclude that they have affirmed the breach and the claim will fail. An employee must still qualify to bring the claim in order to claim constructive unfair dismissal.

A good example of a case in which an employment tribunal found that an employee's resignation was not in response to the employer’s breach of contract is Thomas v The Arts Council of Wales (unreported, ET/1604301/08 17 June 2009, ET). The employee had asked to work part-time after her period of maternity leave. The employer refused, requiring full time hours and failed to properly deal with her application to work part-time. The way the matter was handled was a fundamental breach of contract, breaking the implied term of trust and confidence. However, the tribunal was not satisfied that this breach was the reason for her resignation. The employee failed to show that she had been constructively unfairly dismissed. (However, the employee won her claim of unlawful indirect sex discrimination).

Employers will also have to show that they followed their own procedures and the Acas Code of practice on disciplinary and grievance procedures. Go to our Discipline and grievance procedures Q&As

Employees who decide to leave in response to an employer's breach have to attempt Acas early conciliation before they can present a tribunal claim in most cases. For further information on early conciliation see the Q&A What is Acas early conciliation? in our Tribunal claims, settlement and compromise Q&As.

For information on unfair dismissal in Northern Ireland see the Legislation overview.

There are five potentially fair reasons for dismissal which are contained within section 98 of the Employment Rights Act 1996 as amended. They are:

  • capability
  • conduct
  • redundancy
  • statutory illegality
  • 'some other substantial reason' (SOSR)

In each case dismissals are only fair if the employer acted reasonably in dismissing the employee for that reason, this includes following an appropriate procedure prior to dismissal.

Remember that retirement is not a fair reason to dismiss for unfair dismissal purposes. For information on how retirement dismissals work see the related Q&A Can older employees claim unfair dismissal?.

The employer has the burden of showing a potentially fair reason for dismissal. The employee does not have to prove that the alleged reason is not true. An employee can suggest a different reason for their dismissal, but they do not have to prove that was the reason to win their claim (see Kutzel v Roche Products Ltd, (unreported [2008] EWCA Civ 380, CA).

This is not a statutory requirement but, given that capability and conduct are two separate potentially fair reasons for dismissal, it is not uncommon for organisations to have separate procedures for capability management and disciplinary matters relating to the conduct of an employee. This is because there is an element of culpability with respect to conduct issues, whereas with capability issues it is more likely to be something innate about which the employee can do nothing. Such a process may be followed if the need arises to dismiss an older employee whose performance has deteriorated but who refuses to retire voluntarily.

Once a dismissal has taken place, it is the employer who is required to show that poor work performance is the reason for the dismissal and that he reasonably believed the employee was incompetent. It will be necessary to produce evidence of the employee's failings and the steps or measures that were taken to try to bring performance to the standards required within agreed timescales.

See also the related Q&A Can an employer dismiss an employee for incapability?.

Numerous issues can arise concerning dismissals and resignations. These usually concern the date when the termination of the agreement actually takes effect, or whether there was any ambiguity in the words used, especially if they were spoken in the heat of the moment.

Employers can dismiss verbally or in writing. Similarly employees can hand in their notice verbally or in writing. It is usually advisable to dismiss, or resign, in written form. Either party may be in breach of contract if they provide verbal notice when the employment contract says notice should be given in writing.

Ascertaining the date on which a dismissal or resignation takes effect is crucial to the calculation of the time limits for commencing a claim of unfair dismissal.

Dismissals

A dismissal takes effect when either:

  • it is communicated to an employee, or
  • the employee has had a reasonable opportunity of discovering that they have been dismissed.

The following summarises the basic position in relation to different methods of dismissal:

Dismissal method: Verbally in a meeting
Date dismissal usually takes effect: That day
Comments: The employer should immediately confirm the dismissal in writing as well.

Dismissal method: In a letter or an email
Date dismissal usually takes effect: When the letter or email is read
Comments: Remember the date of dismissal is not the date the letter was sent or received. However if the employee deliberately avoids reading the dismissal letter the position is different.

Dismissal method: In a letter or email but the employee deliberately avoids reading it.
Date dismissal usually takes effect: When the employee first had a reasonable opportunity to learn that he or she had been dismissed.
Comments: See Gisada Cyf case below

Dismissal method: Communication of dismissal through a third party such as a solicitor reading a letter.
Date dismissal usually takes effect: The date that the solicitor tells the employee.
Comments: See Robinson case below

Disputes frequently occur over the effective date of dismissal. If there has been a disciplinary process leading to a final disciplinary meeting the employer should review the facts after the meeting, reach a decision and write a carefully worded dismissal letter. It is better not to give the decision at the end of the disciplinary meeting. However relying on the post may mean the date of dismissal is ambiguous.

The following cases illustrate the issues which can arise, including ascertaining the timing of the actual dismissal, and the problems surrounding the nature of the words used.

In Dalitis (trading as Shanklin Motor Company) v Plissi (unreported, UKEAT/0313/08, EAT) an employer argued with his employee. The employee's husband who was also an employee, became involved in the argument and claimed that the employer had said to him 'Get out, leave and don't come back'. The employer’s version was that he said 'Get out, this argument has got nothing to do with you'. The husband did walk out and did not return and eventually claimed unfair dismissal.

The Employment Appeal Tribunal said that the employment tribunal had to consider the matter again and decide which version they believed. It set out the following guidance concerning words used in the heat of the moment:

  • The relevant test is not governed by the intention of the speaker of the relevant words.
  • If the words are unambiguous then they must be given effect to by the tribunal.
  • If the words are ambiguous, then the tribunal must look at all the surrounding circumstances and decide, objectively, what the words would have meant to a reasonable listener.

