Updating author: Max Winthrop
- An employee must meet certain conditions to bring a claim for unfair dismissal. (See Qualifying conditions)
- If a claim for unfair dismissal is brought, the employer must show that the reason for the dismissal is potentially fair and the employment tribunal will decide whether or not the dismissal was fair in all the circumstances. (See Reasons for dismissal and Fairness in the circumstances)
- If the dismissal is found to be unfair, the tribunal will order the employer either to re-engage or reinstate the employee or, more commonly, to pay compensation. (See Remedies)
- An employment tribunal may increase or decrease awards of compensation by up to 25% in the event of an unreasonable failure to comply with the "Acas code of practice on disciplinary and grievance procedures". (See Overview)
- Employers that compulsorily retire employees, or attempt to pressurise employees to retire, are at risk of direct age discrimination and unfair dismissal claims. (See Retirement)
There are no future developments.
Acas code of practice on disciplinary and grievance procedures
Employers are expected to comply with the principles set out in the Acas code of practice on disciplinary and grievance procedures when handling disciplinary situations. The code, which came into force on 11 March 2015 (replacing the April 2009 version), provides basic practical guidance to employers, employees and their representatives. It was issued under s.199 of the Trade Union and Labour Relations (Consolidation) Act 1992, and a tribunal is required to take it into account when considering whether or not an employer has acted reasonably in all the circumstances. Where there has been an unreasonable failure by either party to comply with the code the tribunal may increase or decrease compensation by up to 25%, depending on which party is at fault. A failure to follow the code will not, by itself, render an employer liable to legal proceedings.
The code identifies six principles as fundamental to the issue of fairness when dealing with a disciplinary situation:
- Employers should raise and deal with issues promptly and should not unreasonably delay meetings, decisions or confirmation of those decisions.
- Employers should act consistently.
- Employers should carry out any necessary investigations, to establish the facts of the case.
- Employers should inform employees of the basis of the problem and give them an opportunity to put their case in response before any decisions are made.
- Employers should allow employees to be accompanied at any formal disciplinary meeting.
- Employers should allow employees to appeal against any formal decision made.
The code identifies six key stages when an employer is dealing with a disciplinary situation:
- Establish the facts of the case. This will involve carrying out the necessary investigations.
- Inform the employee of the problem. The employer should provide the employee with a written notice containing sufficient information about the allegations against him or her and the possible consequences to enable the employee to prepare to answer the case at a disciplinary meeting.
- Hold a meeting to discuss the problem. At the meeting, the employer should explain the complaint against the employee, and the employee should be allowed to set out his or her case and answer any allegations that have been made.
- Allow the employee to be accompanied at the meeting.
- Decide on appropriate action. After the meeting the employer should decide whether or not disciplinary or any other action is justified and inform the employee accordingly in writing.
- Provide the employee with an opportunity to appeal. Where the employee appeals, the employer should inform the employee in writing of the results of the appeal as soon as possible after the appeal hearing.
The code is supported by Discipline and grievances at work: Acas guide. The guide provides more detailed advice on dealing with disciplinary situations. Unlike the code, it does not have statutory force, and tribunals are not required to have regard to it when considering whether or not an employer has acted reasonably. However, tribunals are likely to consider the guide when interpreting the code.
The code applies to disciplinary situations including misconduct and/or poor performance. It does not apply to dismissals due to redundancy or the non-renewal of fixed-term contracts.
In Holmes v Qinetiq Ltd  IRLR 664 EAT, where the employee was dismissed following extensive health-related absences, the Employment Appeal Tribunal (EAT) held that the code does not extend to dismissals on the ground of ill health (see Ill health).
In Phoenix House Ltd v Stockman and another EAT/0264/15, the EAT stated that the code "does not in terms apply to dismissals for some other substantial reason". The EAT acknowledged that elements of the Acas code may apply in general terms and that indeed this is required under ordinary common-sense fairness. However, the EAT stated that the code does not specifically apply to cases involving a breakdown in working relationships, where misconduct is not alleged and capacity is not in issue (see Some other substantial reason).
In Local Government Yorkshire and Humber v Shah EAT/0587/11 & EAT/0026/12, the EAT held that only employees, and not workers, can be awarded a compensation uplift of up to 25% where the respondent has unreasonably failed to comply with the "Acas code of practice on disciplinary and grievance procedures".
Procedural unfairness in unfair dismissal
Procedural failings will normally render a dismissal unfair, but compensation can be reduced in proportion to the likelihood that the dismissal would have occurred had a fair procedure been followed.
Additional resources on overview
- What are the possible consequences of failing to follow the Acas code of practice on disciplinary and grievance procedures?
Policies and documents
Good practice guides
Audio and video
In order to bring a claim for unfair dismissal an individual must satisfy the following conditions. He or she must:
- be an employee;
- have been dismissed (s.95 of the Employment Rights Act 1996);
- have been continuously employed for a period of at least two years (s.108 of the Employment Rights Act 1996);
- bring the claim within three months of the effective date of termination or, if that is not reasonably practicable, within a reasonable time thereafter (s.111 of the Employment Rights Act 1996);
- not fall within one of the excluded classes of employees (see Employees excluded from the right).
The first three qualifying conditions are examined in further detail below.
Additional resources on qualifying conditions
The requirement to be an employee
The right for an employee not to be unfairly dismissed is set out in s.94(1) of the Employment Rights Act 1996. To exercise that right an individual must show that he or she is an "employee" within the meaning of s.230 of the Employment Rights Act 1996, which describes an employee as an individual who has entered into or works under a "contract of employment". A contract of employment may be express or implied and it may be oral or in writing (s.230(2) of the Employment Rights Act 1996). Under s.23 of the Employment Relations Act 1999, the Secretary of State has the power to extend the right not to be unfairly dismissed to those individuals who are not employees within the meaning of the Act. This power has not yet been exercised.
Further, employee shareholders surrender certain employment rights, including the right to claim unfair dismissal (other than the right to claim automatic unfair dismissal). See Contracts of employment > Types of contracts > Employee-shareholder contracts for further information.
The requirement to have been dismissed
An employee is treated as having been dismissed where:
- the contract under which he or she is employed is terminated by the employer, whether by notice or without notice;
- under the contract he or she is employed for a fixed term, and that term expires without being renewed under the same contract;
- under the contract he or she is employed until the completion of a specific task or until the happening of a specific future event, and that task is completed or the event occurs; or
- the employee terminates the contract with or without notice in circumstances such that he or she is entitled to terminate it without notice by reason of the employer's conduct (so called "constructive dismissal" - see Termination of employment > Forms of termination > Constructive dismissal/repudiation of contract) (s.95(1) of the Employment Rights Act 1996).
Additional resources on the requirement to have been dismissed
Minimum continuous service requirement
Generally, in order to bring a claim for unfair dismissal an employee must have the required period of continuous employment beginning with the day he or she starts work and ending with the effective date of termination (see Effective date of termination). An employee must have at least two years of continuous employment (s.108 of the Employment Rights Act 1996). There are exceptions to the minimum service requirement, which are dealt with below. In Pacitti Jones v O'Brien  IRLR 888 CS, where the complaint was brought at a time when the qualifying period to bring a claim for unfair dismissal was one year's continuous service, the Court of Session held that an employee who started work on 8 April and whose effective date of termination was 7 April the following year had sufficient continuous service to bring a claim for unfair dismissal.
There is a presumption that an individual's period of employment is continuous unless the contrary can be shown. Any week during the whole or part of which a contract of employment exists counts in computing the employee's period of employment (s.212(1) of the Employment Rights Act 1996).
It does not matter how many hours in any particular week the employee works, so that, for example, if an employee works only one day per week that is sufficient for continuity to be achieved provided that there is no break.
In order to establish the period of continuous employment it is necessary to identify the day upon which the employee commences work and the effective date of termination (s.211(1) of the Employment Rights Act 1996).
There may be some weeks where a contract of employment does not subsist. Statute provides that in certain circumstances these weeks will still count towards calculation of the period of continuous service without breaking continuity. This is where an employee is:
- incapable of work as a consequence of sickness or injury for a period up to 26 weeks;
- absent from work on account of a temporary cessation of work;
- absent from work in circumstances where, by arrangement or custom, the employment relationship is regarded as continuing; or
- absent from work as a result of pregnancy or childbirth (ss.212(3) and (4) of the Employment Rights Act 1996).
Where an employee is reinstated or re-engaged at the conclusion of a tribunal hearing, he or she is treated as if he or she had never been dismissed for the purpose of calculating continuity.
For further information on the rules relating to continuity of employment, including the effect of absence due to strike action or a business transfer on continuity, see Continuous employment > Determining continuous employment.
