Unfair dismissal in Great Britain is a statutory right under the Employment Rights Act 1996, in contrast to wrongful dismissal being a contractual right. Employees (but not ‘workers’ – learn about the difference in our employment status factsheet) have this statutory right not to be unfairly dismissed. The law in Northern Ireland is covered in our factsheet for CIPD members on the legal differences from Great Britain.
To successfully defend an unfair dismissal claim, the employer needs to satisfy a two-limb test. The first limb relates to the five specific fair reasons for dismissal, and the second limb relates to whether the employee's dismissal was fair and reasonable in the circumstances, including whether it was handled properly.
To be potentially ‘fair’, a dismissal must be for one of five reasons:
- Capability or qualifications.
- Conduct.
- Illegality or contravention of a statutory duty.
- Some other substantial reason.
- Redundancy - see our Redundancy factsheet for more. CIPD members can see more detail in our Redundancy law Q&As.
If an employee has not been dismissed for one of these reasons, the dismissal will be unfair. Retirement is no longer a potentially fair reason for dismissal.
There are special statutory rules relating to discussions before a potential dismissal which then leads to a settlement agreement. For more detail on these protected conversations, CIPD members can see our Tribunal claims, settlement and compromise law Q&As.
Parallel claims
Employees who have both unfair dismissal and wrongful dismissal claims can bring both claims, but to the extent that any compensation overlaps the employee would not be entitled to double recovery for the same loss.
Individual dispute resolution procedures
Employers should have clear individual dispute resolution procedures that are communicated to all staff. Line managers and any staff members involved in managing disciplinary and grievance matters must be properly trained in the organisation’s policies and procedures and know how to implement them. All disputes should be handled in a fair and consistent way across the organisation.
Fairness
As well as falling within one of the five potentially fair reasons for dismissal, an employer must also have acted fairly and reasonably, taking into consideration the size and resources of the employer. This involves following a fair procedure and an employment tribunal still has wide discretion on what it considers to be 'fair' although a fair procedure involves considering the employer’s own procedures and the Acas Code of Practice for dismissals on the grounds of conduct and capability.
Even if an employee is found guilty of an act of very serious misconduct (often called ‘gross misconduct’), this will not necessarily be enough to make any dismissal fair. The employer must still carry out a thorough investigation. Importantly, any decision to dismiss must fall within what is known as the band of reasonable responses available to the employer.
Investigation
Dismissal is a serious matter that needs careful handling. Before taking any action, managers should first establish the facts. And before considering dismissal, managers should also consider if a more positive approach that does not involve dismissal is likely to be effective.
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Matters relating to conduct - where the employee’s conduct is an issue, the level of ‘proof’ that the employee committed an alleged offence is not as high as that required in the criminal courts. However, the employer must be able to demonstrate that it carried out a thorough investigation into the alleged offence. Acas has published guidance.
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Matters relating to poor performance - where the employee’s capability is an issue, matters may be beyond the employee’s control; if so, the employer should put in place appropriate remedies (often involving learning and development) to help improve the employee’s performance.
Employers should take account of any other circumstances, such as an underlying health condition, in addressing poor performance. Managers should facilitate a supportive conversation and signpost to any expert sources of help if needed. See our factsheet on performance management.
If these positive approaches aren't effective, the employer may need to take disciplinary action, which could include dismissal.
Following a fair procedure
Acas provides guidance on dealing with disciplinary and dismissal and grievance matters in its Code of Practice. Employment tribunals will always take the Acas Code into account and employers must follow the Code.
Employers must also follow their own contractual or customary disciplinary process or dismissal procedure for a dismissal to be 'fair'.
Employers should usually follow at least three stages (although an appropriate procedure will often be more complex than this). For example:
- The employee should be informed in writing of the alleged offence.
- There should be a meeting between the employee and employer to discuss the alleged offence. The employee has a statutory right to be represented at this meeting by a trade union representative or colleague.
- The employee should have the opportunity to appeal against any sanction.
All decisions throughout the process on suspension and disciplinary sanctions should be taken by more than one person to help ensure impartiality.
The employer should ensure that all communications, in whatever format, should be timely, comprehensive, unambiguous, sensitive and compassionate.
Maintaining people’s dignity and safeguarding their health and wellbeing
Concern for the health and welfare of people involved in a disciplinary procedure should be a priority at every stage.
Suspension should be a matter of last resort, when working relationships have broken down irreparably and after all other reasonable options have been considered. It should be reviewed on an ongoing basis and be time bound.
If an employer does fairly dismiss an employee, they should still have regard to the individual’s health and wellbeing and the potential impact that the action could have on them. Even where the organisation has carefully followed a thorough process and the dismissal is justifiable and proportionate, it is likely to be a devastating outcome for the individual. The organisation should act with compassion as part of a person-centred approach, whatever the circumstances, and ensure that support is available where needed.
Qualification to make an unfair dismissal claim
To qualify to claim unfair dismissal, an employee needs to have two years’ continuous service with the employer. Employees employed before 6 April 2012 only require one year’s continuous service.
All employees must contact the Acas early conciliation service before making an employment tribunal claim following a grievance. CIPD members can see more in our law Q&As covering early conciliation.
There are numerous exceptions to the requirement for a qualifying period to bring a claim, such as:
- Trade union membership or activities.
- Pregnancy or childbirth.
- Taking maternity, adoption, paternity or parental leave.
- Claiming the National Minimum Wage or National Living Wage.
Is the dismissal automatically unfair?
Examples of automatically unfair reasons for dismissal include those listed above. CIPD members can see more detail in our Unfair dismissal law Q&As.