In Gisda Cyf v Barrett (unreported, [2010] UKSC 41, SC) a dismissal letter was just sent through the post to the employee, albeit by recorded delivery. The employee was away from home when the letter arrived and another family member accepted delivery of the letter on 30 November. The employee returned home on 3 December and found out about the letter the following day. Her former employer claimed that her subsequent application to the employment tribunal was out of time, as it was just over three months from the date the letter had arrived at her home.

The matter eventually reached the Supreme Court (SC) which decided that the date on which the dismissal took effect was 4 December - the date when the employee first learned of her dismissal. She had not had a reasonable opportunity to learn of it before then. The SC explained that if it were proven that she had been staying away from home to deliberately avoid learning of the dismissal, then the dismissal could have taken effect on the day when the letter arrived, but that was not the case as she had simply been away from home visiting a relative for the weekend.

In Robinson v Bowskill and others practising as Fairhill Medical Practice) (unreported, UKEAT/0313/12 21 January 2013, EAT) the claimant did not attend a disciplinary hearing and due to illness was communicating with her employer through a solicitor. The employer emailed the solicitor on 6 July to say that the claimant was to be summarily dismissed. The solicitor told the claimant about the decision on 7 July and the claimant read the dismissal letter on 8 July.

The Employment Tribunal and the Employment Appeal Tribunal agreed that the dismissal took place on the 7 July when the solicitor communicated to the claimant that she had been dismissed.

Employers could, where possible, email dismissal letters (requesting a read receipt) and hand deliver the dismissal letter to the employee. Letters can be sent by special delivery requiring a signature on receipt, so that the signature can be checked against any copy of the employee's signature.

Resignation

It is always good practice for an employer to accept a resignation of an employee they are relieved to lose. The general principle is that once resignation has been tendered and accepted, it can only be withdrawn with the employer's consent. However, this could give rise to a claim for unfair dismissal or breach of mutual trust and confidence.

Issues can arise if it is not clear whether a resignation is intended or if words are hastily withdrawn. In Southern v Franks Charlesly [1981] IRLR 278, CA the Court of Appeal considered words such as 'I am resigning' were unambiguous.

Where the words used are more ambiguous, it is necessary to assess how a reasonable employer would have understood the words used in the circumstances of the case. If it is not clear what the employee actually meant, then this could not safely be interpreted as a resignation. Even if the employee had indicated that they did not intend to return, the circumstances in which such words were uttered must be taken into account and it would be appropriate to have a cooling off period.

It can be risky for an employer to simply accept what appears to be a resignation in the heat of the moment without further consideration - see the case of Kwik-Fit (GB) Ltd v Lineham (unreported, EAT case number 250/91).

In circumstances such as the above, when the employee appears to say they have had enough but then return to work, further investigation will be necessary as the employee may still face disciplinary action for leaving work without permission or rude abusive behaviour, depending on the circumstances.

The following cases also help illustrate issues surrounding heat of the moment resignation.

In Ali v Birmingham City Council (unreported, UKEAT/0313/08 25 April 2007, EAT) an employee tendered his resignation. The employer gave him 30 minutes 'cooling off time' to reconsider, but he still tendered his resignation. Four days later he tried to withdraw his resignation, claiming he had been stressed and was not thinking straight. The Council refused to let him withdraw it. He claimed unfair dismissal arguing that he had resigned 'in the heat of the moment' and that the Council could not rely on his clear words. The Employment Appeal Tribunal said this was not a 'heat of the moment' resignation.

Where clear and unambiguous words have been used, a tribunal should only decide there was no resignation in very exceptional circumstances. Here the resignation was clear and unambiguous.

In Secretary of State for Justice v Hibbert (unreported, UKEAT/0289/13 30 July 2013, EAT) an employee wrote to her employer on 29 June saying: 'I am of the view that there has been a fundamental breach of my employment contract by my employer and have no alternative but to resign my position'. The employer offered time for her to reconsider that decision. The employer later wrote accepting the employee's resignation, requiring her to provide four weeks' notice, and indicating that her last day of work would be 27 July. The employee subsequently brought an unfair dismissal claim. If the effective date of termination was on 29 June the claim was made too late; if the termination date was 27 July 2012 the claim was in time.

The Employment Appeal Tribunal said that the words used by the employee were clear and unambiguous. The decision was not a heat of the moment one and the letter was even written following legal advice. The employee resigned on 29 June and the claim was therefore lodged out of time.

The approach and procedure leading up to dismissal will vary depending on the reason for the dismissal.

At the very least in order to follow a fair procedure prior to dismissal an employer will have regard to the following:

To minimise the risk of a claim these procedures should always be followed.

The role of HR

In the process leading to dismissal HR should limit its advice to legal issues, the correct procedure and appropriate sanctions to ensure consistency with previous decisions. If HR acts in an advisory role and starts prompting the disciplinary manager as to the appropriate decision then there may be an improper influence on the proceedings.

The recent decision Ramphal v Department for Transport (unreported, UKEAT/0352/14 4 September, 2015, EAT) provoked a lot of interest as the HR department were found to have gone too far in inappropriately influencing an inexperienced manager’s decision to dismiss. For more information on the case see the Q&A Should a disciplinary decision be made by an employee’s manager, a more senior manager or by HR? in our Discipline and grievance procedures Q&As.

For more information on unfair dismissal in Northern Ireland see the related Q&A What legislation governs unfair dismissal?.

For information on the dismissal of older employees see the related Q&A Can older employees claim unfair dismissal?.