Additional resources on minimum continuous service requirement
Circumstances in which the minimum service requirement does not apply
An employee with less than two years' continuous service will be able to bring a claim for unfair dismissal where he or she is dismissed for:
- trade union membership or activities or for not being a member of a trade union (s.154 of the Trade Union and Labour Relations (Consolidation) Act 1992);
- one of a number of reasons connected with carrying out jury service (ss.108(3)(aa) and 98B of the Employment Rights Act 1996);
- one of a number of reasons connected with leave for family reasons, including maternity, paternity, adoption and shared parental leave, time off for antenatal care for pregnant employees and time off to accompany pregnant women with whom fathers and partners have a "qualifying relationship" to antenatal appointments (ss.108(3)(b) and 99(1)-(3) of the Employment Rights Act 1996);
- one of a number of reasons connected with the exercise of the right to time off to attend adoption appointments for the purpose of having contact with the child to be adopted or for any other purpose connected with the adoption (s.99(3)(ab) of the Employment Rights Act 1996);
- one of a number of reasons in connection with the exercise of rights relating to health and safety (ss.108(3)(c) and 100(1)-(3) of the Employment Rights Act 1996);
- in the case of either a shop worker or a betting shop worker refusing to work on Sundays (ss.108(3)(d) and 101(1)-(3) of the Employment Rights Act 1996);
- one of a number of reasons connected with the exercise of rights relating to working time (ss.108(3)(dd) and 101A of the Employment Rights Act 1996 and Working Time Regulations 1998 (SI 1998/1833));
- performing or proposing to perform any functions as a trustee of an occupational pension scheme (s.108(3)(e) of the Employment Rights Act 1996);
- performing or proposing to perform any functions or activities as a statutory employee representative or candidate (ss.108(3)(f) and 103 of the Employment Rights Act 1996);
- making a protected disclosure (ss.108(3)(ff) and 103A of the Employment Rights Act 1996 and Public Interest Disclosure Act 1998) - although this does not encompass acts directed to establishing or confirming the reasonableness of the employee's belief in the information (Bolton School v Evans  IRLR 140 CA);
- asserting statutory rights (ss.108(3)(g) and 104(1)-(3) of the Employment Rights Act 1996) - for example asserting that the employer has made a deduction from wages by failing to pay the wages on time (Elisabeth Claire Care Management Group v Francis  IRLR 858 EAT) although the protection relates to the infingement of an employee's rights that has happened in the past, not to an assertion that such a right might be infringed in the future (Spaceman v ISS Mediclean Ltd (t/a ISS Facility Service Healthcare)  IRLR 512 EAT);
- one of a number of reasons connected with the exercise of rights relating to the national minimum wage (ss.108(3)(gg) and 104A(1)-(2) of the Employment Rights Act 1996 and National Minimum Wage Act 1998);
- one of a number of reasons connected with the exercise of rights relating to tax credits (ss.108(3)(gh) and 104B(1)-(2) of the Employment Rights Act 1996 and Tax Credits Act 1999);
- one of a number of reasons connected with the right to request flexible working (ss.108(3)(gi) and 104C of the Employment Rights Act 1996);
- one of a number of reasons relating to blacklisting on the grounds of trade union membership or activities (ss.108(3)(gk) and s.104F of the Employment Rights Act 1996);
- one of a number of reasons connected with the right to make a request in relation to study or training (ss.108(3)(gk) and 104E of the Employment Rights Act 1996);
- reason of redundancy but selected for redundancy on one of a number of prohibited grounds (ss.108(3)(h) and 105 of the Employment Rights Act 1996);
- one of a number of reasons connected with the exercise of rights relating to transnational information and consultation of employees (s.108(3)(hh) of the Employment Rights Act 1996 and regs.28(3)-(4) and (6)-(7) of the Transnational Information and Consultation of Employees Regulations 1999 (SI 1999/3323));
- a number of reasons (or grounds) connected with the prevention of less favourable treatment of part-time workers (s.108(3)(i) of the Employment Rights Act 1996 and reg.7(1) of the Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000 (SI 2000/1551));
- reasons (or grounds) connected with the less favourable treatment of fixed-term employees (s.108(3)(j) of the Employment Rights Act 1996 and reg.6 of the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002 (SI 2002/2034);
- performing or proposing to perform any functions or activities as a member or representative under the European Public Limited-Liability Company Regulations 2004 (SI 2004/2326) (s.108(3)(k) of the Employment Rights Act 1996);
- performing or proposing to perform any functions or activities as a candidate or representative under the Information and Consultation of Employees Regulations 2004 (SI 2004/3426) (s.108(3)(l) of the Employment Rights Act 1996);
- performing or proposing to perform any functions or activities as a representative or candidate under the Occupational and Personal Pension Schemes (Consultation by Employers and Miscellaneous Amendment) Regulations 2006 (SI 2006/349) (s.108(3)(m) of the Employment Rights Act 1996);
- a number of reasons relating to the European Cooperative Society (Involvement of Employees) Regulations 2006 (SI 2006/2059) (s.108(3)(o) of the Employment Rights Act 1996);
- a number of statutory rights in relation to recognition or derecognition of a trade union (s.70A and paras.161 to 162 of sch.A1 to the Trade Union and Labour Relations (Consolidation) Act 1992);
- a number of reasons relating to the statutory right to be accompanied at a disciplinary or grievance hearing (s.12 of the Employment Relations Act 1999);
- a number of reasons relating to the statutory right to be accompanied at a meeting held under the statutory procedure for requests in relation to study or training (reg.18 of the Employee Study and Training (Procedural Requirements) Regulations 2010 (SI 2010/155));
- taking protected industrial action (s.238A of the Trade Union and Labour Relations (Consolidation) Act 1992);
- one of the reasons set out in reg.17(3) of the Agency Workers Regulations 2010 (SI 2010/93) (s.108(3)(r) of the Employment Rights Act 1996);
- a number of reasons relating to pensions auto-enrolment (s.104D of the Employment Rights Act 1996);
- his or her political opinions or affiliations (s.108(4) of the Employment Rights Act 1996);
- refusing to accept an offer to become an employee-shareholder (s.108(3)(gm) and s.104G of the Employment Rights Act 1996);
- a reason connected with his or her membership of a reserve force (where the effective date of termination is on or after 1 October 2014) (s.108(5) of the Employment Rights Act 1996); and
- breaching a provision or purported provision of a zero hours contract to which s.27A(3) of the Employment Rights Act 1996 applies (ie an exclusivity term) (reg.2(5) of the Exclusivity Terms in Zero Hours Contracts (Redress) Regulations 2015 (SI 2015/2021)).
Additional resources on circumstances in which the minimum service requirement does not apply
Effective date of termination
The "effective date of termination" is defined as follows:
- In relation to an employee whose contract of employment is terminated by notice, whether given by his or her employer or by the employee, it is the date on which that notice expires.
- In relation to an employee whose contract of employment is terminated without notice, it is the date on which the termination takes effect.
- In relation to an employee who is employed under a limited contract, where that contract expires without being renewed under the same contract, it is the date on which the termination takes effect (s.97(1) of the Employment Rights Act 1996).
Usually the effective date of termination will be the date on which the employee ceases work. Where the contract is terminated without the employee working out his or her notice, the effective date of termination is the date on which the termination takes effect. So, if an employer makes a payment of wages in lieu of notice, the effective date of termination is not postponed (RJ Dedman v British Building and Engineering Appliances Ltd  IRLR 379 CA). However, merely using the wording "pay in lieu of notice" in a dismissal letter is not conclusive evidence of an immediate termination. In Chapman v Letheby and Christopher  IRLR 440 EAT, the Employment Appeal Tribunal (EAT) held that the correct approach was to consider the wording in the termination letter and any ambiguity should be construed in favour of the employee.
In the absence of an express term that contractual notice commences immediately, no account should be taken of fractions of a day in cases of oral or written notice (Wang v University of Keele  IRLR 542 EAT). The EAT in Wang highlighted the reasoning in West v Kneels  IRLR 430 EAT in relation to oral notice, namely, that no account should be taken of fractions of a day and that "notice may not always run from the moment it comes to the attention of the employee", and extended that reasoning to written notice. In Wang, the employee received a letter dismissing him with three months' notice on 3 November 2008 but it was held that the notice did not start to run until 4 November 2008 with the result that the effective date of termination was 3 February 2009.
Where the employee is put on garden leave, the effective date of termination will be the date on which the notice expires rather than that on which the employee ceases working.
If an employee is summarily dismissed during his or her notice period, the date of the summary dismissal will be the effective date of termination. In M-Choice UK Ltd v Aalders EAT/0227/11, the EAT held that, where an employee on notice is summarily dismissed before accruing one year's service (which was the qualifying period for claiming unfair dismissal at the time), he or she loses any right to claim ordinary unfair dismissal.
Where an employer gives less than the statutory minimum notice required by s.86 of the Employment Rights Act 1996, the effective date of termination is treated as postponed for the purpose of deciding whether or not an employee has sufficient continuity of service to bring an unfair dismissal claim. The date is postponed to that on which the statutory minimum period of notice would have expired (s.97(2) of the Employment Rights Act 1996).
The date is postponed in the same way for the purposes of calculating the basic award and the maximum amount of the week's pay (s.227 of the Employment Rights Act 1996).
