Overview

Unfair dismissal is entirely different from wrongful dismissal (which deals with employment contract breaches, such as giving insufficient notice for a dismissal – see our wrongful dismissal Q&As). The provisions governing the right not to be unfairly dismissed come from statute and are mostly to be found in the Employment Rights Act 1996. Numerous other pieces of legislation cross-refer to unfair dismissal issues.

To avoid an unfair dismissal claim, the law requires that:

  • the employer has a fair reason to dismiss.
  • the decision to dismiss is fair in all the circumstances (this entails following a fair process).

Some employees don’t qualify to bring an unfair dismissal claim. 

To present a claim for unfair dismissal, you 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 unless an extension applies
  • not be within the excluded categories (for example, the armed forces).

* The qualifying periods do not apply, with some exceptions, where the employee has been dismissed for an automatically unfair reason (see below).

Northern Ireland


Some key legislation, including the Employment Act 2008 and the Employment Tribunal (Constitution and Rules of Procedure) (Amendment) Regulations 2008, do not apply in Northern Ireland (see our Factsheet Employment law: key differences between Northern Ireland and Great Britain).

Service qualification


There are two qualifying periods for claiming unfair dismissal:

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

The qualifying period for 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.

There are a number of other exceptions to the one/two year qualifying period in addition to dismissals for an automatically unfair reason. Examples include dismissals for whistleblowing, the dismissal of health and safety representatives, and maternity and trade union-related dismissals. In addition, all discrimination claims need no qualifying period. For example, an employee who has been employed for two weeks could bring a claim for unfair dismissal if the dismissal is for a maternity-related reason.

Automatically unfair dismissals generally do not require a service qualification.

If a dismissal is for any one of the reasons listed in this section, it will be unfair. It is not then 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.

One year or two years’ continuity of employment is not required if the dismissal is for one of the automatically unfair reasons listed below:

  • A reason connected with pregnancy, childbirth or taking or seeking to take leave for family reasons including maternity, paternity, shared parental, or adoption leave or pay.
  • Exercising the right to request flexible working.
  • Taking leave for family emergencies or to care for dependants.
  • Taking time off for jury service.
  • Performing certain health and safety activities.
  • Refusing Sunday working (retail and betting shop employees).
  • Exercising certain rights under the Working Time Regulations 1998.
  • Performing certain functions as a trustee of an occupational pension scheme.
  • Performing certain functions as an employee representative under the TUPE or the collective redundancies legislation.
  • Making a protected disclosure (whistleblowing).
  • Asserting one of the numerous statutory rights which, for example, include the right not to be unfairly dismissed, to receive a statutory redundancy payment, not to have unlawful deductions made from wages, and the rights conferred by the Working Time Regulations and TUPE.
  • Exercising the statutory right to be accompanied at disciplinary and grievance hearing.
  • Taking certain steps under the National Minimum Wage Act 1998.
  • Seeking to benefit from tax credits.
  • Performing functions in relation to transnational information and consultation legislation.
  • Reasons relating to the European Public Limited-Liability Company Regulations 2004.
  • Reasons relating to the Information and Consultation of Employees Regulations 2004.
  • Holding the status of a part-time worker.
  • Participating in protected industrial action lasting 12 weeks or less, or for more than 12 weeks if the employer has not taken reasonable procedural steps to resolve the dispute.
  • Performing certain functions in relation to trade union recognition.
  • Participation in trade union membership or activities (or refusal to participate in such membership or activities) .
  • Dismissal for exercising rights as a fixed term worker.
  • Dismissal for selection for redundancy for any of the reasons above.

One year or two years’ continuity of employment is still required for dismissals for one of the following automatically unfair reason:

  • Failure to offer re-engagement resulting from participation in protected industrial action.
  • For a transfer-related reason under TUPE (unless the dismissal was for an economic, technical or organisational reason entailing changes in the work force).
  • Because of a spent conviction.

A constructive unfair dismissal occurs where an employee terminates their employment contract, either with or without notice, in circumstances in which they are entitled to terminate it due to the employer’s breach of contract. In other words, where an employee felt forced into resigning because of the employer’s words, actions or inactions. An employee must still qualify to claim unfair dismissal in order to claim constructive unfair dismissal.

If an employee just refers to ‘constructive dismissal’ this is technically incomplete, but tribunals will accept the claim application. They may be claiming constructive 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
  • this is a significant or fundamental breach of contract
  • they terminated their employment in response to that breach and did not delay resigning.

