Under common or contractual law an
employer can dismiss an employee at any
time, although a period of notice must
normally be given (save in cases of
gross misconduct) or a payment in lieu
of notice is made. However, employees
with sufficient continuity of service*,
have the right not to be unfairly
dismissed. In such cases a dismissal
will only be lawful if it is for a fair
reason and the employer has acted
reasonably in all the circumstances
which usually involves following certain
statutorily laid down procedures. The
following examines the levels of notice
which must be given and the reasons for
dismissal which are legally considered
to be fair.
*the existing requirement
is that an employee must have at least
one years’ continuous employment.
However, there are circumstances such as
dismissal for a Trade Union activity, a
Health and Safety reason, or dismissal
on the grounds of pregnancy, etc. where
the pre-requisite one years’ continuous
employment is not required.
What notice must an employer give?
The minimum levels of notice which an
employer must normally give to an
employee are laid down in the Employment
Rights Act 1996 and depend upon the
length of time the employee has been
continuously employed, as follows:
- Less than 4 weeks continuous
employment - 24 hours’ notice.
- 4 weeks to 2 years continuous
employment - 1 week’s notice.
- 2 years to 12 years continuous
employment - 1 week’s notice for
each complete year of continuous
employment
- more than 12 years continuous
employment - 12 week’s notice
If the employee’s contract provides
for a longer period of notice than the
above statutory minimum periods of
notice, the longer contractual period of
notice will apply. The contract may also
provide that a payment may be made to
the employee in lieu of notice.
However, if an employee is guilty of
serious or gross misconduct the employer
may be justified in instantly dismissing
the employee without any period of
notice at all.
What payment is an employee entitled
to during their notice period?
An employee is entitled to be paid at
their normal rate of pay. They are also
entitled to receive any contractual
benefits (express or implied) which they
ordinarily enjoy such as use of a
company car, mobile phone, etc. This
applies regardless of whether the
employee is away from work on sick
leave, holiday or maternity leave during
the notice period, or if they are
willing to work but no work is provided.
If a proportion of their pay is made up
of commission then issues will arise if
they are not permitted to work during
their notice period (see bonus and
commission section).
When will a dismissal be fair?
A fair dismissal involves two
criteria both of which must be
satisfied.
Firstly, the dismissal must be for
one of the following reasons:
- the employee is unable or
unqualified to do the job in hand
(e.g. long term sickness absence)
- the employee’s conduct is
unsatisfactory (e.g. poor
attendance)
- the employee is legally
prevented from continuing to carry
out their job (e.g. a van driver who
loses their licence)
- redundancy (e.g. due to closure
of premises)
- some other substantial reason
(e.g. a refusal to agree to a
necessary and reasonable change in
terms and conditions of employment).
Secondly, the employer must act
reasonably in all the circumstances in
deciding to dismiss the employee. There
are now certain statutory procedures
governing disciplinary matters and
redundancy which must be followed or the
dismissal will be automatically unfair
and will result in higher awards of
compensation. All dismissals usually
involves following certain procedures
and may involve consideration by the
employer of alternatives to dismissal
(e.g. transfer to a different job or
different duties in cases of poor
performance or redundancy). Each case
will depend on its own facts although
matters such as the size and resources
of the employer will be taken into
account.
Can a dismissal be automatically
unfair?
It is automatically unfair to dismiss
an employee, regardless of their length
of service, for any of the following
reasons:
- being (or not being) a member of
a trade union or taking part in
trade union activities
- being pregnant or taking
maternity leave
- taking certain types of action
on health and safety grounds
- seeking to enforce another
statutory employment right (e.g.
asking for a written statement of
employment rights)
- refusing (in certain
circumstances) to do shop or betting
work on a Sunday
- reasons connected with the
transfer of an undertaking from one
employer to another (unless
justified on economic, technical or
organisational reasons involving a
change in the workforce)
- acting (or volunteering to act)
as a consultation representative for
other employees in a redundancy
exercise or business transfer
A dismissal will also be
automatically unfair in the case of an
employee who has at least one year’s
continuous employment if the employer
has failed to follow the statutory
procedures for disciplinary matters or
redundancy situations. In such cases the
normal award of compensation to the
employee by a Tribunal can be increased
by as much as 50%.
What are the penalties involved for
an unfair dismissal?
If an Employment Tribunal decides
that a dismissal is unfair it may order
the employer to re-employ the employee
or, more usually, to pay the employee
compensation. The amount of compensation
consists of a basic award calculated in
a similar manner to a redundancy
payment, and a compensatory award based
on the employee’s loss, which can be
well in excess of £50,000.
Conclusion.
Employers should always take advice
prior to dismissing an employee as the
procedures involved are complex, even
where the reasons for the dismissal e.g.
redundancy or misconduct, appear clear
cut. Failure to do so may not only mean
that the dismissal is unfair, but may
result in a higher award of compensation
against them.
Equally, employees should always seek
advice when dismissed as there may be
matters relating to the procedure
followed by the employer in relation to
that dismissal which would make it
unfair. This is especially so in cases
of dismissals for redundancy, even where
the employer has gone into
administration.
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