The date is not postponed where an employer summarily dismisses an employee in circumstances where it is entitled to do so, such as for gross misconduct. This point was the issue in Lancaster & Duke Ltd v Wileman  IRLR 112 EAT. The employee was summarily dismissed for gross misconduct. Her length of service fell two days short of the minimum period of continuous service required to be able to claim unfair dismissal. The EAT said that s.97(2) of the 1996 Act refers to "the notice required by section 86", bringing the entirety of s.86 into play, including s.86(6), which preserves an employer's right "to treat the contract as terminable without notice by reason of the conduct of the other party". The EAT found that, by referring back to s.86 as a whole, s.97(2) is subject to the employer's right to give no notice. Therefore the employee could not extend her service to be able to bring an unfair dismissal claim (although the EAT remitted the case to the tribunal to determine whether or not she had been guilty of gross misconduct).
Where an employee resigns and claims constructive dismissal the effective date of termination is postponed to the date when the employment would have ended if the employer had given the notice required by s.86 of the Employment Rights Act 1996 (s.97(4) of the Employment Rights Act 1996). The postponement in these circumstances is for the same purposes as postponements in the case of termination by the employer (see above).
Following the decision of the Court of Appeal in Harper v Virgin Net Ltd  IRLR 390 CA, it is clear that an employee who is dismissed in breach of contract, ie without notice, and where the contractual notice period would have taken him or her beyond the qualifying period for unfair dismissal, cannot bring a claim for breach of contract to include damages for the "loss of a chance to bring a claim of unfair dismissal". Previously in Raspin v United News Shops Ltd  IRLR 9 EAT the EAT had said that an employee could (subject to the £25,000 contract claim cap) theoretically recover the compensation that he or she would otherwise have been able to claim for unfair dismissal if he or she had had one year's service (which was the qualifying period in force at the time). An appeal to the House of Lords in Harper was withdrawn.
An appeal does not work to postpone the effective termination date unless there is a contractual provision that states otherwise (Savage v J Sainsbury Ltd  IRLR 109 CA). However, in Hawes & Curtis Ltd v (1) Arfan (2) Mirza EAT/0229/12, both employees appealed against their summary dismissal and while their appeals were otherwise unsuccessful they were informed that the date of termination of their employment would be the date of the appeal, which was 4 November 2010 and they were paid until that date. The tribunal held 4 November was the effective date of termination. In dismissing the employer's appeal the EAT rejected its argument that for the purposes of s.97(1) the effective date of termination always crystallises on the date that the summary dismissal is communicated and it cannot be varied by what occurs on appeal. The EAT went on to hold that the tribunal was entitled to take into account what took place on appeal in determining the effective date of termination as 4 November, stating that: "This ... is one of those relatively rare ... cases where the employer varied the date of dismissal".
In Rabess v London Fire and Emergency Planning Authority  IRLR 147 CA, the EAT held that the effective date of termination remained the same despite the fact that the disciplinary sanction was reduced on appeal from summary dismissal without notice to dismissal with payment in lieu of notice. In view of the employer's reconfirmation of the original effective date of termination in the appeal letter, the EAT found that "nothing happened to change the date of dismissal".
In Fitzgerald v University of Kent at Canterbury  IRLR 300 CA, the Court of Appeal held that the effective date of termination must be determined objectively on the basis of what has happened and cannot be fixed artificially by agreement between the employer and employee. This was illustrated in Horwood v Lincolnshire County Council EAT/0462/11 & EAT/0463/11, in which the EAT held that the effective date of termination where an employee had unequivocally resigned with immediate effect could not be varied by the employer informing the employee that the resignation would commence on a different date. It is, however, possible for the employer to bring the termination date forward at the employee's request by issuing a fresh notice of termination: Palfrey v Transco plc  IRLR 916 EAT.
In Radecki v Kirklees Metropolitan Borough Council EAT/0114/08, the EAT held that removing an employee from the payroll while he was suspended and negotiating a settlement agreement (previously known as a compromise agreement) did not terminate his employment. However, the Court of Appeal overruled this finding, and held that the effective date of termination can be the date of an act demonstrating a clear intention to terminate employment. The Court found that the act of stopping the employee's pay while he was suspended was a sufficiently unequivocal statement of such an intention (Kirklees Metropolitan Council v Radecki  IRLR 555 CA).
In Gisda CYF v Barratt  IRLR 933 CA, the Court of Appeal held that the effective date of termination of an employee who was dismissed for gross misconduct was the date on which she opened and read the letter from her employer informing her of the dismissal. The Supreme Court upheld the Court of Appeal decision (Gisda Cyf v Barratt  IRLR 1073 SC). In Robinson v Bowskill and others EAT/0313/12, the employee was summarily dismissed on 6 July 2011 and the dismissal was communicated to the employee's solicitor by e-mail on the same day. The employee's solicitor informed her of the dismissal the next day. The employer also sent a letter to the employee confirming the dismissal but the employee did not see the letter until 8 July. The employment tribunal held that the effective date of termination was 7 July 2011. The EAT held that "the tribunal had not erred in law; the principle in Gisda Cyf that dismissal is not effective until the employee knows of it or has had a reasonable opportunity to do so did not operate so as to exclude communication of the dismissal to the employee by a third party - in this case her instructed solicitor".
In Newcastle upon Tyne Hospitals NHS Foundation Trust v Haywood  IRLR 644 SC, the Supreme Court endorsed the approach in Gisda Cyf and held that, where an employee was dismissed by letter, her notice period began when she read the letter, or had a reasonable opportunity to do so.
Employees excluded from the right
The following classes of employees are excluded from the protection of unfair dismissal legislation.
Individuals employed as a master or member of the crew of a fishing vessel where the employee is remunerated only by his or her share in the profits or gross earnings of the vessel are excluded (s.199(2) of the Employment Rights Act 1996).
Employees taking part in unofficial industrial action are also excluded from unfair dismissal protection. Loss of the right to claim unfair dismissal can occur in circumstances set out in ss.237-239 of the Trade Union and Labour Relations (Consolidation) Act 1992. In summary, these sections exclude the right to protection from unfair dismissal for any employees dismissed while taking part in unofficial industrial action. However, an employee will be treated as having been automatically unfairly dismissed if the principal reason for dismissal was that the employee had taken part in official industrial action in respect of which the trade union concerned and its officials enjoy immunity from suit and:
- the dismissal took place within 12 weeks of the start of the protected industrial action by the employee;
- the dismissal took place more than 12 weeks after the start of the protected industrial action and the employee had ceased taking part in the industrial action within the 12-week period; or
- the dismissal took place more than 12 weeks after the start of the protected industrial action, the employee had not ceased to take part in the industrial action within the first 12 weeks and the employer had failed to take such procedural steps that would have been reasonable for the purposes of resolving the dispute (see Trade unions and industrial action > Handling industrial action).
The protected period of 12 weeks is automatically extended by a number of days equivalent to any days during that period on which the employee was locked out by the employer.
Additional resources on employees excluded from the right
Employees working abroad
Section 94(1) of the Employment Rights Act 1996, which sets out an employee's right not to be unfairly dismissed by his or her employer, does not stipulate the territorial limitations of the right. Case law on when the right to claim unfair dismissal may apply to employees whose duties involve working outside Great Britain is set out below.
In Serco Ltd v Lawson; Botham v Ministry of Defence; Crofts and others v Veta Ltd and others  IRLR 289 HL, the House of Lords held that, for employees who work across different jurisdictions, it will usually be the laws of the country in which they are based that apply. In the context of expatriate employees, Lord Hoffman observed that: "The circumstances would have to be unusual for an employee who works and is based abroad to come within the scope of British labour legislation." Commenting on what would be sufficient to disapply "the general rule that the place of employment is decisive", Lord Hoffman gave the example of "an employee [who] is posted abroad by a British employer for the purposes of a business carried on in Great Britain" noting that "it would be very unlikely that someone working abroad would be within the scope of s.94(1) unless he was working for an employer based in Great Britain" but that on its own would be insufficient.
In Duncombe and others v Secretary of State for Children, Schools and Families (No. 2)  IRLR 840 SC, the Supreme Court held that the teachers were entitled to bring unfair dismissal claims because they had an "overwhelmingly closer connection with Britain and with British employment law than with any other system of law".
In Ravat v Halliburton Manufacturing and Services Ltd  IRLR 315 SC, the Supreme Court noted that the general rule on the question of territorial jurisdiction for unfair dismissal is that the place of employment is decisive, but that this is not an absolute rule. Section 94(1) of the Employment Rights Act 1996 leaves room for exceptions, such as peripatetic employees based in Great Britain. The Supreme Court stated that the reason that an exception can be made in cases such as Mr Ravat's is because the connection between the employment relationship and Great Britain was sufficiently strong to presume that, although the employees were working abroad, Parliament must have intended that s.94(1) should apply.
