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Unfair Dismissal & Employee Rights

Unfair dismissal claims are one of the more common claims brought before the Employment Tribunal. It is important that businesses understand what they need to do to limit their exposure to this type of claim.

Employers should be aware that a dismissal can arise in several ways, for example through termination by the employer, by the ending of a fixed-term contract, or by constructive dismissal.

Employees have the right to claim unfair dismissal. Self-employed people and ‘workers’ are unable to claim unfair dismissal, though other claims may be available to them. An employee needs to have more than two years’ service to gain the legal protections to bring a ‘unfair’ dismissal claim.

Employers should also be aware that dismissals for certain reasons are automatically unfair, and employees would not need to have been employed for two years or more to pursue these types of claim.

Constructive Dismissal

An employee is constructively dismissed if they resign from their employment because of the employer’s intolerable conduct. There is a constructive dismissal when the following occurs:

  • There is a very serious breach by the employer of the express or implied terms of the employment contract
  • The employee resigns in response to that breach
  • The employee does not delay unreasonably before resigning (otherwise the employee might lose their right to claim constructive dismissal)
  • For example, if an employer fails to pay an employee (a key contractual requirement) the employee may be able to resign but allege that the resignation should be seen by the tribunal as a dismissal.

Constructive dismissals are often alleged in response to workplace bullying allegations, where the employee feels that the employer’s behaviour has been intolerable.

A constructive dismissal is not always an unfair dismissal. The tribunal will look at the employer’s conduct and decide whether it acted fairly, despite having breached the contract.

What is a Fair Dismissal?

A dismissal is “fair” if the employer shows that the reason for the dismissal was one of the five potentially fair reasons for dismissal and that the dismissal was managed in a reasonable way. The employer must demonstrate the reason for the dismissal during a tribunal.

Determining if a Dismissal is Reasonable

Once the employer has established a potentially fair reason for the dismissal, the tribunal must then consider if the employer acted reasonably in dismissing the employee for that reason.

This aspect of fairness is usually divided into two parts:

  • Did the employer follow a fair procedure?
  • Did the employer act reasonably in treating the reason as a sufficient reason for dismissal?

As a starting point an employer will need to do to be able to demonstrate that it had applied the following:

  • Investigating the issues or allegations thoroughly
  • Making sure that the employee is aware that they are at risk of dismissal and why
  • Allowing them to argue their case
  • Allowing them to be accompanied by a work colleague or trade union representative
  • Allowing a right of appeal

The ACAS Code of Practice on Disciplinary and Grievance Procedures provides important guidance for dismissing an employee. Tribunals must take this guidance into account when deciding whether an employer has acted reasonably; in other words, if the employer follows the ACAS Code, they are more likely to be found to have been acting reasonably.

These guidelines can also affect the amount of compensation due, as tribunals have the power to increase or decrease a compensatory award by up to 25% for a party’s unreasonable failure to comply with the code.

The code states that an employer considering a case of alleged misconduct or poor performance should:

  • Investigate the issues
  • Inform the employee of the issues in writing
  • Conduct a disciplinary hearing or meeting with the employee
  • Inform the employee of the decision in writing and include a right of appeal
  • The ACAS Code recommends the following steps when conducting a disciplinary hearing:
  • Employers should explain the complaint against the employee and go through the evidence that has been gathered
  • Employees should be given a reasonable opportunity to ask questions, present evidence, and call relevant witnesses

The Employment Tribunal must decide whether the employer’s decision to dismiss the employee fell within the range of responses that a reasonable employer in those circumstances and in that business might have adopted. In other words, the tribunal will only consider whether another reasonable employer faced with the same set of circumstances would have also made the same decision to dismiss. It is irrelevant whether the tribunal would have dismissed the employee if it had been in the employer’s shoes: the tribunal must not substitute its view for that of the employer.

Automatically Unfair Dismissals

In certain circumstances, a dismissal is automatically unfair. These include:

  • Reasons connected to pregnancy or childbirth
  • Health and safety activities
  • Whistleblowing
  • Exercising various time off rights
  • Asserting a statutory right (for example the right to take annual leave)

The employee is protected from dismissal for these reasons from their first day of employment. Employers should also be aware that there is no upper limit on compensation for these types of claims, so they could become very expensive. Therefore, it is a good idea for employers to follow at least a partially formal dismissal procedure in line with the ACAS Code, even where employees do not have two years’ service, as employees may pursue an automatic unfair dismissal claim.

If the employer has documented the reasons for their dismissal, for instance using a document management system, they will find it far easier to defend such a claim.

Taylor Law Legal Services for Employers

We offer a full range of legal services for employers, for both contentious and non contentious issues, including the following:

Whistleblowing

Discrimination, harassment, bullying

Grievances

Employment Tribunal claims

Holiday pay, maternity and flexible working

Settlement agreements

Sickness, absence and disability

Unfair dismissal

Wages and deductions

Confidentiality and restrictive covenants

Disciplinary and suspension

Contact us if you would like to discuss how we can help you with your employment needs, we would be happy to hear from you. Time is often crucial in dealing with a contentious employee matter, and it is therefore advisable to seek legal advice as soon as you are aware of an issue arising. We have solicitors in Middlesbrough, Leeds and London.

For an initial discussion, call us on 0113 532 8100 (Leeds), 01642 221 108 (Middlesbrough) or 0203780 7646 (London) or fill in our Contact Form.

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