No. Where an employer fails to serve notice, or insufficient statutory notice, the period of employment will be extended by the statutory minimum. This means that the employee will still qualify to claim if they would otherwise have been up to one week short of the requisite qualifying period. Only the statutory minimum period of notice applicable to that employee can be added on. The effective date of termination (EDT) will then be the expiry of the statutory minimum period of notice.

In the case of employees dismissed in the week before their one year (or two years) continuity* has accrued, their EDT will be one week after the date on which they were dismissed. This means that employees dismissed one week before their qualifying period is up will be treated as having the relevant service required to pursue a claim for unfair dismissal.

For example a company employed a female employee on 1 July 2010. On 24 June 2011 they dismissed her with no notice. She is therefore just short of the one year qualifying period to bring an unfair dismissal claim. She could therefore have added on the one week’s statutory minimum notice to ensure that she qualified to pursue her claim for unfair dismissal.

Employers who are concerned about an employee's performance should therefore have procedures in place to ensure that the position is reviewed well in advance of the one year or two years period.

(See Sections 86 and 97(2) of the Employment Rights Act 1996)

Although the statutory minimum period of notice can be added on to ensure that the employee qualifies, the contractual period cannot. Where an employee is dismissed without receiving the proper contractual notice, they will also have a claim for wrongful dismissal or breach of contract. There is no qualifying service period for bringing a claim for wrongful dismissal.

More information on wrongful dismissal is available in our Wrongful dismissal Q&As.

*Note: For information on the unfair dismissal qualifying period see the related Q&A What is the qualifying service period for claiming unfair dismissal?.

Section 98 (3)(a) of the Employment Rights Act 1996 states that 'capability in relation to an employee means his capability assessed by reference to his skill, aptitude, health or any other physical or mental quality..'.

Generally, this falls into three categories:

  • Qualifications - defined as 'any degree, diploma or other academic, technical or professional qualification relevant to the position' held by the employee
  • Incompetence or poor performance - occurs where, usually through no fault of their own, the employee is simply incapable of delivering work to the required standard. For example, a person who works in a dog kennels who frequently forgets to lock the kennels and feed the animals. (Obviously, great care must be taken to ensure that the incompetence is not related to a disability - see our Disability discrimination Q&As.)
  • Illness - for example, where an employee's illness makes it impossible for them to perform their duties.

It is for the employer to show that it reasonably believed in the employee's lack of capability after making reasonable enquiry. A fair procedure, aimed at highlighting poor performance and giving the employee the opportunity to improve their performance, is usually invoked prior to dismissing an employee for capability. Such a procedure may form part of a disciplinary procedure or a separate capability process.

In all cases, the organisation's own procedures should be followed and Acas Code of practice on disciplinary and grievance procedures should be followed as well. In longer illnesses there may be an overlap with disability discrimination, so employers should take great care. See also the related Q&A Is it necessary to have a separate capability management procedure rather than use the disciplinary procedure for dismissal?.

Guidance on capability dismissals is also available on the GOV.UK website

For more detailed information on the procedure to use in cases of dismissal following ill health, see our Absence procedures Q&As and Disability discrimination Q&As and for information on discipline and grievance procedures see our Discipline and grievance procedures Q&As.

For information for the situation in Northern Ireland see the related Q&A What legislation governs unfair dismissal?

Personality clashes are a very common problem which employers have to often deal with. An employee’s personality can be a potentially fair reason for dismissal. However the behaviour will have to constitute one of the potentially fair reasons for dismissal. Personality conflicts may be classed as 'conduct' or may amount to 'some other substantial reason' (SOSR).

For further information about SOSR see the related Q&A What is 'some other substantial reason' for dismissal?

Personality clashes in the workplace must not be left unchecked, subtle signs may signify a problem for example fewer people volunteering to take on new tasks, or reduced employee input at team meetings. A fall in the frequency of social events being organised may also be a sign of imminent problems. Employers should try to be proactive about spotting signs of conflict.

Case law

The case of Perkin v St George’s Healthcare NHS Trust [2005] IRLR 934 is possibly the leading case on dismissals of employees with personality clashes. A senior finance director in an NHS Trust was dismissed for his role in a breakdown in relationships with staff and senior managers (he had made attacks on colleagues’ honesty, financial integrity etc and his colleagues found him intimidating). The issue was whether his dismissal should have been for conduct, or when an employee's personality causes conduct that affects their employment, it should be for 'some other substantial reason'.

The Court of Appeal (CA) decided that personality on its own should not justify dismissal, but if personality resulted in conduct that affected work, a dismissal may be justified. The CA thought this would be more appropriately categorised as some other substantial reason for dismissal under the Employment Rights Act 1996, rather than a 'conduct' dismissal. The test in British Home Stores v Burchell (1978 IRLR 379, EAT) was not restricted to misconduct, but could also be used to see if there was some other substantial reason for dismissal. Although the dismissal was procedurally unfair, the director's unfounded accusations against colleagues justified the reduction of his compensation to zero.

It may not be necessary to dismiss both employees if one improves, but the other does not. In Mealing v Edmonds t/a The Gatehouse Diner (unreported, ET/2701810/11, ET) two colleagues who had been friends fell out so badly that they ceased to speak to each other. At one stage the claimant sent the other employee a number of nasty text messages which included calling the other lazy, two faced, and numerous swear words, followed by the word bitch and 'I'm not going to speak to you, why should I anyway'.

Disciplinary action was initiated against both employees with the employer asking them to maintain a professional working relationship, regardless of their personal issues. The claimant stated that she would only think about speaking the other employee, whilst the other employee was willing to speak to the claimant. After the meeting the other employee’s behaviour improved, but the claimant’s behaviour did not. She was then dismissed after further warnings because of her ongoing behaviour towards her colleague.