The approach to determining whether or not an employee working abroad is covered by s.94(1) was refined in Clyde & Co LLP v Van Winkelhof  EWCA Civ 1207 CA, in which the Court of Appeal stated that: "The comparative exercise is appropriate where the appellant is employed wholly abroad" and "it is necessary to identify factors which are sufficiently powerful to displace the territorial pull of the place of work, and some comparison and evaluation of the connections between the two systems will typically be required to demonstrate why the displacing factors set up a sufficiently strong counter-force". However, the Court of Appeal stated this "is not necessary where the applicant lives and/or works for at least part of the time in Great Britain", in which case what is required is that the connection, as stated in Ravat is "sufficiently strong to enable it to be said that Parliament would have regarded it as appropriate for the tribunal to deal with the claim".
In Lodge v Dignity & Choice in dying and another EAT/0252/14, the Employment Appeal Tribunal (EAT) held that the employee, who had relocated to Australia for personal reasons, but remained employed and continued to work for her London-based employer through remote access, did have the right to bring an unfair dismissal claim in England and Wales. The EAT noted that all the work the employee did from her computer in Australia was for the benefit of her British employer, and commented that it made no difference that she had moved abroad for family reasons rather than being posted there.
Pre-termination negotiations and agreements preventing the pursuit of an unfair dismissal complaint
Any agreement to prevent an employee from presenting or pursuing a complaint of unfair dismissal is void and will have no effect (s.203(1) of the Employment Rights Act 1996).
There are two main exceptions to this.
The first is where Acas has become involved and a conciliation officer has taken action in accordance with his or her statutory duties to resolve any dispute. Such an agreement is recorded in a document known as a COT3.
The second is where, as an alternative to conciliation through Acas, the parties enter into a settlement agreement (previously known as a compromise agreement) that satisfies the conditions set out in s.203 of the Employment Rights Act 1996. In order for such an agreement to be binding the employee must have received advice from a "relevant independent adviser", defined in s.203 as a qualified lawyer, official or officer of an independent trade union or an employee or volunteer worker at an advice centre, provided that in the case of the last two categories the individual is certified by the union or advice centre as competent and authorised to give the advice.
In certain circumstances evidence of "pre-termination negotiations" is inadmissible in any unfair dismissal proceedings under s.111 of the Employment Rights Act 1996 (s.111A). "Pre-termination negotiations" are defined as "any offer made or discussions held, before the termination of the employment in question, with a view to it being terminated on terms agreed between the employer and the employee". In effect, s.111A permits an employer to hold a discussion with an employee with a view to terminating his or her employment under a settlement agreement, without the employee being able to rely on the details of the conversation as evidence in unfair dismissal proceedings. For further information, see Employment tribunals and dispute resolution > Tribunal procedures and penalties > Admissibility of evidence in unfair dismissal proceedings.
Acas code of practice on settlement agreements
The Acas code of practice on settlement agreements provides guidance on conducting pre-termination negotiations and the confidentiality attached to such negotiations by virtue of s.111A of the Employment Rights Act 1996. The code confirms the following:
- Under s.111A, evidence of pre-termination negotiations can be inadmissible in unfair dismissal proceedings whether or not there is an existing dispute between the parties (para.6).
- Section 111A does not apply to claims for automatic unfair dismissal (para.7).
- Where an employment tribunal finds that there has been "improper behaviour" by one of the parties it can limit the application of s.111A to the extent that it considers just (para.8).
Paragraph 18 of the code provides a non-exhaustive list of examples of improper behaviour, which is set out below.
- All forms of harassment, bullying and intimidation, including through offensive language and aggressive actions.
- Physical violence or the threat of it and other criminal acts.
- All forms of victimisation.
- Discrimination because of any of the protected characteristics set out in the Equality Act 2010.
- The application of undue pressure on a party. For example, an employer stating that the rejection of a settlement proposal by an employee will result in his or her dismissal, or an employee threatening to undermine an employer's public reputation if it refuses to sign an agreement (and the disclosure is not protected by the Public Interest Disclosure Act 1998), or either party failing to give the other a reasonable period of time to consider a proposed agreement.
Paragraph 19 of the code states that the above examples "are not intended to prevent, for instance, a party setting out in a neutral manner the reasons that have led to the proposed settlement agreement, or factually stating the likely alternatives if an agreement is not reached, including the possibility of starting a disciplinary process if relevant".
The Acas code of practice on settlement agreements also provides the following guidance:
- A proposal that both parties enter into a settlement agreement can be made at any stage of the employment relationship (para.11).
- When communicating the proposal, it is helpful to give the reasons why the proposal is being made (para.11).
- Parties should be afforded a reasonable period of time to consider any proposed settlement agreement (and what is reasonable will vary according to the particular circumstances of the case). It says: "As a general rule, a minimum period of 10 calendar days should be allowed to consider the proposed formal written terms of a settlement agreement and to receive independent advice, unless the parties agree otherwise" (para.12). (Acas considers this to be good employment practice but it is not a legal requirement.)
- Employers should permit employees to be accompanied by a work colleague, trade union official or trade union representative at any meeting to discuss the proposal (para.13). (Acas considers this to be good employment practice but it is not a legal requirement.)
The code was issued under s.199 of the Trade Union and Labour Relations (Consolidation) Act 1992. Section 207 of the Act provides that while a failure to comply with the code is not actionable in its own right, an employment tribunal is required to take the code into account when considering whether or not an employer has acted reasonably in all the circumstances.
Additional resources on pre-termination negotiations and agreements preventing the pursuit of an unfair dismissal complaint
- Can an employee rely on confidential pre-termination negotiations with the employer as evidence in a tribunal claim?
- What is a settlement agreement?
Policies and documents
Reasons for dismissal
Once the fact of a dismissal has been established, it is for the employer to prove the reason for the dismissal and in particular that the reason was one of the designated reasons in s.98 of the Employment Rights Act 1996, these being:
- a reason relating to the capability or qualifications of the employee (see Capability);
- a reason relating to conduct (see Misconduct);
- the employee was redundant (see Redundancy);
- the employee could not continue to work in the position that he or she held without contravention of a statutory duty or restriction (see Contravention of a statutory duty or restriction); and
- some other substantial reason capable of justifying dismissal (see Some other substantial reason).
Retirement is not a potentially fair reason for dismissal under s.98 of the Employment Rights Act 1996. See Retirement for more information.
Establishing the reason is not usually a difficult hurdle for the employer to overcome. What the employer needs to do is simply establish the set of facts or beliefs on which it acted to dismiss. For example, in a case of misconduct an employer does not have to prove that the employee committed the act of misconduct to establish the reason (see Termination of employment > Notice and pay in lieu of notice). It is enough for the employer to show that it acted on the genuine belief that the employee had committed the misconduct complained of.
Where an employer relies on a number of distinct acts of misconduct to justify dismissal, the employer must rely on its actual reasons for dismissal rather than the justifiable reasons it could have relied on. In Robinson v Combat Stress EAT/0131/14, the employee was dismissed for three unrelated episodes of misconduct. The employment tribunal found that the first two episodes of misconduct were not sufficient to establish a fair dismissal, but found that the third episode of misconduct was sufficiently serious to make the employee's dismissal fair despite evidence from the employer that it viewed that episode to be less serious. However, on appeal, the EAT emphasised that the correct legal test to assess the fairness of a dismissal is to consider the employer's actual reasons for the dismissal rather than the justifiable reasons that it could have relied on. Accordingly, the EAT allowed the employee's appeal against the dismissal of his claim and remitted his claim to a fresh employment tribunal.
The employer will be allowed to place reliance on only those matters of which it was aware at the time of the dismissal in order to establish the reason for the dismissal. Facts that came to light after the dismissal cannot be relied on to justify it, although they may be relevant to the level of compensation ultimately awarded (W Devis & Sons Ltd v RA Atkins  IRLR 314 HL).
If the employer does fail to persuade the tribunal of the reason for the dismissal within the meaning of s.98 of the Employment Rights Act 1996, the tribunal is bound to find that the dismissal was unfair.
Additional resources on reasons for dismissal
Fairness in the circumstances
Where an employer has established that the reason for the dismissal was one of the potentially fair reasons under the Employment Rights Act 1996, a tribunal will go on to determine whether or not the dismissal was fair. This will depend on whether or not, in the circumstances (including the employer's size and administrative resources), the employer acted reasonably in treating the reason as a sufficient reason for dismissal (s.98(4)(a) of the Employment Rights Act 1996).
When applying s.98(4), the correct approach is for the tribunal to consider whether or not the employer's decision to dismiss fell within the band of reasonable responses open to an employer (Iceland Frozen Foods Ltd v Jones  IRLR 439 EAT). The tribunal must not approach the matter by asking itself whether or not it thinks that the employer did the right thing. It must recognise that there will usually be a number of different courses open to an employer according to the particular situation.
There has been case law that has sought to discredit the "range of reasonable responses" test. However, the Court of Appeal has reaffirmed that it is the approach that tribunals should follow (Post Office v Foley; HSBC Bank plc (formerly Midland Bank plc) v Madden  IRLR 827 CA, Ngengfack v London Borough of Southwark  EWCA Civ 711 CA). The Court of Appeal reaffirmed the range of reasonable responses test in the context of a misconduct dismissal in Orr v Milton Keynes Council  IRLR 317 CA. In Orr, the Court stated that when considering a claim for unfair dismissal "the tribunal cannot substitute its own findings in relation to misconduct because it is concerned only with the question [of] whether the employer acted reasonably or unreasonably in investigating the allegations, forming a belief in the employee's guilt and deciding to dismiss him".
