What is Unfair Dismissal?

Unfair dismissal is where an employee loses their position without lawful reason.

What is the meaning of unfair dismissal?

Unfair dismissal is when an employee’s contract of employment is terminated unfairly.

What are the 5 fair reasons for dismissal?

The law (Employment Rights Act 1996) sets out the following potentially fair reasons to dismiss an employee:

• Conduct (ie misconduct/gross misconduct)
• Redundancy
• Capability (in terms of performance/ability and in terms of ill health)
• Illegality (ie if the employee doesn’t have the right to work in the UK, or to employ the employee is a breach of some statutory regulation etc)
• “Some other Substantial Reason” (SOSR) that means it is fair to dismiss the particular employee in the particular circumstances

Anything else will be deemed unfair.

Remember that as well as having a fair reason to dismiss, the employer must also follow a fair procedure before deciding to dismiss.

What is an example of unfair dismissal?

Using a redundancy dismissal as an example, this would be ‘unfair’ if the proper processes for redundancy were not followed. This might include failure to follow a selection process, or to select somebody for an unlawful reason (eg sex or race discrimination).

Is insubordination unfair dismissal?

Insubordination is typically where an employee is disrespectful toward their employer, and/or refuses to do as they are asked. It may well form the basis of a fair dismissal. But, the employer must follow a proper disciplinary process.

> Read more about insubordination.

Who can claim unfair dismissal?

Only employees can claim unfair dismissal – so not independent contractors, or “workers”.  Those individuals may have other types of claims arising from a termination but it won’t be for unfair dismissal.

Generally, only employees with more than 2 years’ continuous employment have unfair dismissal rights, which means they are entitled not to be unfairly dismissed. However, in some types of unfair dismissal claim, employees don’t need 2 years’ service, such as where they are claiming that they were dismissed because they made protected disclosures (i.e. whistleblowing claims).

Is it hard to prove unfair dismissal?

The law says that it is fair to dismiss an employee where an employer dismisses them for one of the set potentially fair reasons for dismissal, and follows a fair procedure, including carrying out a reasonable investigation, before deciding to dismiss. Another factor is that, as long as dismissal is within the “range of reasonable responses” available to the employer, it will be fair.  As such, dismissal doesn’t have to be the only possible response available – it just needs to be within the range.

So, in terms of what makes a dismissal unfair, if the employer can’t satisfy an Employment Tribunal that the reason for the dismissal was one of the set potentially fair reasons for dismissal, and also that they followed a fair procedure before deciding to dismiss, that will mean the dismissal was unfair.

Other factors which are relevant include whether the employer completed a reasonable investigation, and whether it was reasonable to conclude that, for instance, the employee had done something that amounted to gross misconduct.

It’s OK to dismiss an employee where there is lawful reason.

Is refusing TUPE unfair dismissal?

TUPE isn’t a dismissal, nor is it a resignation. As it isn’t a dismissal it can’t be an unfair dismissal, or a redundancy. You won’t be able to bring an unfair dismissal claim.

> Read more about TUPE transfer.

Can I get sacked for mental health?

Yes, in that employers can always sack their employees – the question is whether that dismissal is fair or unfair, or discriminatory.

The better question here is whether you can be fairly sacked for mental health, to which the answer is not necessarily.  If your condition is a “disability” under the Equality Act, then you have additional rights and protections. Your employer will be obliged to consider reasonable adjustments that could be made, and you would be protected from discriminatory decisions or steps taken in relation to you, including dismissal.

If your condition doesn’t amount to a “disability” then your options will depend on what has happened and how long you’ve worked for your employer, because you need two years’ service to gain the right not to be unfairly dismissed unless you have a claim for which you don’t need two years’ service – for instance certain health and safety related issues.

> What are my rights with mental health at work?

How much is an unfair dismissal payout?

Unfair dismissal compensation is awarded in two parts: the basic award and the compensatory award.

The basic award for unfair dismissal is calculated on a formula, the same used for Statutory Redundancy Pay. The basic award depends on the claimant employee’s age, length of service and weekly pay, which are all multiplied together to give the award due.  See our blog on calculating Statutory Redundancy Pay for more information.  The weekly pay figure used in the calculation is the lower of the employee’s actual weekly pay or a set, capped, amount that changes every year. See the Statutory Redundancy Pay Calculator guide for more information.

The compensatory award is also subject to a cap, of either 12 months’ pay or a set amount that changes every year. The current figure will be in our Employment Facts & Figures. In any event, the employee has to prove that they have lost money to be awarded compensation.  Part of that is to show that they have taken reasonable steps to mitigate their loss by looking for a new job.

What is the difference between unfair dismissal and constructive dismissal?

Unfair dismissal is where an employer dismisses an employee, without having a fair reason to dismiss and/or without following a fair procedure.  In other words, the employer terminates the employee’s employment.

Constructive dismissal, or constructive unfair dismissal, is where an employee resigns in response to something their employer has done to them, usually a serious breach of the employee’s contract such as a breach of the implied term of trust and confidence that should exist between employer and employee. In other words, the employee terminates their employment and claims that because they only resigned because of something the employer did, that is a dismissal in law (a constructive dismissal – because it’s constructed out of the circumstances leading to the termination of employment).  Constructive dismissal is much harder to prove, and few claims succeed.

Due to this, we’d recommend that employees seek employment law advice before resigning, or even better, as soon as an issue arises that might lead to a complaint or grievance. There are steps we can help take to improve an employee’s position and avoid a claim – especially such a difficult one as constructive dismissal.

For an employer, we’d recommend seeking advice as soon as possible if an employee submits a grievance, so we can help manage the situation.

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