Unfair dismissal

Last updated: 17 Aug 2021

Claims for unfair dismissal can be brought by employees who have been dismissed from their employment. There are two kinds of unfair dismissal: automatic and ordinary. Strict deadlines apply for making claims for unfair dismissal, and Early Conciliation via ACAS is now required before starting a claim.

Was there a dismissal?

Broadly speaking, a dismissal means one of three situations:

  • The employment was terminated by the employer, with or without notice;
  • A fixed term or temporary contract came to an end and was not renewed on the same terms; or
  • The employee was constructively dismissed.

Unfair dismissal claims cannot be brought where the employee has voluntarily resigned from his/her employment (unless it was a constructive dismissal).

It may be a dismissal if an employer makes a substantial change to the terms and conditions of an employee’s contract of employment, meaning that the employee has effectively been dismissed and re-engaged under a new contract. For more information, see our article on imposed changes.

If an employee’s fixed term contract has come to an end, it may be unreasonable and amount to an unfair dismissal for the employer not to consider the employee for employment in another suitable post.

Automatic unfair dismissal

If someone is dismissed for a reason which is prohibited under the law, this is an automatic unfair dismissal. There is a list of reasons for which it is automatically unfair to sack someone – this includes reasons relating to the employee having taken time off for pregnancy, parental leave, paternity and maternity leave , taking time off for dependants, making a flexible working request, some trade union activities, and whistleblowing  (there are others). In most cases, automatic unfair dismissal can be claimed even if the employee only recently started working for the employer. Whether there is a minimum qualifying period of employment required for an employee to be protected from unfair dismissal depends on the reason for dismissal.  For example, a dismissal because of pregnancy or maternity leave is automatically unfair from the very start of employment.

If the dismissal is automatically unfair, there is no requirement that an employee have a certain length of service to bring a claim.

Fair reason for the dismissal

If the reason for the dismissal is not one that would render the dismissal automatically unfair, in order to bring a claim for unfair dismissal, the employee must have worked for the employer for at least two years. In Northern Ireland you can bring a claim for ordinary unfair dismissal with one year’s service.

The next question to consider is whether the reason for the dismissal is potentially fair. Potentially fair reasons to dismiss someone include:

  • Capability- the employee was incapable of performing his/her job due to incompetence, a lack of qualifications or sickness.
  • Conduct- the employee behaved badly.
  • Redundancy.
  • Contravention of the law – for example, a lorry driver who does not have a driver’s licence.
  • Some other substantial reason (SOSR) capable of justifying the dismissal – this can include things like a restructure of the workplace or the need to protect the employer’s reputation.

Fair procedure for the dismissal

If the reason for the dismissal was one of the five potentially fair ones above, the next issue to consider is whether in that particular situation, it was fair for the employer to dismiss the person.

The employment tribunal will determine the reasons for the employee’s dismissal: the tribunal may decide that the reason for dismissal is different from the reason put forward by the employer.  It is worth considering whether you agree with the reason for dismissal put forward by your employer.

If the dismissal was because of the employee’s conduct (poor performance or misconduct) then deciding if the dismissal was fair entails looking at factors such as whether the employer used a fair disciplinary and performance management procedure in sacking the person.  At the minimum, the ACAS Code of Practice on Discipline and Grievance (the “ACAS Code“) should be followed.

If the employer has asserted conduct as the reason for dismissal, the tribunal will consider whether the employer (a) genuinely believed that the employee was guilty of that misconduct; (b) had reasonable grounds to believe that they were guilty (did they have evidence?); and (c) carried out a reasonable investigation.

The tribunal will then evaluate whether the employer acted fairly by considering whether the dismissal was in the “range of reasonable responses”. If the employer did not act fairly in the particular situation, then it is an unfair dismissal.

A tribunal will normally expect to see escalating sanctions used in respect of conduct, such as a verbal warning, a first written warning, final written warning then dismissal depending on the severity of the conduct. If the employer considers the conduct to have been gross misconduct, it may move straight to dismissal.

If the employer has asserted capability as the reason for dismissal, they must have a reasonable belief that the person is not competent or suitable to do the job. Usually this should involve giving warnings so that the employee has the opportunity to improve.

If the employer has asserted redundancy as the reason for dismissal, they will usually need to give the employee fair warning that the employee is at risk of redundancy and consult with them on ways to avoid redundancy, before the employer gives notice.

Note that it is also possible to bring complaints of dismissal under other legislation. For example, a dismissal because a woman is pregnant would be both automatic unfair dismissal and a breach of the Equality Act 2010.

Potential compensation

If a tribunal decides the employee was unfairly dismissed, it will then go on to consider what, if any, compensation should be awarded, and re-instatement/re-engagement. Compensation can be reduced in certain situations, for example if the tribunal thinks the employee’s behaviour was part of the reason s/he was sacked; if just the procedure used to dismiss the individual was unfair; if just the procedure used to sack the individual was unfair; or if the employee does not reasonably mitigate her loss. Not complying with the ACAS Code can lead to an increase or decrease in compensation, depending on who was at fault.

There are two forms of award – a basic and a compensatory award. The basic award is calculated in the same way as statutory redundancy pay and the compensatory award is based on loss of earnings. The maximum basic award from 6 April 2021 is £16,320  (30 weeks’ pay subject to the limit on a week’s pay). The maximum compensatory award for unfair dismissal (compensation for loss of earnings) is normally capped at the lesser of 52 weeks’ pay or (from 6 April 2021) £89,493 though this cap may not apply in the case of an automatic unfair dismissal (depending on the reason) or whistleblowing.  If you claim compensation for loss of earnings, a tribunal will usually expect you to have tried to minimise your loss by looking for another job (unless you are unable to work).

This advice applies in England, Wales, Scotland and Northern Ireland. If you live in another part of the UK, the law may differ. Please call our helpline for more details.

If you have further questions and would like to contact our advice team please use our advice contact form below or call us.

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The information on the law contained on this site is provided free of charge and does not, and is not intended to, amount to legal advice to any person on a specific case or matter. If you are not a solicitor, you are advised to obtain specific legal advice about your case or matter and not to rely solely on this information. Law and guidance is changing regularly in this area.

We cannot provide advice on employment rights in Northern Ireland as the law is different. You can visit the Labour Relations Agency or call their helpline Workplace Information Service on 03300 555 300.