What is unfair vs fair dismissal?
UK law is known for its emphasis on protecting workers’ rights, so dismissing a permanent employee without following the appropriate procedures can have legal repercussions.
1. Unfair reasons for dismissal
Public sources note that dismissing an employee without a valid reason or without following appropriate procedures may be considered unfair under UK employment regulations. Employees with sufficient continuous service may have the right to challenge a dismissal under certain circumstances.. There are certain circumstances under which an employee can still make an unfair dismissal claim without having worked for your company for two years – this is considered an automatically unfair reason for dismissal.
2. Fair reasons for dismissal
If you have a valid reason for needing to dismiss your employee, and it’s one that the UK government has predetermined as valid, this can lay the foundation for a fair reasons dismissal. Employers typically follow specific steps in the dismissal process to help ensure consistency. Below, we look at possible fair reasons to dismiss an employee and the procedures to follow.
Fair reasons for dismissal in the UK
Fair reasons for dismissal in the UK can be roughly broken down into five categories.
1. Conduct
A dismissal on the grounds of misconduct relates to unacceptable behaviour by an employee. Typically, this behaviour needs to be ongoing, with attempts to address it unsuccessful. In some situations, certain behaviours may warrant more immediate action, depending on company policy and applicable rules. Dismissal related to conduct is often discussed in three broad categories:
1.1 Misconduct
General misconduct can include behaviours such as repeated lateness, frequent absences without a proven reason, insubordination, not following instructions, unprofessional conduct with colleagues or clients, a poor attitude or rude behaviour, minor breaches of company policy or misuse of company equipment. One-off or minor incidents of this type are not usually considered grounds for dismissal.
1.2 Gross misconduct
Gross misconduct is far more serious than general misconduct. Public sources indicate that some employers treat a single incident of gross misconduct as potentially sufficient grounds for dismissal, depending on internal procedures and relevant circumstances.
Examples of gross misconduct include theft or fraud, other illegal activities, physical violence or verbal abuse, harassment (including sexual harassment) or discrimination, purposeful damage to company property, use of drugs or alcohol at work and serious breaches of health and safety regulations, confidentiality or data protection, among others.
1.3 External misconduct
Misconduct outside of work can be grounds for a fair dismissal if the behaviour impacts the employee’s professionalism or performance (e.g. drug use) or damages (or has the potential to damage) your company’s reputation. Clear conduct and social-media policies can help employees understand expectations. Including a social media policy addressing online behaviour and monitoring and enforcing conduct policies can help your teams to remain compliant.
2. Performance and capability
An employee being unable to perform their job to the required standard can also be considered a fair reason for dismissal.
2.1 Performance
Consistent performance concerns may lead to a dismissal process, and many employers first explore opportunities for improvement. Poor performance generally refers to an employee’s inability to keep up with the role’s demands, carry out expected duties and meet KPIs. Depending on the circumstances, employers may choose to issue warnings or offer support before proceeding, provide the employee with extra training or place them on a performance-improvement plan with measurable objectives before proceeding with dismissal.
2.2 Capability
Capability refers to whether an employee is able to perform the duties required for their role. Dismissing an employee on the grounds of capability is a very delicate matter. Understanding the reasons behind performance issues can help ensure decisions are consistent with equality and workplace policies, such as a physical or mental disability or illness. Many employers treat dismissal as a last resort, depending on their internal policies and the situation. Some employers choose to seek occupational health input or explore reasonable adjustments, depending on the situation, request a medical report, make reasonable adjustments to support the employee in their job or consider alternative roles in your company for the employee.
Related: What is malicious compliance?
3. Redundancy
Redundancy is possibly the most straightforward reason for a fair dismissal. Over time, businesses may determine that there is no longer a need for certain roles and that continuing to employ people in such positions full-time is not cost-effective. The business may decide to make that role and the employee performing it, redundant. Companies in financial difficulty can also decide to make some of their less critical roles redundant to stay afloat. The third situation in which redundancy can occur is when an entire company, department or branch is closing down.
Many employers also explore whether other suitable roles may be available the affected employee could potentially move to within the company. When roles are made redundant, employers typically avoid recruiting for an identical position immediately afterward.
Related: What are boomerang employees?
4. Statutory illegality
This refers to circumstances under which it would be illegal to continue employing the person in their role. Examples include a foreign employee who loses their right to work in the UK or has their work visa run out, an employee whose duties involve driving losing their driving licence or an employee being convicted of a crime when their role legally bars people with criminal records (e.g. they work with vulnerable people).
Related: 10 key steps to a background check: a guide for employers
5. Some Other Substantial Reason (SOSR)
This category is broad and includes reasons that do not fit into the other categories. Reasons could include the non-renewal of a fixed-term contract, business reorganisation needs, a significant breakdown in trust, conflicts of interest and interpersonal conflict involving important clients or stakeholders, among others. Some employers consult qualified professionals for guidance when navigating complex dismissal situations.
What reasons are considered an unfair dismissal?
Public sources indicate that dismissing an employee for any of the following reasons may be treated as unfair under UK employment regulations. The employee:
- Requested flexible working or reasonable adjustments
- Resigned with the correct notice period
- Joined a trade union or took part in legal industrial action (lasting 12 weeks or less)
- Was called up for jury service
- Is pregnant, on parental leave or has requested parental leave
- Reached retirement age
- Exposed wrongdoing in the workplace (whistleblowing)
Disciplinary procedures for a fair dismissal based on conduct
Dismissing an employee on the grounds of misconduct or gross misconduct, it is important to follow a procedure to help ensure you remain fair. Some of these steps may also apply to performance-related or SOSR dismissals.
1. Investigation
Investigate any allegations thoroughly to gather and verify facts.
2. Warnings or suspensions
Verbal or written warnings are often necessary for general misconduct or poor performance, giving employees notice of potential dismissal and an opportunity to improve. In some cases involving serious allegations, employers may choose to suspend an employee while the matter is reviewed.
3. Disciplinary hearing
Depending on the severity of the allegations, a hearing is typically required for cases of gross misconduct, allowing the employee to present their side of the story.
4. Outcome
Depending on the findings and circumstances, some organisations may decide to move forward with dismissal in line with their policies and current official guidance. In cases of gross misconduct, once the disciplinary hearing concludes, some organisations may proceed with immediate dismissal, depending on their policies and the relevant circumstances.
Understanding the distinction between fair and unfair dismissal is important to maintaining legal and ethical standards in your business. Fair dismissal is a delicate process requiring careful consideration of the reason and following procedures to ensure a respectful and transparent process for everyone involved.
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