Where there has been a delay in resigning after the breach, a tribunal might conclude the employee has accepted the breach and the claim will fail.

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 Arts Council of Wales, 2009). The employee had asked to work part time after maternity leave. The employer refused 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).

To defend a constructive unfair dismissal claim, employers must show they followed their own procedures and the Acas Code of Practice on disciplinary and grievance procedures .

Employees who decide to leave in response to an employer's breach must attempt Acas early conciliation before they can present a tribunal claim in most cases.

There are five potentially fair reasons for dismissal. They are:

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

Dismissals are only fair if the employer acted reasonably in dismissing the employee for one of these reasons and followed an appropriate procedure prior to dismissal.
Retirement is not a fair reason to dismiss.

The employer must show 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, 2008).

In determining whether any dismissal was fair or unfair, an employment tribunal considers:

  • Whether the employer acted reasonably in treating the potentially fair reason as a sufficient reason to dismiss. This includes considering the employer’s circumstances including the size and resources of the organisation.
  • The substantial merits of the case and principles of fairness.

A tribunal is required to establish what a range of reasonable responses to the situation would have been, not what its panel members would have done in the employer’s shoes. If the employer’s decision to dismiss fell within a range of reasonable responses, the dismissal will be fair.

One of the main potentially fair reasons to dismiss is because of the employee’s incapability. The employee’s capability is assessed ‘by reference to his or her skill, aptitude, health or any other physical or mental quality'.

Generally, dismissals for lack of capability fall into three categories:

  • Qualifications – defined as lacking any kind of '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.
  • Illness – for example, where an employee's long-term prognosis after a stroke makes it impossible for them to perform their duties. (Obviously, great care must be taken to ensure that the incapability is not related to a disability, especially in connection with longer illnesses, and that reasonable adjustments have been considered - see our Disability discrimination Q&As).

It is for the employer to show that it reasonably believed in the employee's lack of capability after making a reasonable enquiry. A fair procedure, aimed at highlighting poor performance and giving the employee the opportunity to improve their performance, should be followed prior to dismissing an employee for capability.

In all cases, the organisation's own procedures should be followed as well as the Acas Code of Practice on disciplinary and grievance procedures.

Procedure

It is not a statutory requirement to have a separate capability management procedure. However, because capability and conduct are two separate potentially fair reasons for dismissal, many organisations do have separate procedures for capability management and disciplinary matters relating to employees’ conduct. Other employers may not have a separate standalone policy but perhaps a specified section in the disciplinary procedure.

With conduct issues, there is an element of culpability. Capability issues are more likely to be about health or some innate incapability about which the employee can do nothing. The purpose of a capability procedure is to allow employers to deal with any concerns about the performance of its employees.  A capability process may be followed if an older employee needs to be dismissed or redeployed, due to deterioration in performance, but they refuse to retire voluntarily.

Although a disciplinary process may be used, a specific capability process may make an employer’s life easier. The employer should make clear what standard of performance it requires from its employees.

If seeking to dismiss for capability, the employer must be consistent in the way it manages the performance of employees who carry out the same or similar duties. Part of a capability process should include performance reviews and consideration of additional assistance. Training or support may be needed to help employees improve and maintain their performance to the required standards.

Other steps in a capability procedure may include similar stages to a disciplinary process such as informal resolution, investigation, meetings, warnings, dismissal, provision for companions and appeals. Obviously the contents of meetings would differ in substance.

The employer must show that poor work performance was the reason for the dismissal and that it reasonably believed the employee was incompetent. It will be necessary to produce evidence of the employee's failings and the steps or measures taken to try to bring performance to the standards required within agreed timescales.

It is potentially fair to dismiss an employee for a reason that relates to an employee’s conduct. Conduct is the most frequently relied upon potentially fair reason. 

More serious examples of misconduct include negligence, theft, fraud, physical violence or breach of health and safety regulations. These examples may also constitute gross misconduct which is misconduct that is so serious it justifies dismissal of an employee without notice (also known as summary dismissal). Other examples of misconduct include insubordination (disobeying reasonable instructions), repeated lateness, unauthorised absences from work or repeated poor attendance.

There may be a single act of gross misconduct or a series of acts of less serious misconduct. Generally, dismissals for misconduct will only be reasonable if the employee has committed previous acts of misconduct. If the conduct is an isolated incident it would have to be very serious to justify dismissal for a first offence.

Employers must, of course, follow a fair procedure, including being consistent with other employees and taking an employee’s previous good record into account before dismissal.