The employment tribunal held that the employer’s procedure was flawed and so there was an unfair dismissal, but only because of the procedural mistakes such as failure to allow an appeal. However the claimant’s behaviour was so bad that she should not receive any compensation. On these facts there was a potentially fair reason for dismissing the claimant, namely conduct. The employer had a genuine belief, based on reasonable grounds, after a reasonable investigation, that the claimant had committed misconduct. The dismissal was within the band of reasonable responses because all working environments required goodwill and co-operation between those who worked there. The claimant’s arguments on disparity of treatment were not successful as it was found that one employee had modified her behaviour whilst the claimant had not. The employment tribunal awarded no compensation as the claimant would have continued to behave inappropriately towards the other employee and would have been fairly dismissed if correct procedures had been followed.

Other cases involving personality clashes may be age or race related and can gave claims for compensation for age or race discrimination for example. This gives employers another motivation to act at an early stage and avoid expensive discrimination claims from gathering momentum.

Problems related to abuse of the internet are the single most common reason employers attempt to dismiss. Some uses of the Internet will constitute a fair reason to dismiss and some will not. Whatever the conduct which has taken place concerning the use of the Internet or some form of social media, it must be dealt with fairly.

Misuse of the Internet and social media by workers costs the UK economy billions of pounds every year. The use of Facebook and similar sites, smart phones, twitter and various blog sites do now present employers with a wide range of problems.

At the very least employers must:

  • Adopt a policy on use of the Internet at work, including use of social media and social networking.
  • Consider using appropriate electronic controls to prevent problems arising on work IT systems.
  • Treat electronic misconduct in the same way as non-electronic misconduct.
  • Include social networking etc in the discipline and grievance policy with clear examples of what will be regarded as gross misconduct.
  • Consider using a separate social media policy with details of what is not permitted outside of work as well during working hours.
  • Consider making explicit reference to Facebook privacy settings and warnings about onward transmission of social media comments in any social media policy.
  • Communicate all policies to employees and enforce the policies properly and consistently.

For example, downloading pornography at work can fall into the category of 'conduct' and can be a potentially fair reason to dismiss an employee. Extreme repeated examples of derogatory or offensive comments posted on the Internet about the employer or a work colleague may also constitute ‘conduct’. Any dismissals must always be handled fairly in all the circumstances including following the organisation's own procedures and the Acas Code of practice on disciplinary and grievance procedures. For more information on discipline and grievance see our Discipline and grievance procedures Q&As.

Many of the Internet issues that create conflict and lead to disciplinary and grievance problems at work can often be dealt with by direct communication before the problem escalates.

If there is no express provision in the employee’s contract covering use of the Internet, then the employer will have to address how serious the offence was. An employer who wishes to dismisses immediately may argue there has been a breach of the implied term of trust and confidence. It is infinitely preferable to have an Internet and communications policy and a term in the employee’s contract which for example defines accessing inappropriate images at work as gross misconduct. The policy should state that such an offence justifies summary dismissal, that is, dismissal without notice. Although it would still be necessary to go through the appropriate procedures before dismissing, an employer is in a much stronger position if they can show that unacceptable use of the Internet was defined from the outset. The guidance accompanying the Acas Code of practice on disciplinary and grievance procedures emphasises that examples of gross misconduct might include deliberately accessing internet sites containing pornographic, offensive or obscene material.

Even employers with a policy in place must take care to police it and enforce it consistently before dismissing, otherwise they may be found to have unfairly dismissed. For example, if an employer dismisses two out of three employees frequently accessing Facebook on their computers but allows the third to remain in employment that may be grounds for an unfair dismissal claim from the two dismissed employees.

Case law examples

Stephens v Halfords plc (unreported, ET/1700796/10, ET) - a dismissal which was not within the band of reasonable responses arose in this case. The employer disciplined and then dismissed a deputy manager who had put negative comments about the employer on Facebook. The employee had created a Facebook page entitled ’Halfords workers against working 3 out of 4 weekends’. The employee subsequently came across the employer’s policy on social networking sites which clearly specified that employees who made negative public statements about the employer would be disciplined. He immediately removed the Facebook page, but the employer already knew the details and began disciplinary proceedings against the employee. At the disciplinary hearing, the employee apologised and also explained that his judgement may have been clouded as he had been off sick. Despite this, he was summarily dismissed and after an unsuccessful appeal he claimed unfair dismissal. He won as the summary dismissal was not within the band of reasonable responses; no other reasonable employer would have chosen to dismiss in such circumstances. He had a clean disciplinary record and had removed the web page promptly. He was awarded £11,350 in compensation.

Preece v JD Wetherspoons plc (unreported, ET/2104806/10, ET) - by contrast in this case a dismissal was within the band of reasonable responses open to the employer when it dismissed a shift manager who posted comments about two customers on Facebook. She had previously signed up to the employer’s formal email and social media policy which clearly stated that disciplinary action could be taken if any comments on Twitter or Facebook were found to lower the reputation of the organisation, staff or customers.

Gosden v Lifeline Project Ltd (unreported, ET/2802731/09, ET) - an email containing offensive comments, accompanied by images of naked women, which was sent from a home computer to a work colleague’s home computer, can amount to gross misconduct. An employee who had done this lost claims of unfair and wrongful dismissal against his former employers. The email was capable of damaging the employer’s reputation. It also breached the employer’s own internal policies and the employee clearly intended the email to be sent on.

