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29th January 2025
Employee dismissal is an unfortunate but sometimes necessary aspect of running a business. When considering an employee dismissal, it is critical to ensure that any decision made is fair and legal. A fair dismissal process protects employees’ rights and the company from potential costly legal challenges.
In this informative post, we will discuss at what constitutes a fair dismissal, the common grounds for dismissal, and the correct procedure employers must follow to ensure they remain in compliance with employment law.
Fair dismissal in the workplace occurs when an employer terminates an employee’s contract of employment for a valid reason using a fair and legally compliant process. It ensures that the dismissal is justified, non-discriminatory, and carried out with transparency and respect for the employee’s rights.
Common grounds for fair dismissal in the workplace
There are five common reasons for fair dismissal. These are:
A fair dismissal on the grounds of capability or performance occurs when an employee is unable to meet the role’s required standards.
This may be due to a lack of skills, qualifications, or experience required to do the job effectively. Employers are generally expected to provide assistance, such as training or reasonable adjustments, before considering dismissal.
For example, an employee who is having difficulty adjusting to new software may be offered training. However, if this measure fails and the employee continues to underperform, dismissal may be considered fair.
Dismissal for conduct is appropriate when an employee’s actions violate workplace rules or policies.
This can include serious misconduct, such as theft, fraud, or violence, or repeated instances of minor misconduct, such as persistent lateness or unauthorised absences after warnings.
Employers must thoroughly investigate the alleged misconduct and ensure the employee is given a chance to respond before any action is taken.
If an employee is accused of harassment, for instance, the employer must collect evidence and hold a fair hearing before making a decision. Only after completing these steps can a dismissal for conduct be considered fair.
Redundancy occurs when an employee’s job is no longer required, which is often due to business restructuring or economic pressures.
For instance, a downturn in business might leave an organisation with no choice but to evaluate which aspects of the business generate the highest revenue and consider closing underperforming departments to ensure financial stability.
To ensure fairness, employers must follow proper redundancy procedures, such as consulting with affected employees, investigating alternative roles within the company, and providing redundancy pay where applicable. Dismissal for redundancy is fair only if the process is transparent and consistent.
A dismissal for breach of legal requirement occurs when an employee no longer meets UK work requirements, and their employment violates the law. For example, a delivery driver who loses their driver’s license or an employee whose work visa expires may no longer be legally able to perform their duties.
In such cases, the employer must consider other options, such as reassigning the employee to a different role, before proceeding with dismissal.
Fair dismissal on this ground requires evidence that continuing employment would violate the law, making it a necessity rather than a choice.
The category of “some other substantial reason” (SOSR) includes legitimate but uncommon reasons for dismissal that do not fit into the other categories.
Examples include situations where an employee’s actions create a serious conflict of interest or where a refusal to accept reasonable changes to their employment terms disrupts business operations.
An example of this is if a company relocates and an employee refuses to move despite reasonable accommodations, dismissal may be considered fair. Similarly, an employee in a high-profile role whose behaviour damages the company’s reputation might also fall under this category.
To justify dismissal under SOSR, employers must demonstrate that the reason is both substantial and genuine, as well as follow a fair process.
For a dismissal to be considered fair, employers must follow a legally compliant process that ensures respect for the employee’s rights. Here is a step-by-step guide to the fair dismissal process:
The first step in the fair dismissal process is to ensure that the termination of employment is for a legitimate and justifiable reason. Employers must carefully consider whether the issue warrants dismissal, and if so, ensure that it is has been properly documented.
Before making any decisions, employers must conduct a thorough investigation of the situation. This involves gathering all relevant facts, such as reviewing evidence, speaking with witnesses, and consulting any relevant policies or procedures. The investigation should be conducted impartially to ensure that the employer fully understands the situation.
Once the investigation is complete and there is a case to address, the employer must formally notify the employee in writing of the concerns or allegations made against them.
This notice should include a clear description of the problem, evidence supporting the claim, and potential consequences. Additionally, the employer should invite the employee to a formal meeting or hearing, giving them enough time to prepare their response.
A disciplinary or consultation meeting must be held to give the employee the opportunity to present their side of the story. This meeting allows the employee to explain their actions, provide mitigating factors, or question the evidence presented. Employers must conduct this meeting in a fair and impartial manner, allowing the employee to be accompanied by a colleague or trade union representative if desired.
After reviewing all the evidence, including the employee’s response during the meeting, the employer must determine whether dismissal is the best course of action. The decision should be reasonable, proportionate to the issue, and consistent with how similar cases have previously been handled. If dismissal is deemed necessary, the employer must clearly document the reasons for the decision and communicate them to the employee.
To ensure the fairness of the procedure, the employer must inform the employee about their right to appeal the dismissal decision. The appeal process should include an impartial review of the case by someone who was not involved in the original decision.
If the dismissal is upheld, the employer must give the employee the notice period specified in their contract of employment. Alternatively, the employer may choose to offer payment in lieu of notice, depending on the circumstances and contract terms.
Employers must comply with all legal and contractual obligations during the dismissal process. This includes ensuring that the employee receives any statutory payments, such as redundancy pay, unpaid wages, or accumulated holiday pay. Employers should also follow any specific dismissal procedures outlined in their employment contracts or employee handbooks.
Throughout the dismissal process, employers should keep detailed records of all actions, such as investigation notes, correspondence, meeting minutes, and the final decision. These records are critical for demonstrating procedural fairness and can be extremely useful if the dismissal is later challenged in an Employment Tribunal or court.
Mistakes in the fair dismissal process can result in claims of unfair dismissal, which can be expensive and damaging to a company’s reputation.
Unfair dismissal occurs when an employer terminates an employee’s contract without a valid reason or fails to follow the correct legal process. Common examples include dismissals based on discrimination, retaliation for whistleblowing, or dismissing an employee without adequate warnings or opportunities to improve.
Employees who have worked for a company for over two years are protected under employment laws, such as the Employment Rights Act 1996 in the UK, which requires employers to provide a fair process and legitimate grounds for termination.
If an employee believes they have been unfairly dismissed, they may challenge the decision by filing a claim with an Employment Tribunal. Successful claims may result in compensation, reinstatement in their job, or re-engagement in a similar role.
At Sapphire HR, we specialise in providing expert guidance to ensure that your business handles dismissals correctly.
We take the stress out of navigating this complex area by advising on procedures and managing the HR aspect of dismissals on your behalf.
Whether you need help with investigations, documentation, or conducting disciplinary meetings, our team is here to help you protect your business while treating employees with fairness and respect.
Contact us today to learn more about how we can support you with our HR services.
Here to Help, Not Replace Experts:
The information contained in this blog presented for general informational purposes only. While we strive to provide accurate and up-to-date content, legal and HR practices can evolve rapidly. This blog is not a substitute for professional advice.
For specific questions or concerns regarding your unique situation, we highly recommend taking professional advice and booking a consultation with a Sapphire HR Consultant. Our consultants are experts in the field and can provide tailored guidance to address your specific needs.
We aim to work truly in partnership with our client organisations and to develop a high-quality, competent HR Service for all clients, the HR Provider that they can rely on and who gets to understand the culture and vision of your business.