Reasonable investigation

All employers must carry out a full and thorough investigation into the circumstances surrounding a misconduct case, including those which may help defend the employee. 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, and then established how that misconduct affected the employment relationship.

If the investigation was reasonable but did not reveal a fact known to a manager other than the one carrying out the investigation, the organisation is not deemed to have that knowledge when assessing whether dismissal was appropriate. A dismissal will be fair if the decision was reasonable on the facts known to the decision maker.

The investigation as a whole should be looked at when assessing the question of reasonableness.

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.

The case British Home Stores Ltd v Burchell, 1980, established a three-part test for use in misconduct cases. The employer must:

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

Tribunals will assess whether a dismissal is within the band of reasonable responses by looking at the knowledge of the person making the decision after a reasonable investigation and not on the knowledge of other employees.

It is not the role of the tribunal to substitute its own views as to what should have been done in the circumstances.

Conduct ignored

Employers must act on conduct issues when they become aware of them because 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 acts of misconduct.

The test is whether, at the time of dismissal, the employer reasonably believed there was good reason to dismiss the employee. Of course, the subsequent discovery of misconduct which the employer did not know about at the time may affect the amount of any compensation awarded by a tribunal.

One of the potentially fair reasons for a dismissal arises where an employee could not continue to work in their job role without either the employer or the employee breaching a legal duty or enactment. In other words, an employer can dismiss an employee if it would be illegal for them to continue their job.

An example of illegality is an employee who drives as part of their job being banned from driving. 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, the employer should consider how essential driving is to the employee’s job.

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 for re-deployment
  • consider the length of the ban
  • consider the size and administrative resources of the organisation
  • 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 taxis or public transport at their own cost if appropriate?

It may also be possible in such cases to dismiss for ‘some other substantial reason’ provided a fair process has been carried out.

A dismissal for ‘some other substantial reason’ (SOSR), often referred to as the catch all category, is a potentially fair dismissal. There is no definition of what constitutes a SOSR – it will be a matter of fact in each case. This potentially fair reason for dismissal can also be hard to establish in a tribunal.

The following are some examples from case law of reasons that may fall under this category:

  • business reorganisation (changes to terms and conditions)
  • recruitment for short-term cover where that was known from the outset
  • expiry of a fixed term contract
  • the employee receiving a prison sentence
  • break down in trust and confidence
  • personality clashes
  • third-party pressure, for example, from a large client (provided this was for non-discriminatory reasons).

An example of third-party pressure would be where an employee works on projects for a large client organisation at the client’s workplace, and the client requests the employee is removed from the project for a valid, non-discriminatory reason. If there are no other vacant posts, a dismissal with notice for a SOSR may be possible.

If the reason for dismissal apparently falls under the category of SOSR, the decision to dismiss must be fair in all the circumstances.

Some other substantial reason

A dismissal for ‘some other substantial reason’ (SOSR), often referred to as the catch all category, is a potentially fair dismissal. There is no definition of what constitutes a SOSR – it will be a matter of fact in each case. This potentially fair reason for dismissal can also be hard to establish in a tribunal.

The following are some examples from case law of reasons that may fall under this category:

  • business reorganisation (changes to terms and conditions)
  • recruitment for short-term cover where that was known from the outset
  • expiry of a fixed term contract
  • the employee receiving a prison sentence
  • break down in trust and confidence
  • personality clashes
  • third-party pressure, for example, from a large client (provided this was for non-discriminatory reasons).

An example of third-party pressure would be where an employee works on projects for a large client organisation at the client’s workplace, and the client requests the employee is removed from the project for a valid, non-discriminatory reason. If there are no other vacant posts, a dismissal with notice for a SOSR may be possible.

If the reason for dismissal apparently falls under the category of SOSR, the decision to dismiss must be fair in all the circumstances.

The approach and procedure leading up to dismissal will vary depending on the reason for the dismissal. To minimise the risk of a claim, a fair procedure should always be followed.

In order to follow a fair procedure prior to dismissal, an employer will have regard to:

  • any contractual or non-contractual dismissal and disciplinary policy the employer has adopted
  • the Acas Code of Practice on disciplinary and grievance procedures
  • existing case law on unfair dismissal.

Role of HR

In the process leading to dismissal, people professionals should limit their advice to legal issues, the correct procedure and appropriate sanctions to ensure consistency with previous decisions. If HR starts prompting the disciplinary manager as to the appropriate decision, then there may be an improper influence on the proceedings, potentially making the dismissal unfair (see Ramphal v Department for Transport, 2015).