Moonsar v Fiveways Express Transport Ltd EAT [2005] IRLR 9 - downloading pornographic material may also be regarded as degrading or offensive to another employee and may therefore amount to sex discrimination. In this case the downloading of pornographic images by male employees amounted to sex discrimination against a female employee who was present in the same room even though the images were not directed at her and she had not complained at the time.

The British Waterways Board, Trading as Scottish Canals v Smith (unreported, UKEATS/0004/15 3 August 2015, EAT) - a waterways operative was dismissed after making boasting comments on social media that he had been drinking alcohol while performing his duties which carried responsibilities for emergency situations. He was also extremely rude about his managers. The employee thought he had set his Facebook settings so that his page wasn’t open to the public, but he hadn't. He was dismissed and claimed unfair dismissal. The Employment Appeal Tribunal held that the decision to dismiss fell within the band of reasonable responses open to an employer and the dismissal was fair.

All employers must carry out a full and thorough investigation into the circumstances surrounding a misconduct case, including those which may defend the employee.

Reasonable investigation

The employer only has to carry out as much investigation into the matter as is reasonable in the circumstances. It may sometimes be reasonable for the employer not to have investigated some aspects of the conduct, for example if there were a lot of repeated incidents and it would not be feasible to investigate them all.

The leading case of British Home Stores Ltd v Burchell [1980] ICR 303 provides a three part test for use in misconduct cases. The aspect of the test which relates to investigation states that the investigation must be thorough and look at all the circumstances including those which may clear the employee of blame.

Whether a dismissal is within the band of reasonable responses an employer can take will be assessed on the knowledge of the person making the decision after their reasonable investigation and not on the knowledge of any other employees.

Good conduct

Employers should take employee’s previous good record into account before proceeding to dismiss. In cases where employees have an exemplary record in the past,

Case law - reasonable investigation

For the investigating manager to make a reasonable decision to dismiss, that manager should normally have investigated by asking appropriate questions of other managers and employees with knowledge of the conduct. If the investigation was reasonable but did not reveal a fact known to another manager, the employer is not deemed to have that knowledge when assessing whether dismissal was appropriate. A dismissal will therefore be fair if the decision was reasonable on the facts known to the decision maker - see Orr v Milton Keynes Council (unreported, [2011] EWCA Civ 62, CA).

The investigation as a whole should be looked at when assessing the question of reasonableness. InShrestha v Genesis Housing Association Ltd [2015] EWCA Civ 94, CA) a the claimant, a housing support worker, travelled by car to see clients in their homes. His expenses claims were audited for a three month period and revealed excessive mileage. For example the total claim for one month was for 197 miles, whereas the AA figures for the same distance journeys was 99 miles.

The claimant asserted that his high mileage was due to difficulty in parking, diversions, one way road systems and road closures etc.

The employer investigated, but did not analyse each of the purported reasons for the additional mileage or give the claimant the opportunity to explain away each and every journey. This was because the employer concluded that it was not plausible that there was a legitimate explanation for each and every journey as all journeys were above the AA suggested mileage. The employer concluded that gross misconduct had occurred and the claimant was dismissed.

The case eventually reached the Court of Appeal (CA) which held that the employer's investigation was reasonable and there was no unfair dismissal. The CA said that each line of defence put forward by the claimant did not have to be investigated, as this is too narrow an approach and would be an unwanted addition to the Burchell test. The investigation as a whole had to be reasonable.

Case law – previous good conduct

If an employee with a previous flawless employment record is dismissed for a single minor act of misconduct the employer risks a finding of unfair dismissal. For example in Stott v Next Retail Ltd (unreported, ET/2100960/11, ET) the employer was found to have unfairly dismissed an employee for refusing to work on Christmas Eve. The employee concerned had a pre-booked party which she had paid for some two months previously. She had not been properly warned that she was at serious risk of dismissal if she did not come to work on Christmas Eve and a more proportionate way of dealing with the issue would have been to issue a final written warning, especially given her previous good conduct.

For further details of this case and issues surrounding unauthorised absences see the Q&A How should an employer treat short-term absence? in our Managing absence Q&As.

One of the potentially fair reasons for a dismissal arises in circumstances where an employee could not continue to work in the position held without contravention of a statutory enactment.

The main example of this type of dismissal is where an employee has been banned from driving. If the dismissal is for contravention of a statutory enactment (or 'some other substantial reason' - SOSR), the employer will need to demonstrate that consideration has been given to any adjustments to the role or other suitable vacant positions prior to taking the decision to dismiss. For example, it is necessary for an employer to consider how essential driving is to the work carried out by that employee. It is also necessary for an employer to follow a fair process before deciding to dismiss that employee. For example, the employer should:

  • consult with the employee
  • consider any alternative to dismissal, such as any opportunities to re-deploy the employee
  • consider the length of the ban
  • take into account the size and administrative resources of an employer
  • assess the impact the ban has on the employee's ability to perform their role
  • consider any adjustments which can be made to the role, for example, would the employee be prepared to use taxi or public transport at their own cost if appropriate?

It may also be possible in such cases to dismiss for SOSR provided a fair process has been carried out.

An example from case law is Appleyard v FM Smith (Hull) [1972] IRLR 19, EAT. In this case a maintenance fitter lost his driving licence. It was a requirement of the job that he held a current driving licence. Mr Appleyard was required to carry tools and spare parts in his vehicle and therefore it was impractical for him to use public transport. The employer looked at:

  • the possibility of re-organising the work so that he was based at the depot
  • the possibility that he could get lifts from other employees
  • the size of the team
  • the length of the ban - he lost his driving licence for 12 months

As it was a small team none of the suggestions was practicable. Mr Appleyard was dismissed and this was held to be a fair dismissal in the circumstances.