In Turner v East Midlands Trains Ltd  IRLR 107 CA, the Court of Appeal held that the "band of reasonable responses" test for determining unfair dismissal claims does not need to be modified where an employee's rights under art.8 of the European Convention on Human Rights (the right to respect for private and family life) are engaged as a result of his or her dismissal.
In deciding whether or not a dismissal is fair, a tribunal will want to be satisfied that the employer adopted a fair procedure. In particular it will want to be clear that the employer followed any disciplinary procedure that was in place; a contractual term requiring the employer to follow its own disciplinary procedure (unless there is a good reason to depart from it) will be implied into an employee's contract of employment (Lakshmi v Mid Cheshire Hospitals NHS Trust  IRLR 956 QB). If the employer does not have its own disciplinary procedure in place, the tribunal will want to be clear that it adhered to the principles of natural justice before imposing any disciplinary sanction. In particular an employee should be made aware of the nature of the allegations made against him or her and be given an opportunity to state his or her case. In addition any disciplinary hearing should be conducted in good faith without bias.
Although the failure to have in place a disciplinary procedure will not in itself render a dismissal unfair, it is certainly advisable to have a proper procedure. The Acas code of practice on disciplinary and grievance procedures states that fairness and transparency are promoted by developing and using rules and procedures for handling disciplinary and grievance matters, and that these rules and procedures should be set down in writing, and be specific and clear. An employment tribunal will take the code into account when assessing the fairness or otherwise of a dismissal. An unreasonable failure by an employer to comply with the code will permit the tribunal to adjust compensation by up to 25%, if this is just and equitable.
In Khan v Stripestar Ltd EAT/0022/15, the employee was dismissed for gross misconduct following a disciplinary hearing that lasted approximately six minutes, but was given a fair appeal that involved a thorough investigation. The Employment Appeal Tribunal (EAT) held that there are no limitations on the nature and extent of the deficiencies in a first stage disciplinary procedure that can be cured by a thorough and effective appeal. The EAT drew a distinction between an employer's bad faith in issuing a warning that leads to dismissal as in Way v Spectrum Property Care Ltd  IRLR 657 CA, and bad faith within a deficient disciplinary process not ultimately relied on in assessing whether or not the dismissal was fair.
In Polkey v AE Dayton Services Ltd (formerly Edmund Walker (Holdings) Ltd)  IRLR 503 HL, the House of Lords made it clear that, save in exceptional circumstances, a failure to follow a fair procedure will usually result in a finding of unfair dismissal. Accordingly, procedural failings will normally render a dismissal unfair, but compensation can be reduced in proportion to the likelihood that the dismissal would have occurred had a fair procedure been followed (the "Polkey reduction"). In Talon Engineering Ltd v Smith  IRLR 1104 EAT, the EAT held that an employer's refusal to postpone a disciplinary hearing for two weeks to allow the employee's union official to accompany her made her dismissal unfair. The EAT found that this was a fundamental procedural defect that the employer did not cure at the appeal stage. It also upheld the employment tribunal's decision to reduce the employee's basic and compensatory awards by 15% for contributory fault and to make a further Polkey reduction of 15% to her compensatory award.
An employer's decision to start a second set of disciplinary proceedings after an employee has already been disciplined for the same offence will not automatically render a subsequent dismissal unfair (Christou and another v London Borough of Haringey  IRLR 379 CA).
According to the Court of Appeal in McMillan v Airedale NHS Foundation Trust  IRLR 803 CA, an employer cannot impose a greater penalty on an employee at the appeal stage of the disciplinary process without an express contractual term allowing it to do so. The Court of Appeal held that the right to appeal a disciplinary sanction is for the employee's protection, so the employee should not be put in a worse position if he or she exercises that right than would otherwise be the case. However, the Court of Appeal commented that an employer could, in principle, include a contractual right in a disciplinary process to increase disciplinary penalties on appeal.
Additional resources on fairness in the circumstances
The lack of capability or qualifications of an employee is a potentially fair reason for dismissal (s.98(2)(a) of the Employment Rights Act 1996). Capability is defined as meaning capability assessed by reference to skill, aptitude, health or any other physical or mental quality. "Qualifications" means any degree, diploma or other academic, technical or professional qualification relevant to the position that the employee holds.
Broadly speaking dismissals for lack of capability can be divided into those for incompetence or those for ill health.
The Acas code of practice on disciplinary and grievance procedures covers disciplinary situations including poor performance. The code states that: "If employers have a separate capability procedure they may prefer to address performance issues under [that] procedure. If so, however, the basic principles of fairness set out in [the] code should still be followed, albeit that they may need to be adapted."
Before dismissing an employee on performance grounds an employer should carry out a proper investigation or appraisal of the employee's performance and seek to identify the problem. Once the problem has been identified an employee should be given warning of the consequences of failing to improve. The employee should then be given a reasonable chance to improve and offered training and assistance to achieve this end. If an employer fails to follow these basic steps it is highly unlikely that a tribunal will find that it has acted fairly.
There are no hard and fast rules as to the number of warnings an employee should be given relating to his or her performance nor indeed the period of time that should be given to reach a satisfactory level of performance. This will depend on various factors such as the nature of the job and indeed the needs of the employer to have it carried out to the requisite standard within a relevant timescale. As a matter of practice it is a good idea to take a contemporaneous note of formal meetings relating to performance and confirm their outcome in writing. The code confirms that "employers would be well advised to keep a written record of any disciplinary or grievances cases they deal with".
There are occasions where it may be fair to dismiss without warning where the inadequacy of an employee's performance is so extreme that no amount of training or time for improvement could possibly make a difference. The potentially disastrous consequences of one mistake may justify a dismissal without warning where the consequences for an employer are so great that it cannot be expected to continue the employment relationship. This might be the case in occupations where the degree of professional skill required is very high and the potential consequences of falling below that standard are extremely serious (see Taylor v Alidair Ltd  IRLR 82 CA). However, the employer is still obliged to use a fair procedure.
The seniority of an employee can be relevant to the extent that he or she needs to be warned before dismissal. It is sometimes said that, by the very nature of the job of a senior executive, he or she should be aware and capable of judging whether he or she is achieving the requirements of the employer. While this argument is frequently put before the tribunals, it is best, when at all possible, to give warnings relating to performance irrespective of the seniority of the employee.
Additional resources on poor performance
- Is it unlawful for an employer to dismiss an employee for incompetence?
- If an employer chooses not to provide any training can an employee dismissed for unsatisfactory job performance succeed in a claim for unfair dismissal?
- What is a reasonable review period when setting targets for an employee who is underperforming?
- Is there a set number of warnings that an employer must give an employee prior to dismissal?
- For how long should warnings for poor performance remain "live"?
- Can an employer dismiss an employee for a one-off act of poor performance?
Policies and documents
- Performance improvement procedure
- Letter inviting an employee to an informal meeting to discuss performance concerns
- Letter to an employee whose performance has improved after initial feedback
- Letter confirming what has been agreed following an informal discussion of performance concerns
- Letter inviting an employee to attend a meeting where performance has not improved after initial feedback
- Record of an underperforming employee's progress in improving their performance
- Letter inviting an employee to attend a feedback session following performance concerns
- Letter inviting an employee to attend a follow-up meeting following performance concerns
- Letter inviting an employee to attend a formal performance management hearing
- Letter to an employee rescheduling a performance management hearing
- Letter putting in place further improvement measures following a formal performance management hearing
- Letter following a formal performance management hearing informing an employee that no further action will be taken
- Order of proceedings for a formal performance management hearing
- Letter giving an employee a written warning following a formal performance management hearing
- Letter inviting an employee to attend a performance dismissal hearing
- Letter to an employee rescheduling a performance dismissal hearing
- Order of proceedings for a performance dismissal hearing
- Letter giving an employee a final written warning following a performance dismissal hearing
- Letter putting in place further improvement measures following a performance dismissal hearing
- Letter following a performance dismissal hearing informing an employee that no further action will be taken
- Letter offering redeployment to an employee following a performance dismissal hearing
- Letter dismissing an employee who has refused to be redeployed following a performance dismissal hearing
- Letter dismissing an employee following a performance dismissal hearing
- Letter inviting an employee to attend a performance dismissal appeal hearing
- Letter to an employee rescheduling a performance dismissal appeal hearing
- Letter informing an employee of the outcome of a performance dismissal appeal hearing
"How to" guidance
Line manager briefings
Ill health is another aspect of capability. When dismissing an employee on grounds of long-term ill health a fair procedure will consist of:
- consultation with the employee;
- consideration of ill health early retirement (if available);
- medical investigation; and
- consideration of alternative employment.
Proper consultation with the employee should commence at the start of the illness and continue throughout its duration. As part of this process, consideration should be given to the employee's own opinions on his or her condition.
