Dismissing an Employee – Advice for Employers

There are five grounds on which an employee can be fairly dismissed, as follows:

• Conduct, where an employee’s behaviour has not been acceptable or appropriate
• Capability, where the employee is not deemed able to carry out the job
• Redundancy, where the position is no longer required
• A legal reason, where the employee cannot do their job legally, for example, a delivery driver who has lost their driving licence
• Some other substantial reason, where there is another fair reason to dismiss an employee, for example, a client will not work with the employee

Once an employer has established that they have a valid reason for the dismissal, they need to follow a full and fair procedure. This could be a disciplinary and grievance procedure or a redundancy procedure.

In both cases, there are several stages that must be gone through. The process should, as a minimum, follow the Acas guidelines. If, as an employer, you have an employee handbook, you must follow the steps set out in there.

If a dismissal is based on a valid reason, but as an employer, you fail to follow a proper process, then your employee may be able to claim unfair dismissal.

There are also a number of automatically unfair reasons for dismissal, including dismissals based on:

• Requesting flexible working
• Being pregnant or on maternity leave
• Asking for family leave
• Being a trade union member or representative
• Requesting something to which an employee is legally entitled
• Whistleblowing
• Taking action over a health and safety concern

Where an employee feels that they have no choice but to resign because of unfair treatment, they may potentially be able to claim constructive dismissal.

Unfair dismissal is when an employee’s employment is ended without a fair reason or where there was a fair reason, but the employer did not follow the correct process.

Where the reason given for the dismissal was not true or was automatically unfair or where the employer has been unreasonable in dealing with the dismissal process, then an employee may be able to claim unfair dismissal.

Wrongful dismissal occurs when an employer breaches the employee’s contract, for example, failure to give the correct amount of notice as stipulated in the contract. The employee will be entitled to claim damages for any losses they have sustained. In some cases, employees may be able to recover more under a wrongful dismissal claim than under an unfair dismissal claim, as damages for breach of contract could exceed the compensation for loss of earnings that might be payable for unfair dismissal.

Where an employee is made to feel that they have no alternative but to resign because of a serious breach of contract on the part of the employer, they can claim constructive dismissal.

The breach needs to be fundamental and either a breach of the terms of the contract or a breach of the trust and confidence between employer and employee.

Examples include reducing an employee’s salary, manifestly unreasonable disciplinary proceedings, harassment or bullying, ongoing stress that has not been addressed or being required to work in the face of health and safety breaches.

It is crucial to follow the proper process from the start. This involves establishing a valid reason and going through a procedure similar to that contained in the Acas Code of Practice on disciplinary and grievance procedures.

The employee should be informed of the issue in writing, and a meeting held, at which the employee should be allowed to bring a fellow worker or trade union representative.

Following the meeting, the employer will need to consider what the appropriate action is. It is crucial to ensure that the correct warnings are given. Moving to dismiss an employee without this could give them grounds to claim unfair dismissal.

A settlement agreement offers a way of ending a period of employment quickly and cleanly. The employer will generally pay a lump sum to the employee, and in return, the employee will waive most of their rights to bring a legal claim against the employee.

You can also include a payment in lieu of notice, so the employee could leave without having to work out their notice period.

You will need to decide whether this is worth paying for and, if so, how much you are prepared to offer the employee. Our employment team will be able to advise you as to whether a settlement agreement is needed and if so, draft this on your behalf.