Yes, since 1 October 2006 employees over 65 have been able to claim unfair dismissal as a result of the Employment Equality (Age) Regulations 2006 (SI 2006/1031). Such employees may have age discrimination claims as well.

The rights of older employees have been strengthened even further as there is now no default retirement age (DRA) in the UK and the statutory retirement procedures have been abolished. Retirement of an employee simply because of their age is no longer a fair reason to dismiss them. In theory an employee who wishes to, and has no deterioration in their performance, has a right to remain in their job until their death.

In order to avoid an unfair dismissal claim from an older employee, the employer will have to justify their dismissal.

Following the abolition of the DRA employers have to manage older employees in exactly the same way as other employees. If they are not performing as the employer would like, the employer will have to show:

  • a fair reason to dismiss
  • a fair process followed
  • compliance with the Acas Code of practice on disciplinary and grievance procedures and the employer’s own procedures and
  • that the decision to dismiss is objectively justifiable.

For more information on what employers can do, see the Q&As on retirement in our Age discrimination and retirement Q&As.

Yes. Some employers may not remember that non-renewal of a fixed-term contract can constitute a 'dismissal' for unfair dismissal purposes. If the employer decides not to renew the contract without any further process the employee on the fixed-term contract can claim unfair dismissal when dismissed at the expiry of the fixed-term.

For more information concerning the dismissal of fixed-term workers and the procedures which apply to them see our Fixed-term workers Q&As.

There will be two qualifying periods for claiming unfair dismissal. In summary:

  • Employees employed before 6 April 2012 require one year’s continuous service in order to be able to claim unfair dismissal (except in automatically unfair cases).
  • Employees who start employment on or after 6 April 2012 require continuous service for at least two years in order to be able to claim unfair dismissal (except in automatically unfair cases).

The increase in the qualifying period from one year to two years continuity of employment brought in under the Unfair Dismissal and Statement of Reasons for Dismissal (Variation of Qualifying Period) Order 2012 (SI 2012/989) was not made retrospectively; this means that all employees who joined an employer before 6 April 2012 remain subject to the one-year qualifying period. The changes apply to Great Britain.

For example:

  • An employee whose employment started before 6 April 2012 will remain subject to the one year qualifying period.
  • An employee who had 18 months continuous employment on 6 April 2012 had the requisite qualifying period to claim unfair dismissal.
  • An employee who only had accrued 11 months service on 6 April 2012 would only have to wait one month before they have the right to claim unfair dismissal.

There are a number of exceptions to the one year (or two years) qualifying period. If the dismissal was for one of the automatically unfair reasons for dismissal referred under the first heading in the related Q&A What reasons for dismissal are automatically unfair and what does this mean?, unfair dismissal claims could still be made in less than one year (or two years) in cases involving whistleblowing, health and safety representatives, maternity and trade union related dismissals etc. In addition, all discrimination claims will continue to have no qualifying period. For example, an employee who has been employed for even two weeks could bring a claim if the dismissal is for a maternity related reason.

The length of service needed to qualify for unfair dismissal rights has already been changed from time to time. It was six months in 1971, one year in 1980, two years in 1985 and one year in June 1999.

The qualifying period that applies to the right to receive a written statement of reasons for dismissal, on request, was also increased from one year to two years for employees who started employment on or after 6 April 2012.

The above changes currently apply to Great Britain.

A complaint for unfair dismissal should be submitted to an employment tribunal before the end of three months from the effective date of termination (EDT), unless there is a genuine reason why this was not reasonably practicable (section 111 of the Employment Rights Act 1996).

This three month time limit is extended to accommodate the early conciliation process which takes place in most tribunal cases from 6 April 2014. So the effect on time limits is that the conciliation period 'stops the clock' for lodging any tribunal claim.

Acas will attempt to conciliate for up to a month. This one month period can only be extended once by a conciliation officer for up to a maximum of 14 days, provided that both the parties consent. The conciliation officer must consider that there is a reasonable prospect of achieving a settlement before allowing the further 14 day extension.

The usual three month time limit will therefore not expire while Acas is attempting to conciliate.The employee will then have at least four weeks from the date the conciliation certificate is issued to lodge a claim, even if the limitation period would normally have expired before then.

A tribunal has limited discretion in considering applications which are later than the extended time limit and an employment tribunal must be persuaded that there was a genuine reason for the late application, for example that the applicant was seriously ill during the relevant time period. There is a wider discretion when considering applications in discrimination cases, but an extension of time would need to be just and equitable in all the circumstances.

As the extension to accommodate early conciliation is relatively new there are expected to be a few issues concerning the time limits whilst employers and employees adapt to early conciliation. For more information on time limits and possible extensions see the Q&A How does the employer check if the employee's claim in the employment tribunal is in time? in our Tribunal claims, settlement and compromise Q&As.

There are several avenues open to an employee who wishes to pursue a claim for unfair dismissal against their employer.

  1. Tribunals - Unfair dismissal claims are always made in employment tribunals and not the courts. The traditional route of making an application to the employment tribunal has therefore historically been the main route for employees to pursue. However tribunal claims including those for unfair dismissal are on the decrease.
  2. Conciliation - There is an early conciliation service offered by Acas which is now a stage employees must follow before bringing a employment tribunal claim (with effect from 6 April 2014).
  3. Arbitration - A few employees seek arbitration via Acas - see the related Q&A What is the role of Acas in an unfair dismissal claim?.
  4. Alternative dispute resolution (ADR) - The employee may agree with the employer to embark upon some means of alternative dispute resolution such as a private mediation.

Further information on:

  • the greater emphasis on early conciliation and
  • presenting tribunal claims

is available in our Tribunal claims, settlement and compromise Q&As.

