Dismissal: it’s never an easy time, for the employee being dismissed or the employer doing the dismissing. Sometimes things just don’t work out and, after the correct procedures are followed and options explored, terminating the contract is the last resort choice.
But not all reasons for dismissal are equal. So, what are the 5 fair reasons for dismissal and which reasons could land an employer in hot water?
Fair and unfair dismissals
What makes a dismissal fair or unfair? You must make sure that you are dismissing staff using a fair and consistent procedure and for a good reason, or you may be liable to deal with an employment tribunal. Firstly, make sure you have a robust disciplinary policy in place; SMEs should set out rules in their policies so employees know what to expect (want to find out more? HR expert Gemma Dale gives advice on how to create great HR policies as an SME).
The potential unfairness of a dismissal depends on how long the employee has worked for the organisation. For employees who started working for an employer before 6th April 2012, at least one year’s continuous service ensures they have the right not to be unfairly dismissed. For employees who started after this date, this changes to two years.
Also, be aware that an employee with less than this amount of service may still be able to bring forward a wrongful dismissal claim if there has been a breach of contract.
The 5 fair reasons for dismissal
In accordance with Acas guidance on dismissals, these are the five reasons for dismissal that are deemed 'fair':
1. Conduct or misconduct
In this case, an employee is being dismissed due to a reason related to their conduct. It should be clearly stated what constitutes misconduct within policy documentation and company guidelines; common examples of misconduct including bullying, harassment, poor attendance, insubordination, and unexplained absence. Gross misconduct is more serious in nature and includes acts that are very serious or have very serious effects, such as fraud, violence, gross negligence, or serious insubordination.
A single act of gross misconduct can result in a fair dismissal without previous warning or full notice/payment in lieu, whereas in general misconduct issues will require multiple warnings and scheduled meetings before dismissal with full notice/payment in lieu as a final result (as part of a fair dismissal process, which we discuss further below).
Misconduct outside of work
It is also worth noting that it may be potentially fair to dismiss an employee for conduct outside of the workplace, provided that it impacts the employee’s work or the employer in some way (for example, damaging the employer's reputation). The rise in the use of social media has significantly contributed to an increase in these types of dismissals.
2. Capability or performance
An employee can be fairly dismissed for a reason related to their capability or performance. Capability is classed as anything related to an employee's skill, aptitude, health or any other physical/mental quality. Of course, there are more positive ways to address issues of poor work performance or capability before taking a formal disciplinary route.
Dismissals for these reasons are potentially fair, as they relate to the employee's capability to do the job that they were employed to do. However, employers should be aware that in cases of dismissal for ill-health, if the illness amounts to a disability, the dismissal may amount to unlawful disability discrimination, even if it is legally ‘fair’.
Related article: The Bradford Factor and disability: absence procedure flexibility
Redundancy can be another fair reason why employers may need to dismiss an employee, for example due to a business closure, a workplace closure, or less requirement for employees to carry out a particular kind of work. The selection process for redundancy needs to be fair and clearly signposted from the beginning, otherwise a redundant party can still file for unfair dismissal.
In some circumstances, a dismissal on the grounds of a genuine redundancy will be automatically unfair, for instance if the employee was selected because they are pregnant, so it's important to be careful.
4. Statutory illegality or breach of a statutory restriction
If it becomes illegal or a statutory breach for an employee to continue working within their role, this is a fair reason for dismissal. If this is the case, a formal dismissal procedure must still be followed. Examples of dismissals that could fall within this category include the following:
- Continued employment would breach immigration rules (e.g. the employee's right to work in the UK has expired)
- The employee has lost their driving licence and they need to drive to do the job
- The employee doesn't have or has lost a qualification they need to do their job
- The employer discovers that the employee has/has received a criminal record
5. Some other substantial reason
In reality, there are more fair reasons for a dismissal, depending on context of the situation. In this case, some other substantial reason (SOSR) that justifies the dismissal may come into play. According to an article from Bevan Brittan, an SOSR often involves a breakdown of trust or confidence between employers and the employee. An example of a SOSR dismissal might be that a client of the employer is insisting that the employee is dismissed, otherwise they will take their business elsewhere.
A fair dismissal process
Beyond having a fair reason for dismissal, the dismissal process must also be conducted fairly for all employees. It’s good to try to solve any issues informally before engaging in a formal disciplinary process. If dismissal is the ultimate outcome, then there are ways to ensure a fair process. According to the Acas code of practice on disciplinary and grievance procedures, employers should do the following during the disciplinary process to ensure it is fair:
- Establish the facts of each case (we recommend using an HR software system to help make sure you have the data and documents you need at the ready)
- Inform the employee of the problem
- Allow the employee to be accompanied at a disciplinary meeting
- Decide on appropriate action after the meeting
- Provide employees with an opportunity to appeal disciplinary action
It’s advisable to follow this code of practice, as judges on an employment tribunal will take this code into account when assessing a case.
Are you working out whether dismissal is the correct choice? We recommend following official Acas guidelines and expert advice when it comes to disciplinary actions and dismissal, as it’s so important to get right for the continued compliance and success of the business.
Written by Fiona Sanderson
Fiona is Marketing Manager at myhrtoolkit. Her areas of expertise include HR systems, productivity, employment law updates, and creating HR infographics.