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.
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, insubordination, and unexplained absence (a form of absenteeism). Gross misconduct includes acts that are very serious or have very serious effects, such as fraud, violence, gross negligence, or serious insubordination.
2. Capability or performance
An employee can be fairly dismissed for a reason related to their capability or qualifications. Of course, there are more positive ways to address issues of work performance or capability before taking a formal disciplinary route.
Further reading: How to dismiss an employee for poor performance
Redundancy can be another fair reason why employers may need to dismiss an employee, when a suitable job is not otherwise available. 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.
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. For example, an employee’s right to work in the UK may expire or they may lose a license that made it legal for them to carry out a role (and there are no other feasible roles available). If this is the case, a formal dismissal procedure must still be followed.
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.
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 a HR software system to help make sure you have the data 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.