Acas currently has a variety of roles in unfair dismissal claims:

  1. Conciliation - if a claim is commenced in an employment tribunal, Acas have a duty to conciliate in an attempt to reach an agreement between the parties, thereby settling the claim before it gets to a hearing. From 6 April 2014 early conciliation is compulsory for those wishing to bring an employment tribunal claim against any employer. If the Acas officer decides conciliation is not possible, or does not achieve settlement within one month (and possibly a further fortnight) they will issue a certificate and the claim proceeds as normal. The Acas officer receives copies of the tribunal claim forms automatically and makes contact with the parties to promote settlement.
  2. Prevention - Acas produces a number of codes of practice and the code of practice on disciplinary and grievance procedures sets out for employers and employees guidance on how disputes between them should be resolved. Tribunals are required to take note of the relevant provisions of the Acas code on disciplinary and grievance procedures and a significant departure from the code may lead to the compensation paid by the employer being increased by up to 25 per cent.
  3. Mediation - Acas also runs a mediation service which the parties can pay for if the dispute does not fall within the free early conciliation remit.
  4. Arbitration - as a complete alternative to the tribunal process Acas run a voluntary arbitration scheme. This provides an alternative, less formal, venue for unfair dismissal disputes. It also covers flexible working claims - see our Requesting flexible working Q&As for more details on this right.

The arbitration scheme has not proved popular historically and was generally considered to be more employee friendly.

For more information on the role of Acas in dispute resolution, including early conciliation, see the relevant Q&As in our Tribunals, settlement and compromise Q&As.

An employment tribunal will use a number of factors to determine whether a dismissal for misconduct is fair. An important factor is whether the employer and employee have followed the Acas code of practice on disciplinary and grievance procedures (Acas code).

Employment tribunals can increase the compensatory award for unfair dismissal by up to 25 per cent if the employer has failed to follow the Acas code. If it is the employee who has failed to comply, then their award may be reduced by 25 per cent. For more information on these changes and the role of the Acas code see our Discipline and grievance procedures Q&As.

In addition to the Acas code, there is also important guidance from case law.

To determine if a dismissal is fair in all the circumstances, an employment tribunal will consider the process used and the facts of the case. The leading case of British Home Stores Ltd v Burchell [1980] ICR 303provides some useful guidelines for use in misconduct cases by establishing a three part test:

  • the employer must establish a genuine belief that the employee has committed the act of misconduct in question
  • the belief must be based on reasonable grounds
  • the employer must have carried out a full and thorough investigation into the circumstances including those which may exculpate the employee.

In reviewing the facts, a tribunal will decide whether the employer's actions were reasonable and fell within the band of reasonable responses for the employer to take. It is not the role of the tribunal to substitute their own views as to what should have been done in the circumstances.

For confirmation of this mantra, that it is not for the employment tribunal to substitute its own view instead of that of the reasonable employer, see Turner v East Midlands Trains Ltd [2012] EWCA Civ 1470, CA in which the Court of Appeal gave welcome affirmation of the band of reasonable responses test for employers. The requirements of EU law' in particular Article 8 of the European Convention on Human Rights concerning the right to a private and family life, do not impose a more difficult test, even if an employee is dismissed for misconduct that might affect their reputation. It is always for the employer to investigate, then decide whether an employee has engaged in misconduct and then to decide how that misconduct affected the employment relationship.

Conduct which an employer did not act on

Employers must be careful to act upon conduct when they become aware of it because:

  • facts which the employer was initially unaware of, but are discovered after the dismissal has taken place, cannot be taken into account in assessing whether the dismissal was fair. The test is whether at the time of dismissal, the employer reasonably believed that there was good reason to dismiss the employee - Benveniste v Kingston University EAT (unreported, EAT/ 0176/08 11 August 2008, EAT). Of course subsequent discovery of misconduct which the employer did not know about at the time may affect the amount of the compensatory award
  • misconduct of which the employer was aware, but chose not to act upon cannot be used subsequently by the employer to justify a dismissal which has been triggered by further events - see Welsh v Cowdenbeath Football Club Ltd [2009] IRLR 362, CS.

It appears that whether a dismissal is within the band of reasonable responses will be assessed on the knowledge of the person making the decision after a reasonable investigation and not on the knowledge of other employees. If the investigation known to the manager making the decision to dismiss did not reveal a fact known to another manager, the employer is not deemed to have that knowledge when assessing whether dismissal was appropriate. A dismissal will therefore be fair if the decision was reasonable on the facts known to the decision maker - see Orr v Milton Keynes Council (unreported, [2011] EWCA Civ 62, CA).

For more information on how far the employer’s investigation has to go see the related Q&A In a misconduct case does the employer have to investigate every possible aspect before dismissing?

For information on Northern Ireland see the Legislation overview.

When an employment tribunal finds that a complaint for unfair dismissal is well founded, it will decide what remedy should be provided to the claimant. There are three possible remedies available in cases of unfair dismissal which are set out in sections 112-116 of the Employment Rights Act 1996:

  • Compensation (see the related Q&A What does compensation for unfair dismissal consist of?).
  • Re-instatement - the employee is then treated in all respects as if the dismissal did not take place. This means compensating the employee for loss of pay and benefits from the date of dismissal until the re-instatement takes effect.
  • Re-engagement - the employee is re-employed by the employer, but not necessarily to the same role or terms and conditions. Back pay in respect of salary and benefits will also be awarded where such an order is granted but the amount of pay will be based on the salary before dismissal and not the salary upon re-engagement.

