Unfair dismissal in the United Kingdom is the part of UK labour law that requires fair, just and reasonable treatment by employers in cases where a person's job could be terminated. The Employment Rights Act 1996 regulates this by saying that employees are entitled to a fair reason before being dismissed, based on their capability to do the job, their conduct, whether their position is economically redundant, on grounds of a statute, or some other substantial reason. It is automatically unfair for an employer to dismiss an employee, regardless of length of service, for becoming pregnant, or for having previously asserted certain specified employment rights. Otherwise, an employee must have worked for two years.SI 2012/989 This means an employer only terminates an employee's job lawfully if the employer follows a fair procedure, acts reasonably and has a fair reason.
The Employment Tribunal will judge the reasonableness of the employer's decision to dismiss on the standard of a "band of reasonable responses" assessing whether the employer's decision was one which falls outside the range of reasonable responses of reasonable employers.HSBC Bank plc v Madden (case A1/00/2086) and Foley v Post Office (case A1/99/0746) ICR 1283, IRLR 827, Times Law Reports, 17 August 2000.
History In 1968, Lord Donovan led the Royal Commission on Trade Unions and Employers' Associations. This recommended a statutory system of remedies for unfair dismissal. The recommendation was put into the Industrial Relations Act 1971. Exclusive jurisdiction to hear complaints and give remedies was conferred upon the newly created National Industrial Relations Court. The Trade Union and Labour Relations Act 1974 soon replaced the unfair dismissal provisions, as was the National Industrial Relations Court with a system of Industrial Tribunals, since renamed Employment Tribunals. Often a tribunal is composed of one legally qualified Employment Judge (formally a "chairperson") and two lay members, one from an employee friendly background (e.g. from a trade union) and the other from an employer friendly background. However, more recently straightforward claims, such as unlawful deduction from wages claims, are dealt with by an Employment Judge sitting alone. Unfair dismissal rights were recast in the Employment Protection (Consolidation) Act 1978. The present law is found in the Employment Rights Act 1996.
Ridge v Baldwin AC 40, Lord Reid propounds the at will employment rule Malloch v Aberdeen Corp (No 1) 1 WLR 1578, on the right to be heard before dismissal
Dismissal
A dismissal may be lawful or wrongful (insufficient notice) at common law. It may or may not involve discrimination under statute. It may be actual (with notice or intention) or constructive (by fundamental breach). It may be fair or unfair under statute. It can be absolutely any combination of these. Accordingly, discrimination, wrongful dismissal and constructive dismissal are best dealt with separately. This article addresses the statutory concept of fairness.
Wrongful dismissal: in particular, a termination by the employer in breach of the employee's contract of employment (in other words a dismissal without notice, where the employer is obliged to give notice) is described as "wrongful dismissal", and not as unfair dismissal. Discrimination: Where an employee has grounds to believe that he or she has been discriminated against in being dismissed, the Equality Act 2010 may apply. (The Equality Act 2010 is a consolidating reform which repeals and replaces the Race Relations Act 1976, the Disability Discrimination Act 1995, the Equal Pay Act 1970 and the Sex Discrimination Act 1975). Constructive dismissal: Where the employee resigns or terminates their contract (without notice) due to some action on the part of the employer which would entitle the employee to terminate without notice (whether or not the employee actually gives notice), this is known as constructive dismissal. The normal circumstances in which an employee would be so entitled are in cases of a "fundamental breach of contract" (also known as a "repudiatory breach of contract") by the employer.
Substantive fairness Assuming the employee has proven dismissal, the first stage is to establish what was the reason for dismissal, e.g. was it a potentially fair reason or an automatically unfair reason.Employment Rights Act 1996 s98(1)(2) The burden of proof for this is on the employer.Adams v Derby City Council IRLR 163 If the employer pleads a potentially fair reason, the burden is on him to prove it.ERA 1996 s98(1) As mentioned above, it would have to be capability or qualifications, conduct, redundancy or statutory requirementsERA 1996 s98(2) or "some other substantial reason".ERA 1996 s98(1)(b)
The second stage is to establish whether the dismissal was reasonable, and that means whether the fair reason was sufficient to be also judged as reasonable.ERA 1996 s98(4) Even if the employer proves a fair reason, it often falls over on procedure when the tribunal looks at whether the decision was reasonable.
