Following Avensure’s recent interactive client training webinar on ‘Understanding Unfair Dismissal’, we share some of the questions put forward by our clients who attended that webinar: “What is unfair dismissal?”
What is a fair dismissal?
There are 5 fair reasons for dismissing a member of staff:
- Capability (including medical capability)
- Statutory Restriction
- Some other substantial reason (SOSR)
Generally, employees require two years’ service to bring a claim for unfair dismissal, excluding claims for automatic unfair dismissal. Read more about automatic unfair dismissal reasons via the link below:
In establishing if a dismissal is fair, an Employment Tribunal will consider 2 main points:
1. The reason for the dismissal is genuine.
2. The reasonableness of the decision to dismiss, taking account of the specifics of the case, can also include the size and resources of the organisation.
In order to avoid unfair dismissal, a decision to dismiss an employee must be reasonable and a last resort. This will primarily come down to following a fair procedure, which will usually involve:
- An investigation – this should be impartial and carried out within a reasonable timeframe.
- Full sight of relevant information to be used in their case. For example, in cases of gross misconduct, the employee should have prior sight of any evidence
- A fair hearing (or redundancy consultation meeting)- where appropriate notice is given and the right to be accompanied, where the employee is able to put forward their defence or make relevant statements to outline their mitigation to be taken into account prior to a decision being made.
- A fair consideration of all material facts and possible alternatives to avoid a dismissal.
- A decision was issued in writing, setting out the reasons for the dismissal.
- The right to appeal the decision.
1) Is ‘last in, first out’ a fair reason to select someone for redundancy?
If you have a genuine redundancy situation, you can consider employees with short service (employees with less than 2 years’ service) versus employees with longer service.
However, if you had an employee with 4 years’ service and another with 8 years’ service, you wouldn’t select the employee with less service in this instance as they are both long-serving employees, however, length of service can be used together with other redundancy selection criteria.
We would review your business rationale and employee information prior to beginning the process to see if ‘last in, first out’ was an option for you.
Last in, first out redundancy can present a discrimination risk; however, for more information on the use of ‘last in, first out’ in a redundancy situation, please see our article below:
2) Is the 3-month timescale required to bring a claim for unfair dismissal, 3 calendar months?
It is three calendar months (less one day) from their effective date of termination, i.e., the date on which they were dismissed (or resigned in cases of constructive dismissal) or the final day of their notice period if they worked it.
Please note that there is a time limit of 6 months (less 1 day) for bringing a claim relating to statutory redundancy pay or equal pay.
When deciding what to award an employee if they are successful in their claim for unfair dismissal, the award is made up as follows:
- Basic Award- based on age and length of service- subject to statutory cap – £19,290 (as of 2023)
- Compensatory Award- focuses on Compensation for losses incurred as a result of the unfair dismissal. £105,707 (as of 2023)- or 52 weeks’ pay.
Please note that for cases involving discrimination, discrimination awards are uncapped!
3) If an employee becomes ill and cannot perform their duties, would it be fair to make them redundant or ask them to resign?
Genuine redundancy refers to a role that has ceased or diminished in some way, so this would not be an appropriate or fair dismissal reason in this instance. Even if a fair procedure was followed, the dismissal would not be for a genuine redundancy and would be deemed to be unfair by a tribunal.
You can, however, fairly dismiss an employee on the grounds of ill health. This falls under capability and is known as a medical capability dismissal.
Remember, someone who has a long-term medical condition may meet the legal definition of disability under the Equality Act, so advice must be sought before any dismissals due to ill health.
Employees should not be asked to resign under this or any circumstances. If they are, then the risk to the employer is a claim for constructive dismissal, where an employee resigns due to the conduct of the employer. Please see our previous guide to constructive dismissal below:
4) If an employee is part-time and the employer needs the role to become full-time and the employee cannot/will not agree, what are the options for the employer?
The employer can make changes to the contractual working arrangements of the employee, but they must have a good business reason for doing so. This type of dismissal falls under a dismissal for SOSR (some other substantial reason) and is more commonly known as ‘fire and rehire’, i.e., the existing contract is terminated, and a new contract with revised terms is imposed.
The employer would need to be able to demonstrate that the changes they are proposing are business-critical and not simply for mild inconvenience or preference.
In the case of part-time employees, be aware that employees who are part-time are protected from less favourable treatment on the grounds of their part-time status. Many part-time employees are part-time due to childcare or caring responsibilities, so any changes affecting their working arrangements should not be discriminatory and imposed following a fair consultation and only as a last resort.
For more information on dismissal for SOSR, please click on the link below:
Advice must be sought prior to making changes to any employee’s contractual terms.
5) If the employee is under two years’ service, then as long as the reasons for dismissal are not automatically unfair, then they would not be able to make a claim.
They would not be able to make a claim for unfair or constructive dismissal, but other claims, such as discrimination and wrongful dismissal (primarily concerning breaches of contract), are still possible.
It is always advisable to aim to run a fair process ahead of any dismissal, irrespective of the employee’s length of service and to seek the advice of Avensure prior to taking action to avoid a potential claim for constructive dismissal.
Dismissal frequently proves to be more intricate than what employers initially anticipate, and due to the intricate legal aspects, the potential for missteps and unfair or constructive dismissal is high.
Contact us if you need advice on redundancy selection criteria, how to dismiss employees fairly, want to understand the potential risks, or for guidance through the disciplinary and dismissal process.
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