Employers have a positive duty to consider redeploying those suffering from ill health elsewhere within their organisation. There is no onus on employers to create a job where none exists but a failure on the part of an employer to apply its mind to the question of alternative employment may be sufficient in itself to render a dismissal on the grounds of ill health unfair.
As well as consulting with the employee or his or her representative an employer should satisfy itself about the current medical position by seeking proper medical advice. This may involve obtaining a report from the employee's GP or specialist. It may involve asking the employee to be examined by an occupational health practitioner or even commissioning an independent report. An employee's consent should be sought before an approach to his or her doctor is made because of the doctor's duty of confidentiality. An employer should seek guidance from the medical adviser about the nature of the illness, the expected period of absence and other types of work that the employee might be capable of undertaking as an alternative.
In Spencer v Paragon Wallpapers Ltd  IRLR 373 EAT, the Employment Appeal Tribunal (EAT) stated that the basic question that must be determined in ill-health dismissal cases "is, whether, in all the circumstances, the employer can be expected to wait any longer and, if so, how much longer?" The EAT went on to state that the tribunal had correctly taken "into account the nature of the illness, the likely length of the continuing absence, the need of the employers to have done the work which the employee was engaged to do and [the] circumstances of the case".
In Holmes v Qinetiq Ltd  IRLR 664 EAT, where the employee was dismissed following extensive health-related absences, the EAT held that the Acas code of practice on disciplinary and grievance procedures does not extend to dismissals on the ground of ill health. The EAT upheld the employment tribunal reasoning that the Acas code is limited to internal procedures relating to culpable misconduct or culpable poor performance.
One issue that sometimes arises is whether or not an employer can fairly dismiss an employee who is absent from work with an illness for which the employer is wholly or partly responsible. In McAdie v Royal Bank of Scotland plc  IRLR 895 CA, the Court of Appeal upheld the EAT finding that the fact that the employer has caused the incapacity in question, however culpably, cannot preclude it forever from effecting a fair dismissal. However, in these circumstances, it may be necessary for the employer to "go the extra mile" in finding alternative employment for the employee, or to tolerate a longer period of sickness absence than would otherwise be reasonable.
Ultimately, the decision to dismiss is not a medical question but one for the employer to take in the light of the medical evidence available. Equally, the fact that an employer has obtained medical evidence does not absolve it of the requirement to consult personally with the employee (East Lindsey District Council v G E Daubney  IRLR 181 EAT). In Dundee City Council v Sharp EAT/0009/11, the EAT stated that "the reasonableness of an employer's investigation in an ill-health case should not be judged by reference to the employee's length of service"; an employee is entitled to the same level of investigation irrespective of his or her length of service.
Employers that provide for permanent health insurance or other long-term disability benefits as a contractual term should exercise caution before dismissing an employee for ill health if that would result in the employee no longer being entitled to permanent health insurance. In Awan v ICTS UK Ltd  IRLR 212 EAT, the EAT held that an implied term of the contract of employment prohibited the employer from dismissing the employee for medical capability while he was entitled to receive long-term disability benefits.
Employers that offer ill-health early retirement should consider this option before dismissing an employee because of long-term sickness absence (First West Yorkshire Ltd t/a First Leeds v Haigh  IRLR 182 EAT). In Miller v Governing Body of the Ridings High School EAT/0204/08, the EAT confirmed that where ill-health retirement terminates a contract of employment by mutual consent there is no dismissal. However, where the circumstances of the retirement can be described as a forced resignation, that forced resignation may give rise to a (constructive) dismissal.
The guidance in British Home Stores Ltd v Burchell  IRLR 379 EAT in relation to conduct dismissals is relevant to ill-health capability dismissals (DB Schenker Rail (UK) Ltd v Doolan EAT/0053/09). Mr Doolan was deemed unfit to return to his role of production manager and was dismissed on the ground of capability. The EAT stated that, in determining whether or not Mr Doolan's dismissal was fair, the employment tribunal should have considered if the employer genuinely believed in its stated reason for dismissal, if it was reached after a reasonable investigation and if it had reasonable grounds to conclude as it did. The EAT allowed the employer's appeal against the tribunal finding of unfair dismissal and remitted the case to a fresh tribunal for rehearing.
The approach to persistent short-term absence is different. A formal medical investigation usually has little purpose because of the short-term nature of the employee's symptoms. Where there is an unacceptable level of absence the employer should review the employee's attendance record and reasons for absence. An employee should be given an opportunity to make representations concerning the level of absence and given appropriate warnings that his or her employment may be terminated if things do not improve. An ensuing dismissal will be justifiable if there is no improvement in attendance (Rolls-Royce Ltd v Walpole  IRLR 343 EAT).
Where the genuineness of the employee's illness is questioned, or there are concerns that the employee is exaggerating his or her condition, the matter is likely to be one of conduct, rather than capability. In Metroline West Ltd v Ajaj EAT/0185/15 & EAT/0295/15, the EAT held that an employee who makes up, or exaggerates the effects of, an injury or illness to take sick leave fraudulently is in fundamental breach of the implied term of trust and confidence. In such circumstances, the question for an employment tribunal will be whether or not the employer had reasonable grounds for its belief in the alleged misconduct, having carried out a reasonable investigation.
In City of York Council v Grosset EAT/0015/16, the EAT considered the intersection between claims for unfair dismissal under s.98 of the Employment Rights Act 1996 and discrimination arising from disability under s.15 of the Equality Act 2010. In City of York Council, the EAT upheld the tribunal decision that, while the employee's dismissal was fair, it amounted to unfavourable treatment arising from his disability that was not justified. The EAT noted that different statutory tests are involved in determining the fairness of a dismissal and whether or not a dismissal is discriminatory, and "different conclusions might properly be reached". The EAT went on state that "the touchstone must remain the specific wording of the relevant statutory provision, albeit whilst also having regard to the guidance provided by the case law". The case proceeded to the Court of Appeal, but only on the question of the correct construction of s.15(1) of the Equality Act 2010. In City of York Council v Grosset  EWCA Civ 1105 CA, the Court of Appeal upheld the decision of the EAT and dismissed the appeal.
In O'Brien v Bolton St Catherine's Academy  IRLR 547 CA, the Court of Appeal restored the tribunal decision that the employer's decision to disregard new medical evidence and dismiss an employee on long-term sickness absence amounted to unfair dismissal under s.98 of the Employment Rights Act 1996 and discrimination arising from disability under s.15 of the Equality Act 2010. The Court of Appeal stated that while the tests for determining whether or not a dismissal is fair and whether or not a dismissal is discriminatory are different "it would be a pity if there were any real distinction in the context of dismissal for long-term sickness where the employee is disabled within the meaning of the [Equality Act 2010]". The Court of Appeal went on to express the view that: "The law is complicated enough without parties and tribunals having routinely to judge the dismissal of such an employee by one standard for the purpose of an unfair dismissal claim and by a different standard for the purpose of discrimination law."
Dismissals relating to the qualifications of an employee are relatively uncommon. However, on the basis that an employer can establish the relevance of a qualification to the job and show that it has made it clear that the qualification is a prerequisite of continued employment, such a dismissal will be fair. The term "qualification" means any degree, diploma or other academic, technical or professional qualification relevant to the position that the employee held (s.98(3)(b) of the Employment Rights Act 1996). Many of the cases on lack of qualifications have arisen where individuals employed to drive are disqualified (Tayside Regional Council v McIntosh  IRLR 272 EAT).
Additional resources on ill health
- When is it permissible for an employer to terminate the contract of an employee on the grounds of ill health?
- In what circumstances might an employer need to obtain a medical report on an employee?
- From whom can an employer obtain a medical report on an employee?
- Is it acceptable to issue a formal warning to an employee whose level of attendance is unsatisfactory, even where there are genuine reasons for the various absences?
"How to" guidance
- How to deal with an employee with a poor sickness absence record
- How to deal with employees on long-term sickness absence
Line manager briefings
- Line manager briefing on short-term sickness absence
- Line manager briefing on long-term sickness absence
Policies and documents
- Short-term sickness absence policy
- Long-term sickness absence policy
- Obtaining medical reports policy
- Letter requesting that an employee attend a medical examination
- Form for an employee to consent to a medical examination
- Policy on short-term sickness absence return-to-work meetings
- Policy setting out structure of meeting to discuss a phased return to work following long-term sickness absence
Misconduct is a potentially fair reason for dismissal (s.98(2)(b) of the Employment Rights Act 1996). Usually single incidents of misconduct, for example being absent or late, will not merit dismissal. The position will be different if the conduct is repeated and previous warnings have been given under the employer's disciplinary procedure. More serious misconduct, such as theft from an employer, may justify summary dismissal.
Examples of behaviour that could come under the misconduct category are too numerous to list. Very often employers include examples of what constitutes both misconduct and gross misconduct in their disciplinary procedure. If this is done, care should be taken to ensure that any list given is expressed as being non-exhaustive. The list should also cross-reference to any other relevant policy if breaches of that policy would entitle the employer to take disciplinary action. Whether or not misconduct amounts to gross misconduct is a question of fact and may depend on the employee's role. For example, in Adesokan v Sainsbury's Supermarkets Ltd  IRLR 346 CA, the Court of Appeal held that a manager's single act of negligence could amount to gross misconduct.