To be unreasonable though, the employer's conduct would have to be outside the band of reasonable responses of any reasonable employer. Roughly speaking, the conduct is reasonable if some decent employers would have handled it similarly, but unreasonable if no reasonable employer would have handled it the same or the dismissal was not based on an honest and genuine decision on reasonable grounds.St Anne's Board Mill Co Ltd v Brien ICR 444 The tribunal cannot take account of industrial pressure to sack somebody.ERA 1996 s107
If the employee proves that there could have been a competing reason then the burden shifts back to the employer to prove that their alleged reason was the main one.Maund v Penwith District Council ICR 143 The reason might not be as the employer said, as they might have been wrong on facts or law, short of evidence, or have been trying to be kind to the employee by dressing up capability as redundancy.Abernethy v Mott, Hay & Anderson ICR 323 The tribunal can decide the reason was different from what either party claims, as long as it gives the parties the chance to change their case.Hotson v Wisbech Conservative Club ICR 859 Employers can, at the risk of reducing credibility, plead alternative reasons.Smith v Glasgow City District Council ICR 176 Where the dismissal was the employee's fault and he knew it, a fake reason given by the employer does not automatically mean unfairness.Clarke v Trimco Group Ltd ICR 237
To prove the reason, the employer cannot dredge up what it did not know until after the termination, nor can it blame events that happened after termination,W Devis & Sons Ltd v Atkins ICR 662 although this could all be relevant to the remedy available, e.g. the compensation could be reduced to as low as nil. The employer can, however, take account of what happens between giving notice and termination.Parkinson v March Consulting Ltd ICR 276
Capability and qualifications Capability is mainly about ability, which can be affected by aptitude or training.ERA 1996 s 98(2)(a) Incapability is distinct from disability, where an employer must include and give reasonable adjustments to the disabled person under the Equality Act 2010. Incapability has also been distinguished from misconduct as being "sheer incapability due to an inherent incapacity to function".Sutton & Gates (Luton) Ltd v Boxall ICR 176 The underperforming,Fletcher v St Leonards EAT 1987, EAT 25/87 or unadaptable and inflexibleAbernethy v Mott, Hay and Anderson ICR 323 employee could be fairly dismissed on ground of capability. For incompetence, the employer must normally give a warning and time to improve unless it can prove the employee already knew what was required.Hollister v National Farmers' Union ICR 542 If the employee could not have improved then that is not necessarily an excuse not to warn and wait, but could justify a reduction in compensation,Polkey v AE Dayton Ltd ICR 142 although any reduction in compensation based on allegations that employment would have come to end anyway are subject to the tribunal asking the parties about the probability.Market Force (UK) Ltd v Hunt IRLR 863 If the employee has long service with no complaints or has just had a good appraisal it will take a while for the employer to prove it has given a fair chance of improvement or it may be impossible to prove incompetence. The employee may blame lack of training. If the employer supervises the remedial period too closely, the employee may claim constructive dismissal through bullying. If the employer issued a final written warning and then gave a long time for improvement, the employee may argue it is stale. The employer ideally needs complaints from customers and staff.
The qualifications ground will be viewed sceptically by tribunals, as if an employee was good enough to employ for two years to give him unfair dismissal rights, a claim that he is suddenly under-qualified may hint at there being another genuine reason, which would make the dismissal unfair on the grounds that the employee never had the chance to respond to the true reason. Unless the law requires the qualification or the employee lied about having it on his CV, this is not a likely ground for success.
Ill health can lead to an employee's incapacity in respect of their employment obligations. Illness is not misconduct so disciplinary procedures are not appropriate means to address employer concerns relating to an employee's ill-health. An employer may be able to end an employment relationship without dismissing an employee where the employee's functionality and capacity to undertake their work has been permanently compromised, however tribunals are wary of cases involving employers claiming to have experienced contractual frustration in preference to making reasonable adjustments required by law and addressing the issues within the framework of existing sickness policies in that organisation.
In the case of long term ill health, the employer should try to get medical reports and consult the employeeEast Lindsey District Council v Daubney ICR 566 and then is entitled to decide how long to wait for recoverySpencer v Paragon Wallpapers Ltd ICR 301 and whether it can give an alternative job.Merseyside & North Wales Electricity Board v Taylor ICR 185 If the employee does not give access to medical reports and does not accept alternative work the employer must still give a right of appeal against dismissal, even if it looked inevitable.Foster v Somerset County Council EAT 2003, EAT/0355/03 RN
For intermittent absences the employer should consider alternative work, and whether it cannot reassure itself of a recovery time, factor in the percentage of time absent and the effect on colleagues,Lynock v Cereal Packaging Ltd ICR 670 warn the employee early on what is required and what will happen if not adhered toRolls-Royce Ltd v Walpole IRLR 343 and allow representations,International Sports Co Ltd v Thomson IRLR 340 and warn the employee when the time has come to stop being absent or lose their job. Because the employer cannot obtain a prognosis for intermittent unrelated absences it can set an acceptable attendance standard and dismiss if it not met.Lynock v Cereal Packaging Ltd
Any dismissal based on disability that is discriminatory is unlawful.Equality Act 2010 ss 6, 13-15 and 39 If an illness is a disability (because it hinders the employee in professional life) the employer has to make reasonable adjustments, which might mean sick pay, redistributing work, giving him a vacancy, being flexible in hours, etc. An employer must implement systems that favour the disabled person. For example, a disabled employee must be given priority over other better suited applicants if there is a vacancy for a more suitable job to his disability.Archibald v Fife Council UKHL 32