In reality, orders for re-instatement or re-engagement are extremely rare. The employee will indicate on the originating application whether they wish the tribunal to consider an order for re-instatement or re-engagement.

The tribunal will need to consider carefully the practicalities of awarding an order for re-instatement or re-engagement including consideration of:

  • whether it is practicable for the employer to comply
  • whether it would be just to order reinstatement
  • the effect on the employer's business including the disruption that might be caused by re-introducing the employee into the workforce.
  • if the employers have taken on a replacement, the tribunal must disregard that fact unless:
  • it was necessary to take on the replacement
  • the employer had waited a reasonable time and had not heard from the employee that he or she was seeking reinstatement and that the only reasonable course was to take on a permanent replacement.
  • if the duty of mutual trust and confidence has been irreparably damaged
  1. A basic award to compensate for loss of job security. It is calculated in the same way as a redundancy payment (that is, on the basis of the employee’s age and years of service multiplied by a maximum weekly amount). A basic award cannot be awarded in addition to a redundancy payment.
  2. A compensatory award in addition to the basic award. This reflects immediate and future loss of earnings. A cap on the compensatory award was introduced on 29 July 2013 which is 12 months’ gross pay or a set amount, whichever is the lower.

However, in two situations where automatic unfair dismissal is argued, the compensation limit may be higher than the total statutory cap (basic award + compensatory award). These are dismissals:

  • on health and safety grounds
  • falling within the whistleblowing provisions of the Public Interest Disclosure Act 1998.

In these cases (as in discrimination cases) there is no cap on the compensation level a tribunal may award.

An additional award may be made where an order for reinstatement or re-engagement is made but not complied with, unless the employer can show that it was not practicable to comply. A tribunal may award from 26 weeks’ to 52 weeks’ pay.

For details, see Statutory rates and compensation limits.

The basic award calculation is:

[AGE FACTOR] x [COMPLETE YEARS SERVICE] x [WEEK’S PAY UP TO THE CURRENT MAXIMUM]

The employee’s age factor is:

  • One week’s pay for each year of employment between the ages of 22-41.
  • One and a half week’s pay: for each year of employment when the employee is 41 or over.
  • Half a week’s pay: for each year of employment below the age of 22

See Statutory rates and compensation limits for the current rates.

The compensatory award is designed to compensate the employee for loss of wages and benefits from the time of dismissal. The calculation deducts any new wages of the employee and includes loss of fringe benefits. The compensatory award takes into account:

The compensatory award is designed to compensate the employee for loss of wages and benefits from the time of dismissal. The calculation deducts any new wages of the employee and includes loss of fringe benefits. The compensatory award takes into account:

  • net loss suffered to the date of hearing
  • ‘future loss’ – the estimated loss after the hearing, taking into account issues such as the employee’s personal circumstances, the economy and local labour markets
  • loss of statutory rights
  • loss of pension rights.

Assessing pension loss can be complex. For example, an employee loses a final salary pension scheme, but then finds a new job with a less beneficial money purchase pension scheme. Is that ongoing loss included in the compensatory award? In Aegon UK Corporate Services Ltd v Roberts (2009) it was held that final salary pension loss should be treated in the same way as other financial losses, so cannot be awarded if a new job breaks the link between the dismissal and the financial loss.

As indicated, the compensatory award in an unfair dismissal case will deduct any wages derived by the employee from a new job, known as mitigation of loss. Whether a deduction takes place for mitigation becomes complicated when an employee is dismissed without notice. Such employees are:

  • not required to deduct wages they earn during what would have been the notice period in normal unfair dismissal cases (Norton Tool Co Ltd v Tewson NIRC 1972 ICR 50, NIRC)
  • required to give credit for sums they earn from other employment during what would have been the notice period in constructive unfair dismissal cases (Stuart Peters Ltd v Bell CA [2009] IRLR 941, CA)

A year’s pay is calculated by reference to the average pay that the employee earned in a specified period before the termination of their employment.

Although the compensatory award is normally calculated and capped by reference to net pay, the new pay-based element of the limit is calculated on the basis of their gross pay.

Increases or decreases to the award

Employment tribunals always consider whether the employer has followed its own procedures and the Acas code on disciplinary and grievance procedures. The tribunal may adjust any award by up to 25 per cent for unreasonable failure to comply with any provision of the Acas code. An unreasonable failure to follow the Acas code does not apply if the party seeking the increased award has failed to meet one of the Code’s requirements.

Case law

Some decided cases are useful in showing how the uplifts work.

In Cadogan Hotel Partners Ltd v Ozog (UKEAT/0001/14 15 May 2014) an employee won claims of sex discrimination and harassment. The employment tribunal awarded £10,000 for injury to feelings and originally increased the award by 25% to reflect the employer’s unreasonable failure to follow the Acas code of practice on disciplinary and grievance procedures when dealing with the employee’s oral grievances. However, the code specifies that employee grievances should be put in writing and this employee had not made any written grievances other than in the resignation letter (which did not meet the requirement for a written grievance). Therefore the Employment Appeal Tribunal upheld the employer’s appeal that the injury to feelings award was too high and the 25% uplift should not be applied because the employee had not complied with the Acas code.

The law relating to unfair dismissal is constantly evolving and and recent changes have included:

  • the introduction of tribunal fees
  • Acas early conciliation
  • a new cap on the compensatory award.

A possible effect of these changes has been a decline in the number of unfair dismissal (and other) claims.

The battle to revise or repeal tribunal fees is ongoing as there is a union-backed challenge which is currently being decided by the Supreme Court and a government review of the fees system. If the fees are reduced then this may see an increase in unfair dismissal claims once again.

For more information see our Tribunal claims, settlement and compromise Q&As.

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