Unfair dismissal claims are made in employment tribunals rather than the civil courts. Making an application to the employment tribunal is, therefore, the main route for employees to pursue. There are other avenues open to employees and their employer in unfair dismissal situations and Acas plays a variety of roles in those options.

Conciliation

Since 2014, early conciliation has been compulsory for those wishing to bring an employment tribunal claim. If a claim is commenced in an employment tribunal, Acas has to try to reach an agreement between the parties, thereby settling the claim before it gets to a hearing.

Acas receives copies of the tribunal claim forms automatically and makes contact with the parties to promote settlement. If an Acas officer decides conciliation is not possible or does not achieve settlement within one month (this can be extended by a further fortnight), they will issue a certificate and the claim proceeds to the tribunal.

Prevention

The Acas Code of Practice on disciplinary and grievance procedures sets out guidance on how disputes should be resolved. Tribunals are required to take note of the relevant provisions of the Code and a significant departure from it may lead to the compensation paid by the employer being increased by up to 25%.

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.

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

Code of Practice

Employment tribunals use a number of factors to determine whether a dismissal is fair. An important factor, especially in misconduct cases, is whether the employer and employee have followed the Acas Code of Practice on disciplinary and grievance procedures. Tribunals can increase the compensatory award for unfair dismissal by up to 25% if the employer has failed to follow the Code or reduce any award to the employee by up to 25% if they have failed to comply with the Code.

Further information on early conciliation and presenting tribunal claims is available in our Tribunal claims, settlement and compromise Q&As.

An unfair dismissal claim 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.

The starting point is to calculate the original time limit which is three months less one day in most cases. This three-month time limit is then extended to accommodate the Acas early conciliation process. 
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 and needs both 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 conciliation period 'stops the clock' for lodging any tribunal claim so the usual three-month time limit will not expire while Acas is attempting to conciliate. The employee will 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. First, the employee must show that it was not reasonably practicable to present the claim in time. Then the employee needs to show that the time in which the claim was actually presented was reasonable.

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.

For more information on time limits and possible extensions see our Tribunal claims, settlement and compromise Q&As.

Compensation for an unfair dismissal normally consists of a basic award and a compensatory award.

Basic award

This compensates for loss of job security and 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.

Compensatory award

This is in addition to the basic award. This reflects immediate and future loss of earnings. A cap on the compensatory award has applied since 2013, which is 12 months’ gross pay or an amount set by legislation, whichever is the lower.

However, in two situations where automatic unfair dismissal applies, 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 upwards from 26 weeks’ to 52 weeks’ pay.

For current details, see our content on statutory rates and compensation limits.

Calculating awards

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:

  • 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.
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 pay-based element of the limit is calculated on the basis of gross pay.

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% for unreasonable failure to comply with any provision of the Code.

When a tribunal finds that a complaint for unfair dismissal is well founded, it will award compensation accordingly. But there are two other possible remedies available.

Re-instatement

The employee is treated in all respects as if the dismissal did not take place. This also 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 on 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:

  • 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 organisation has taken on a replacement the tribunal must disregard this unless:

  • it was necessary to take on the replacement
  • the employer had waited a reasonable time and had not heard from the employee that they were 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.

Disputes frequently involve the effective date of dismissal (EDT) – the date the termination actually took effect. Issues can arise where there was ambiguity in the words used, especially if they were spoken in the heat of the moment. Ascertaining the date on which a dismissal takes effect is crucial to the calculation of the time limits for commencing a claim of unfair dismissal.

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

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 to be sent by secure email or post or both. It is often better not to give the decision at the end of the disciplinary meeting. However, relying on the postal service may mean the date of dismissal is ambiguous.

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 of dismissal usually takes effect that day. The employer should immediately confirm the dismissal in writing as well.

  • Dismissal method - By letter or email 

Date of dismissal usually takes effect when the letter or email is read. Remember, the date of dismissal is not the date the letter was sent or received. However, the position is different if the employee deliberately avoids reading the dismissal letter.

  • Dismissal method - By letter or email, but the employee deliberately avoids reading it

Date of dismissal usually takes effect when the employee first had a reasonable opportunity to learn that he or she had been dismissed (see Gisada Cyf v Barrett, 2010 in our Dismissal case law).

  • Dismissal method - Communication of dismissal through a third party such as a solicitor reading a letter 

Date of dismissal usually takes effect the date that the solicitor tells the employee.

Employees can hand in their notice verbally or in writing. It is usually advisable for them to resign in written form. While a verbal resignation is effective, getting an unambiguously worded written confirmation will make it more difficult for an employee to subsequently argue that they have been dismissed.