The Acas code of practice on disciplinary and grievance procedures covers disciplinary situations including misconduct.
Guidance as to the proper approach for tribunals to take in misconduct cases is set out in British Home Stores Ltd v Burchell  IRLR 379 EAT. A tribunal must examine first whether or not the employer believed that the employee was guilty of misconduct; second whether or not the employer had reasonable grounds for that belief; and third whether or not the employer had carried out as much investigation into the matter as was reasonable in the circumstances. It is not necessary for the employer to have conclusive proof of the employee's misconduct, only a genuine and reasonable belief.
The Employment Appeal Tribunal (EAT) in JP Morgan Securities plc v Ktorza EAT/0311/16 held that it is not necessary to establish that the conduct is culpable for it to fall within s.98(2)(b). The test is to start with the reason for the dismissal, review every aspect of it and decide whether or not, taken as a whole, the employer acted reasonably in treating it as a sufficient reason to dismiss.
A dismissal can be a fair conduct-related dismissal even if the employee's conduct does not amount to gross misconduct (Weston Recovery Services v Fisher EAT/0062/10). The EAT in Weston found that the employer had passed the test in British Home Stores Ltd v Burchell  IRLR 379 EAT. It had followed a fair procedure and the dismissal fell within the range of reasonable responses. However, although the dismissal was not unfair, it did amount to a wrongful dismissal (see Termination of employment > Notice and pay in lieu of notice > Dismissal in breach of contract: wrongful dismissal) and the claimant was entitled to damages for breach of contract in respect of notice due.
It will not always be appropriate for an employer to follow the Burchell guidelines. For example, where misconduct is admitted at an early stage or where the employee has been convicted of a criminal offence, it may be reasonable for the employer to dispense with an investigation, but this will not always be the case (Whitbread plc (t/a Whitbread Medway Inns) v Hall  IRLR 275 CA).
In the unusual cases where there is more than one suspect but the culprit is unidentifiable, the Burchell tests do not apply. In such circumstances, where an employer cannot discover after investigation which of a number of individuals is guilty of the misconduct, it may be fair to dismiss more than one person on reasonable suspicion which falls short of belief (Monie v Coral Racing Ltd  IRLR 464 CA; Parr v Whitbread plc t/a Threshers Wine Merchants  IRLR 39 EAT; Frames Snooker Centre v Boyce  IRLR 472 EAT).
Sometimes an employer will wish to dismiss an employee as a result of conduct that occurs outside the workplace. This is permissible provided that the conduct complained of could be thought likely to affect the continued employment relationship.
When dismissals are contemplated on the basis of a criminal offence committed outside employment, employers should consider the approach set out in para.30 of the Acas code of practice on disciplinary and grievance procedures. This states that the fact that an employee has been charged with or convicted of a criminal offence not related to work is not normally in itself a reason for disciplinary action. Consideration should be given to what effect the charge or conviction has on the employee's suitability to do the job and the employee's relationship with his or her employer, work colleagues and customers.
The types of criminal offence that are most likely to affect the employment relationship are those involving dishonesty/violence or sexual offences, but in each case this would depend on the nature of the individual's job.
Where an employee has been charged with an offence and is awaiting trial, his or her employer faces a difficult problem. Either it proceeds with its own investigation, or it awaits the outcome of the criminal proceedings.
There is no rule that an employer needs to await the outcome of a criminal trial before dismissing an employee but it will need to obtain sufficient material to justify any dismissal.
Very often it will be difficult for an employer to carry out any meaningful internal investigation as the employee, on legal advice, may well decide to stay silent in order not to prejudice him- or herself in the criminal proceedings.
In such circumstances an employer can dismiss but only if the evidence that has been produced is, in the absence of any other explanation, indicative of guilt. One big disadvantage of awaiting the outcome of a criminal trial is the excessive delay in such matters being dealt with by the courts.
There will be cases, however, where an employer will feel it more prudent to await the outcome of the criminal trial. In doing so the employer will not necessarily be bound by the trial's outcome. Many acquittals are obtained on technical grounds and employers may wish to make the decision whether or not to dismiss on the basis of evidence that comes to light at the trial. Even if there is insufficient evidence for a criminal conviction, there may be sufficient evidence to show a serious breach of duty justifying dismissal. This might be the case where, for example, an individual was charged with theft and acquitted but the evidence showed that he or she was in breach of company rules as to how money from clients was handled.
In Secretary of State for Justice v Mansfield EAT/0539/09, the EAT confirmed that an employer has a wide discretion when forming a view on whether or not internal disciplinary proceedings should continue alongside a criminal investigation, or be postponed.
Once an employer has decided to invoke a disciplinary procedure the first part of the proceedings will be the investigation. Ideally this should be conducted by someone who is not involved and has no knowledge of the circumstances concerning the misconduct. A note of the investigation should be kept and a report prepared for presentation at the disciplinary hearing. Statements should be taken from witnesses. In Sainsbury's Supermarkets Ltd v Hitt  IRLR 23 CA, the Court of Appeal confirmed that the "range of reasonable responses" test applies to the investigation. A tribunal should not substitute its view of what investigation should have taken place so long as the employer's investigation fell within the range available to a reasonable employer.
The more serious the consequences of dismissal for an employee, the more thorough the disciplinary investigation should be (Salford Royal NHS Foundation Trust v Roldan  IRLR 721 CA). In Stuart v London City Airport EAT/0273/12, the EAT considered the tribunal's conclusion that the employer had conducted a reasonable investigation into the allegation of misconduct against Mr Stuart. The EAT held that the employer's failure to obtain and consider evidence that could exonerate Mr Stuart was "objectively unreasonable and the tribunal's conclusion to the contrary was unreasonable". In Stuart v London City Airport Ltd  EWCA Civ 973 CA, the Court of Appeal overturned the EAT decision and restored the employment tribunal decision that Mr Stuart's dismissal was fair. It noted that the appeal did not raise any questions of principle, and the issues before the tribunal were whether or not the employer had reasonable grounds for its belief in the employee's guilt, and whether or not it had "carried out a sufficient investigation - that is, such an investigation as fairness required in the circumstances of the case - before reaching that conclusion". The Court of Appeal found that the EAT was wrong to find that the tribunal decision was perverse, observing that the tribunal directed itself correctly and addressed the criticisms that Mr Stuart had made of the disciplinary investigation.
In good time prior to the disciplinary hearing the employee should be told what the case against him or her is. Paragraph 9 of the code states that the employee should be notified in writing that there is a disciplinary case to answer and that "the notification should contain sufficient information about the alleged misconduct ... and its possible consequences to enable the employee to prepare to answer the case at a disciplinary meeting". Paragraph 9 goes on to state that, "it would normally be appropriate to provide copies of any written evidence, which may include any witness statements, with the notification".
The allegations should be as specific as possible to allow the employee properly to defend him- or herself. In Strouthos v London Underground Ltd  IRLR 636 CA, the Court of Appeal emphasised that the charge against the employee should be precisely framed, that the evidence should be confined to the particulars set out in the charge, and that normally only the matters charged can form the basis for dismissal. Witness statements should also be made available to the employee or his or her representative in good time before the hearing.
The disciplinary hearing itself should be conducted by an experienced manager who has been given the appropriate training. The individual should not have been involved in the investigation, although in small firms this may not always be possible.
Where possible the employer should arrange for the attendance of witnesses and allow them to be questioned. Paragraph 12 of the code provides that: "The employee should be given a reasonable opportunity to ask questions, present evidence and call relevant witnesses. They should also be given the opportunity to raise points about any information provided by the witnesses." However, an employee has no absolute right to cross-examine witnesses and there may be circumstances, in sensitive cases, where an employer decides simply to present the evidence and seek the employee's comments rather than subject individuals to cross-examination.
There is a statutory right (under ss.10-15 of the Employment Relations Act 1999) for an employee to be accompanied at a disciplinary hearing by a fellow employee or union official (and it has always been considered good practice by Acas for employers to provide for this). If an employee turns up to a disciplinary hearing without representation, a prudent employer will remind him or her of the right to be accompanied.
The statutory right to be accompanied does not extend to legal representation. There have been a number of cases in which employees have argued that, where the outcome of a disciplinary hearing could result in the employee being excluded from working in his or her chosen profession, the right to a fair and public hearing under art.6 of the European Convention on Human Rights is engaged, and a refusal to permit legal representation constitutes a breach of his or her right under art.6. However, the current body of case law suggests that art.6 will be engaged in only the most exceptional circumstances. In Kulkarni v Milton Keynes Hospital NHS Trust and Secretary of State for Health  IRLR 829 CA, the Court of Appeal held that a doctor should be allowed to be accompanied by a lawyer at a disciplinary hearing in circumstances where he or she is facing charges that are of such gravity that, in the event they are proven, he or she will effectively be barred from employment in the NHS. However, in R (on the application of G) v Governors of X School and Y City Council  IRLR 756 SC, the Supreme Court held that the employer's refusal to allow the employee to be accompanied by a lawyer at a disciplinary hearing where a consequence of the hearing could be the addition of his name to the register of individuals deemed unsuitable to work with children, which is held by the Independent Safeguarding Authority (ISA) was not a breach of his human rights under art.6. The Supreme Court, which concluded that case law from the European Court of Justice takes a fact-sensitive, pragmatic approach to the right to legal representation, stated that the school's disciplinary proceedings themselves did not engage art.6 because they did not directly determine or exert a substantial influence over the ISA proceedings.
