What is automatically unfair dismissal?
When considering a claim for unfair dismissal, the Employment Tribunal will follow a particular legal protocol to decide whether there will be a full hearing to decide on your case, such as determining how long an employee has been working for an organisation. As a general rule, employees cannot claim unfair dismissal until an organisation employs them for a minimum period of two years.
However, you can define specific reasons an employer may have for dismissing an employer as ‘automatically unfair dismissal. Suppose you have dismissed a staff member, and the circumstances given fall under one or more of the categories featured below. In that case, they may still be able to claim at the Employment Tribunal, regardless of their length of service, as each gets considered a breach of an employee’s statutory legal rights through legislation within the Employment Rights Act 1996.
Automatically Unfair Reasons For Dismissal and Automatically Unfair Dismissal Examples
Even if you’ve acted reasonably, some reasons for dismissal get classed as automatically unfair, and there are several grounds for which an employee can claim automatic unfair dismissal. The areas under which these claims get made include: –
- Automatic unfair dismissal whistleblowing
- Acting as an employee or a trade union representative
- Dismissal relating to a trade union representative
- Pay and working hours, including the Working Time Regulations, annual leave and the National Minimum Wage
- Acting as an occupational pension scheme trustee
Pregnancy, extending to all reasons relating to maternity/paternity, parental and adoption leave or time off for dependants
Compulsory retirement on the grounds of age is also unlawful unfair dismissal unless you can objectively justify it – but this could be challenged at an Employment Tribunal.
What do they consider automatically unfair reasons for dismissal?
Should an Employment Tribunal determine that the claim made against you is automatic unfair dismissal, then you will not be able to defend the claim. It won’t matter whether you acted reasonably or not; if the claim is substantiated, you will most likely lose the case.
They may expect either/or: –
- Reinstatement after unfair dismissal
- Pay compensation
The automatic unfair dismissal compensation will usually depend on your employee’s: –
- Gross weekly pay
- Their length of service
There is a limit on the amount of compensation for automatic unfair dismissal an Employment Tribunal can award, apart from in cases relating to dismissals for a discriminatory reason or for raising a health and safety complaint.
The case of Mrs McMahon v Heron Financial Limited 2020
Automatic unfair dismissal discrimination can be a significant issue for an employer. It can be financially damaging and harm your reputation if you get things wrong and don’t follow the law. Below we can look at the Mrs McMahon v Heron Financial Limited case. Law on automatically unfair dismissal is strict to protect the employee and employer.
Mrs McMahon had begun her employment as a mortgage protection adviser with Heron Financial Limited in June of 2017. Mrs McMahon had signed a contract to work a 40-hour week. Still, she was often required to work more than 48 hours a week, even though she had no signed agreement with Heron Financial Limited opting out of the Working Times Regulations average 48-hour working week.
Mrs McMahon spoke with her management regarding several commission payments that she felt were due in May 2019. Shortly after this, Mrs McMahon was absent from work for a fortnight due to ill health. Upon her return to the workplace, a meeting was held where Mrs McMahon raised her concerns over the stresses caused by the long working weeks, the unpaid commission, and sick pay she believed she was owed.
Only two days after the meeting was held, Heron Financial Limited dismissed Mrs McMahon with no explanation. Mrs McMahon then raised a grievance that Heron Financial Limited did not uphold, which was dealt with by letter. In response, Mrs McMahon went to the Employment Tribunal (ET). She made numerous claims about it being an automatically unfair dismissal because all she did was assert her statutory rights to work under the 48-hour average and not have deductions made to her wages unlawfully.
Heron Financial Limited then argued that her dismissal from the company was due to her poor performance. Mrs McMahon had been previously acknowledged as having one of the highest conversion rates at the company and was even awarded a bottle of champagne. The ET could find no evidence to support the claims of Heron Financial Limited.
The ET held that Mrs McMahon was the victim of automatic unfair dismissal because she had under two years of service with Heron Financial Limited.
Mrs McMahon was awarded £23,127 in total. £19,552 for unfair dismissal, £2,736 for the unlawful deduction of her wages, £587 for unpaid sick pay and commission, and £252 for wrongful dismissal.
Automatic Unfair Dismissal FAQs
What’s the difference between unfair dismissal and automatic unfair dismissal?
The rules for unfair dismissal are that if an employee started their job after the 6th April 2012 and has two years of continuous service within your organisation, they get protected from unfair dismissal. For an employer to avoid an unfair dismissal discrimination claim, you would need to prove that the dismissed employee showed a lack of capability within their role in the workplace. Prove the employee was guilty of misconduct (violence, very poor attendance, or theft), a lack of ability to meet their statutory requirements, or it could be a genuine redundancy.
Reasons for automatic unfair dismissal would be dismissing an employee for a reason protected by legislation. It could mean dismissing an employee for paternity/maternity leave, pregnancy, asking for minimum wage, asserting a statutory right, trade union activities, and whistleblowing. Automatic unfair dismissal cases usually end with the employer offering to reinstate the employee in a different position or pay the dismissed employee compensation.
How much can wrongful dismissal compensation cost me?
There is a cap set on wrongful dismissal compensation in the UK. Claims in an employment tribunal are set at £25,000, but there is no limit in the civil court. £6,646 was the median in 2019-2020, so there are good reasons for avoiding unfair dismissal claims.
Do employees need two years of service with my company to claim automatic unfair dismissal?
If an employee started their employment with you after the 6th of April 2012, they need to have two years of service with you to claim automatic unfair dismissal if you dismiss them and they feel they have been unfairly dismissed. If you employed them before the 6th of April 2012, they only need one year of service to be eligible for an unfair dismissal claim.