What Is Automatic Unfair Dismissal & How Can It Affect You

Automatic unfair dismissal is a vital part of employment law, and we’ll cover its nuances in this article. When considering a claim for automatically 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. Generally, employees cannot claim unfair dismissal until an organisation employs them for at least two years.

Automatically unfair dismissal examples can include the dismissal of a staff member, and the circumstances given fall under one or more of the categories featured below. Through automatically unfair dismissal case law, 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 dismissal, and there are several grounds for which an employee can claim unfair dismissal discrimination. 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 extends to all reasons relating to maternity/paternity leave, parental and adoption leave, and time off for dependants.

Compulsory retirement on the grounds of age is also automatically unfair dismissal unless you can objectively justify it – but this could be challenged at an Employment Tribunal. All the above are valid reasons for declaring automatic unfair dismissal.
What Do They Consider Automatically Unfair Reasons For Dismissal?
Should an Employment Tribunal determine that the claim made against you is automatically unfair dismissal, you cannot defend the claim. Whether you acted reasonably won’t matter; if the claim is substantiated, you will most likely lose the case.

They may expect either/or:
- Reinstatement after unfair dismissal.
- Automatic unfair dismissal compensation.
Automatic unfair dismissal compensation will usually depend on your employee’s:
- Age.
- Gross weekly pay.
- Their length of service.
The amount of compensation an Employment Tribunal can award for automatic unfair dismissal is limited, apart from in cases relating to dismissals for a discriminatory reason or for raising a health and safety complaint.
Automatically Unfair Dismissal Case Law: McMahon v Heron Financial Limited 2020

Automatic unfair dismissal discrimination can be a significant issue for an employer. If you get things wrong and don’t follow the law, it can financially damage your reputation. Below, we can look at the Mrs McMahon v Heron Financial Limited case. The law on automatically unfair dismissal is strict to protect the employee and employer.

Mrs McMahon began her employment as a mortgage protection adviser with Heron Financial Limited in June 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 the 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 her reasons for 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 previously been 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 automatic unfair dismissal compensation. £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.

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Automatic Unfair Dismissal FAQs

What is 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 of 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, abysmal 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 or 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 automatic unfair 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 began working with you after April 6 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 dismissed unfairly. 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.