5 fair reasons for dismissal (And how the process works)

By Indeed Editorial Team

Published 5 September 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Employee dismissal occurs when a company has to let go of staff for the good of the business. If your employer terminates your job contract, they follow certain procedures to ensure the dismissal is fair. Learning about these procedures and how the dismissal process works helps you understand why the company opts for the dismissal. In this article, we discuss five fair reasons for dismissal, explain how the process works and provide tips for dismissal.

What are reasons for dismissal?

There are many legitimate reasons for dismissal that an employer may cite when dismissing a staff member. Here are five:

1. Conduct

Companies and organisations normally have policy documentation and guidelines that clearly state what constitutes conduct within the work environment. If an employee performs a single act of misconduct, it can result in a fair dismissal. This is anything from harassment, bullying and insubordination to unexplained absence and poor attendance. There are three types of misconduct within the corporate world:

General misconduct

This form of misconduct is less serious and employees may get away with it after making necessary changes. For example, if a professional is always late and regularly misses working days, their employer can ask them to improve their attendance as a warning. If they don't, the misconduct results in a fair dismissal. In most cases, general misconduct requires a series of warnings before dismissal and the employee receives full payment or notice in lieu. General misconduct varies between companies, so identify what constitutes it within the organisation.

Related: What is a verbal warning? (Plus how to give one and tips)

Gross misconduct

This form of misconduct is more serious in nature and includes acts that are detrimental to the business. These can be violence, fraud, serious insubordination and gross negligence. Unlike general misconduct, which requires employers to give several warnings, gross misconduct does not. The employer can terminate your contract immediately without notice and you may not receive your full payment.

Misconduct outside of work

It may be potentially fair to dismiss an employee for misconduct outside of the workplace setting. This only works if there's evidence that the professional's acts have negatively impacted their work, performance or business, for example, if the misconduct tarnishes and damages the employer's brand. This type of dismissal is becoming more and more popular with the increased use of social media.

Related: Code of conduct examples in the workplace and why to use them

2. Capability or performance

Employers can fairly dismiss employees for a reason related to their performance and capability. This includes their aptitude, skill, physical or mental quality and even health. Although there are more positive ways to address poor work performance and incapability issues, many employers opt for the dismissal route. This is because they relate to the employee's lack of ability to do the job they're recruited to do. Here are some essential things to note about dismissal due to capability or performance:

Dismissal for health

Some cases of dismissal for ill-health can result in unlawful disability discrimination. For example, if your employer dismisses you because of a disability that affects your performance, you may be able to sue them for unlawful discrimination, even if the dismissal is legally fair. Such dismissals require employers to consider workplace adjustments or alternative roles before dismissing the employee. A medical report may be requested with the employee's permission regarding their state of health.

Dismissal on capability

If an employer seeks to dismiss an employee on capability grounds, they follow a fair procedure first. This mostly includes giving them a series of warnings to improve before making any decision to dismiss. It also involves providing the employee with extra training, placing them on a formal performance improvement plan and setting achievable objectives. The employer tracks their progress regularly and if there are no changes, they can fairly dismiss them.

3. Redundancy

Redundancy occurs when companies and organisations make certain positions redundant due to a reduction in the workforce required. This results in the fair dismissal of employees in these positions or roles. Redundancy is a fair reason for dismissal if the employer follows the right procedures. This typically includes a consultation process and consideration of alternative work for the employee before dismissal. Employers can also dismiss staff on the grounds of redundancy due to business or workplace closure. Other examples of dismissal for redundancy include:

  • when there's less work for staff to complete

  • when there's a change in location

  • when the business doesn't require one particular role or function

  • when there's a reorganisation of work and there are new roles

4. Statutory illegality or breach of a statutory restriction

Companies and organisations can fairly dismiss employees if it becomes illegal or a statutory breach for them to continue working within their position. For example, if a professional loses their licence and has to drive to work, the company can dismiss them to remain compliant with the law. Other examples of dismissals that fall in this category include:

  • if the employee's right to work within the country expires or their work visa expires

  • if the employee loses or doesn't have a qualification required to do the job

  • if the employee has a recent criminal record

5. Some other substantial reason or SOSR

The SOSR category comprises any other reasonable reasons that don't fall/fit under the other standard categories. There isn't a legal definition for the dismissals in this category, but some common examples include:

  • if the term of the fixed-term contract expires

  • if original employees return and the company had recruited temporary staff, such as maternity cover

  • if a client refuses to work with a certain employee and there's no other position available for them

  • if an employee doesn't agree to a company's change to terms and conditions

  • if there's a significant conflict of interest, such as a senior employee with a partner who works for the company's primary competitor

  • if there's a personality clash that causes substantial issues for the business

The dismissal process

Here's how the dismissal process works:

Investigate the issue

The first step of the dismissal process is the investigation, where the employer establishes the facts of the case. The investigation highlights what the employer may believe the employee has done wrong by compiling data and documentation to support their claim. For example, if an employee is always late, the employer can use shift check-ins to show when and how many times the employee came into work late.

Related: Tips for dealing with employees that arrive late to work

Send an initial letter

After conducting the investigation, the employer informs the employee what the issue is in writing. This initial letter serves as the first formal warning, informing the employee they're not meeting the company's expectations. The employer can also send an email detailing the problem.

Related: Written warning at work: what it means and how to respond

A dismissal or disciplinary meeting

Once the employer informs the employee of the problem, they schedule a dismissal meeting. This meeting gives the employee the opportunity to defend themselves against the claims made. Employers give employees reasonable time to prepare for the dismissal meeting. Failure to do so can result in an unfair dismissal and lawsuit. During the meeting, the employer explains what the employee is accused of and provides any evidence they have. If the employee can't get to the meeting, they tell their boss with sufficient notice to reschedule and prepare.

Decision making

After the disciplinary meeting, the employer decides on the appropriate action for the employee. They can either decide to dismiss you immediately or give you a second chance to prove yourself and make amends. Companies normally send the dismissal decision to the employee in writing and they're required to mention that you can appeal and how to do it.

Appeal

Once the employer makes their decision, the employee gets a chance to appeal the results of the disciplinary meeting. This allows you to dispute the case, especially if you disagree with the company's decision and think it's a wrongful or unfair dismissal. Another individual other than the original employer usually appeals the case to ensure the entire process is fair.

Tips for employee dismissal

Here are some tips to help you with your employee dismissal process:

  • Bring someone with you to the disciplinary or appeal meeting to take notes and for support.

  • Familiarise yourself with your company's dismissal process and your rights during dismissal to ensure the process is fair and legal.

  • Ask your employer for more information regarding the dismissal.

  • Avoid involving other people in your dismissal, such as colleagues and friends.

  • Review the documentation the company provides as evidence for your dismissal. You can even hire a lawyer to help you with the case.

  • Ensure your employer provides a valid reason for your dismissal in writing and ask them to provide one if they don't at first.

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