Resignations become problematic if the words are spoken in the heat of the moment, the words used are ambiguous or the employee tries to retract the 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.

The issues that can arise in tribunals are set out below.

Lack of clarity

If it is not clear whether a resignation is intended, or the words used are ambiguous, it is necessary to assess how a reasonable employer would have understood the words used. 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 the words were uttered must be considered and it would be appropriate to have a cooling off period.

For example, in Sothern v Franks Charlesly, 1981) the Court of Appeal considered words such as 'I am resigning' were unambiguous. Comments from an employee such as ‘I don’t want to work here’ or ‘I’m off’ may be less clear. The tribunal will always look at the surrounding facts and consider events both before and after the purported resignation.

Heat of the moment

The starting point is that a clear resignation is a resignation. An employee who resigns cannot unilaterally withdraw that resignation just because they have calmed down and changed their mind. The employer must agree to the retraction.

There may be exceptions to this where the resignation arises when emotions are running high and is then promptly retracted. Employment tribunals have previously held that where there are pressures or stresses on an employee, or the employee’s own personality is a factor, the employer should have considered giving the employee the opportunity to retract their resignation once they have calmed down (see Kwik-Fit (GB) v Lineham, 1991).

An employer that does not allow an employee to retract a heat of the moment resignation may risk of an unfair dismissal claim. The employee may face disciplinary action for leaving without permission or rudeness, depending on the circumstances.

Clear resignations

If there is no evidence that an employee is acting in the heat of the moment then the employer may be entitled to think a verbal resignation is genuine. If clear and unambiguous words have been used, a tribunal should only decide there was no resignation in exceptional circumstances.

An employer cannot avoid unfair dismissal claims by dismissing employees one week before their continuity of employment has accrued. If an employer fails to give notice at all, or gives insufficient statutory notice, the period of employment will be extended by the statutory minimum notice period. 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 employs a female employee on 1 July 2018. On 24 June 2020, the firm dismiss her with no notice. She is, therefore, just short of the two-year qualifying period to bring an unfair dismissal claim. She could have added on the one week’s statutory minimum notice to ensure that she qualified to pursue her claim.

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 two-year qualifying period.
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 (see our wrongful dismissal Q&As).

Personality clashes are a common problem which employers have to deal with and the behaviour it gives rise to can be a potentially fair reason for dismissal. Personality conflicts may be classed as 'conduct' or may amount to 'some other substantial reason'.

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.

Personality on its own does not justify dismissal, but if personality resulted in conduct that affected work, a dismissal may be justified. The courts have said this could be more appropriately categorised as ‘some other substantial reason’ for dismissal rather than a 'conduct' dismissal.

It may not be necessary to dismiss both employees if one improves, but the other does not. In another case, 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’ and ‘two faced, numerous swear words followed by the word ‘bitch’, and the phrase 'I'm not going to speak to you, why should I anyway'.

Following disciplinary action one 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.

An 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. 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.

Other cases involving personality clashes may be age or race related and can give rise to 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.

Older employees, including those over 65, can claim unfair dismissal and may have age discrimination claims as well.

There is no default retirement age in the UK and retirement of an employee simply because of their age is not a fair reason to dismiss them. In theory, an employee  has a right to remain in their job until their death if they wishes to, provided there is no deterioration in their performance. In order to avoid an unfair dismissal claim from an older employee, the employer will have to justify their dismissal.
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
  • that the decision to dismiss is objectively justifiable.

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

Yes, the non-renewal of a fixed-term contract can constitute a 'dismissal' for unfair dismissal purposes although employees engaged under a fixed-term contract must have the necessary two years continuity of service. 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 any dismissal to be fair, it must be for one of the five potentially fair reasons set out in the Employment Rights Act 1996 and the employer must also have acted reasonably in dismissing the employee for that reason.

Where an employee is dismissed at the expiry of their fixed-term contract, the dismissal will be potentially fair for ‘some other substantial reason’ but the employer will still need to show that, in all the circumstances, the dismissal was fair.

The aspects employers will need to discuss will vary and may include in some (but not all) cases the possibility of alternative employment. Employers should also comply with the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002 and ensure that staff employed on fixed-term contracts are not treated less favourably than comparable permanent staff, and that the dismissal is fair overall (see Royal Surrey County NHS Foundation Trust v Drzymala, 2018).

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

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Dismissal procedures

Introductory guidance on dismissal in the UK, focusing on unfair dismissal and with advice on following a fair dismissal procedure

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