An employer’s guide to unfair dismissal and tribunals

If one of your ex-employees were to claim unfair dismissal, would you know what to do?

Employment disputes and tribunals may come at a high cost, in terms of both money and your relationship with other employees.

If you do find yourself in a situation where you’re being accused of wrongdoing, it’s important to act quickly and correctly to protect your business, your reputation and staff morale.

To do this, you should understand the procedure involved and the rights of both your employees and yourself as business owner.

What are ‘unfair dismissal’ and ‘wrongful dismissal’?

It’s important to know the difference between unfair dismissal and wrongful dismissal. Unfair dismissal is when an employee is dismissed from their job without a good enough reason.

Wrongful dismissal is when an employee is sacked on reasonable grounds, but the employer failed to follow the correct procedures.

Fair grounds for dismissal include:

• Poor performance
• Inability to do the work
• Legal reasons why the employee cannot do the work
• Gross misconduct
• The role is no longer required (redundancy)

Even if the reason for dismissal falls into one of these categories, an employee may still dispute the fairness of it.

For instance, they may not agree that their performance has been poor, or there may be mitigating circumstances such as illness, stress, injury, workplace bullying or discrimination.

Issues like these may point the finger of blame back at you, the employer, so it is wise to tread carefully and ensure your case is strong before taking action.

What are the grounds for unfair dismissal?

Any dismissal for discriminatory reasons, be it race, age, sex or any other reason, is unfair.

Employers must also be careful not to dismiss anyone based on a disability affecting their work or causing them to take sick leave.

If any of your employees have disabilities, it is your responsibility to take reasonable measures to make sure they’re not at a disadvantage and that their working environment is safe and comfortable.

Other potential reasons for unfair dismissal could be if you end someone’s employment because they asked for maternity or paternity leave, requested flexible working hours or refused to give up their statutory rest breaks.

It’s also unfair to dismiss someone because they take part in industrial action (i.e. go on strike) for less than 12 weeks. These are just a handful of examples.

There are numerous other circumstances in which dismissal is unfair, so do seek legal advice if you are thinking of dismissing an employee.

What is the fair procedure for dismissing someone?

Even if the grounds for dismissal are fair, you need to follow correct procedure for it to be lawful. Make sure you have up-to-date employment contracts that set out your dismissal procedures.

Every employer should follow the Advisory, Conciliation and Arbitration Service code (Acas) when dismissing someone.

It’s often called a disciplinary procedure, and serves to give employees adequate warning and the chance to keep their jobs if they change their behaviour. There are five steps to dismissal in the Acas code:

Investigation

You should look into the reasons why you want to dismiss an employee and make sure they are factually correct.

It’s helpful to gather evidence here, whether that’s from timesheets, CCTV or email communications, but only if you legally have access to these.

Write a letter

You must give the employee a written formal warning that unless they change their behaviour they will be dismissed.

Arrange a meeting

Organise a meeting where you can discuss why you think the employee is unable to continue working for you.

Give them the chance to defend themselves or demonstrate how they will change. They’re allowed to bring another person with them to this meeting, such as a colleague or union representative.

Your decision

You need to tell the employee whether you think they should be dismissed or able to continue their employment.

This should be in a formal letter that includes information on how to appeal this decision if they wish.

Give the employee a chance to appeal

The employee should be able to explain why they believe they should continue working for your company, and, ideally, another person should make this second decision.

You may consider it prudent to give the employee an opportunity to right any wrongs before coming to your final decision.

What happens in an unfair dismissal claim?

To bring an unfair dismissal claim against you, normally an employee must have worked for you for at least two years.

The exception is when they consider they have been the victim of discrimination, in which can they can bring such a claim at any time.

The employee may come directly to you to contest their dismissal, which gives you the chance to settle the matter quickly.

You and your employee may decide to use the Labour Relations Agency or an independent arbitrator to reach a settlement, which can help you prevent a tribunal and make the process smoother and more cost effective. 

If this approach is not successful, the employee is entitled to raise the issue through an employment tribunal.

They must inform Acas that they want to raise a claim, and Acas will offer them the chance to settle it through the free Early Conciliation service.

Should you fail to reach an agreement through this process, the claim may go to an employment tribunal. In a tribunal, a judge will make a decision based on the evidence you and the other party present.

If the judge agrees that the dismissal was unfair, you would normally have to give the ex-employee compensation. You will certainly want to appoint a specialist solicitor if a case comes to tribunal.