In R (on the application of Kirk) v Middlesbrough Council and another  IRLR 699 HC, the High Court held that the employee was not entitled to legal representation at internal disciplinary proceedings, on the basis that art.6 was not engaged because the case concerned a private law matter and involved a standalone disciplinary issue, the potential consequences of which "came nowhere near the severity" involved in previous authorities. Further, in R (on the application of Puri) v Bradford Teaching Hospital NHS Trust  IRLR 582 HC, the High Court held that art.6 was not engaged in internal disciplinary proceedings where the employee was not, as a result, deprived of the right to practise his profession. In Mattu v University Hospitals of Coventry and Warwickshire NHS Trust  EWHC 2068 HC, the High Court also held that internal disciplinary proceedings did not engage art.6. In rejecting Dr Mattu's argument that his dismissal by the trust was the equivalent of being struck off the medical register and barred from practising in the NHS, the High Court noted that the internal disciplinary proceedings did not directly affect Dr Mattu's registration with the General Medical Council and it remained open to him to seek to practise his profession within both the private and public sector. In Mattu v University Hospitals of Coventry and Warwickshire NHS Trust  IRLR 661 CA, the Court of Appeal agreed that the trust's decision to dismiss Dr Mattu did not engage art.6.
Having heard the evidence and representations from both parties the employer will usually adjourn to consider the case before giving its decision. First it will have to decide whether or not the employee is guilty of the conduct complained of and if it is the correct penalty to impose. Acas recommends that this will comprise either an oral or written warning or a final warning. If the conduct has occurred in the duration of a final written warning or indeed is serious enough to constitute gross misconduct the employer will consider dismissal. In Davies v Sandwell Metropolitan Borough Council  IRLR 374 CA, the Court of Appeal reiterated that it is legitimate for an employer to take into account a prior (unexpired) final written warning when deciding to dismiss an employee, provided that the warning was issued in good faith and was not manifestly inappropriate. In Diosynth Limited v Thomson  IRLR 284 CS, the Court of Session held that it was unreasonable for the employer to take into account an expired disciplinary warning in deciding what penalty should be imposed, and in Airbus UK v Webb EAT/0453/06 the EAT followed this approach, stating that an employment tribunal is obliged to ignore expired disciplinary warnings when determining the fairness of a dismissal. However, the Court of Appeal overturned this decision, holding that, although it did not doubt the correctness of the decision in Diosynth, the case was not authority for the wide proposition that an expired warning can never be taken into account when an employer is deciding whether or not to dismiss for misconduct. The facts in Webb could be distinguished from those in Diosynth. In Diosynth, the expired warning had tipped the balance in favour of dismissal, as the other factors taken together would not have justified dismissal - it was the principal reason for dismissal. In Webb, the employer had shown that the subsequent misconduct on its own was the principal reason for dismissal, and its response was reasonable in the circumstances (Airbus UK Ltd v Webb  IRLR 309 CA).
In Wincanton Group Plc v Stone (formerly known as Joyce) and another  IRLR 178 EAT, which concerned the dismissal of two employees who had received earlier warnings, the EAT stated that an earlier warning is valid where there were prima facie grounds for issuing it and it was issued in good faith. Where an earlier warning is valid, the employment tribunal should "take into account the fact of that warning" and any proceedings, such as an internal appeal, that may affect its validity. A tribunal may also "take account of the employers' treatment of similar matters relating to others in [its] employment" but it must not look behind a valid warning to take account of the factual circumstances that gave rise to it. The EAT went on to state that the "tribunal must always remember that it is the employer's act [of dismissal] that is to be considered in light of s.98(4) [of the Employment Rights Act 1996] and that a final written warning always implies, subject only to the individual terms of a contract, that any misconduct of whatever nature will often and usually be met with dismissal, and it is likely to be by way of exception that that will not occur". In Way v Spectrum Property Care Limited  EWCA Civ 381 CA, in which the employee would not have been dismissed but for a final written warning, the Court of Appeal confirmed that the EAT approach in Wincanton and Davies v Sandwell Metropolitan Borough Council  IRLR 374 CA was correct and that a warning given in bad faith cannot be relied on to justify dismissal.
Wincanton Group Plc, Way and Davies were considered and applied in Bandara v British Broadcasting Corporation EAT/0335/15. In Bandara, the EAT held that the employment tribunal did not err in finding that the final written warning issued by the employer to Mr Bandara was manifestly inappropriate for the conduct with which he had been charged and dismissed the employer's cross-appeal on this point. The EAT held that where an employee is dismissed for misconduct following an earlier warning that the tribunal has found to be manifestly inappropriate, the tribunal must examine the weight the employer attached to that warning in deciding whether or not the decision to dismiss was within the range of reasonable responses. The EAT stated that if the employer "treated the warning as no more than background … and if in reality it dismissed for the misconduct alleged in the new disciplinary proceedings, the tribunal may be entitled to find that the dismissal was fair". However, the EAT warned that: "If the employer attached significant weight to the [manifestly inappropriate] warning … it would be difficult to see how the employer's decision [to dismiss] can have been reasonable." The EAT found that this approach had not been adopted by the tribunal. Accordingly, it allowed Mr Bandara's appeal and remitted the case to the same tribunal to undertake such an assessment.
In NHS 24 v Pillar EAT/0005/16, it was argued that the investigation process was unfair because it was too thorough. The employee was dismissed for gross misconduct after three serious patient safety incidents (PSIs). The first two PSIs had not resulted in a warning or disciplinary sanction. The employment tribunal held that the inclusion of the earlier PSIs in the investigation report fell foul of the reasonable investigation requirement and rendered the dismissal unfair. However, the EAT reversed the decision and substituted a finding that the dismissal was fair. The EAT held that including details of previous non-disciplinary incidents in the investigation report did not make the dismissal unfair. Thoroughness in an investigation process could not be the basis for a finding of unfairness.
In Sarkar v West London Mental Health NHS Trust  IRLR 508 CA, the Court of Appeal restored a tribunal decision that an employer's decision to dismiss for gross misconduct, after it had attempted to resolve matters using a procedure applicable to minor allegations of misconduct, was outside the range of reasonable responses, and therefore unfair. The tribunal did not err in finding that it was inconsistent of the trust to dismiss the employee for gross misconduct for the same allegations.
In Ham v The Governing Body of Beardwood Humanities College EAT/0179/15, the EAT upheld the employment tribunal decision that the dismissal of the employee for a series of incidents of minor misconduct was fair, notwithstanding that the employee had not been warned. In reaching its decision, the EAT took into account that the employer had considered whether or not a lesser sanction was appropriate in the circumstances.
In Mbubaegbu v Homerton University Hospital NHS Foundation Trust EAT//0218/17 & EAT/0306/17, the EAT held that the summary dismissal of a surgeon was fair where the trust had relied on a pattern of conduct, but there had been no single act amounting to gross misconduct. The EAT said that the tribunal's finding demonstrated quite clearly that the relationship of trust and confidence had been undermined not only by the employee's pattern of conduct, which cumulatively raised concerns over patient safety, but also by his "continued inconsistency" in his responses during the disciplinary hearing.
Before imposing any sanction the employer should consider mitigating factors, such as the employee's general record, age, position and length of service, and whether or not the conduct could be caused by an illness. If there is a possibility that the conduct is illness related, the employee should be referred to an occupational health doctor for assessment before a decision is made (Governing Body of Hastingsbury School v Clarke EAT/0373/07 & EAT/0374/07). In Orr v Milton Keynes Council  IRLR 317 CA, the Court of Appeal held that, when considering the dismissal of an employee for misconduct, an employer is not taken to have known mitigating facts that are known to the employee's manager but are withheld from the dismissing officer provided that such knowledge could not have been reasonably acquired through an appropriate disciplinary procedure.
The employer should be able to explain any disparity of treatment between employees. However, the fact that an employer has treated previous breaches of a disciplinary rule differently may not necessarily establish unfairness. In Hadjioannou v Coral Casinos Ltd  IRLR 352 EAT, the EAT held that tribunals "would be wise to scrutinise arguments based on disparity with particular care".
In General Mills (Berwick) Ltd v Glowacki EAT/0139/11, the EAT overturned the employment tribunal decision that the summary dismissal of the employee for a gross breach of health and safety procedures was unfair by reason of the employer's earlier different treatment of another employee for the same offence. The EAT held that the employer's explanation that, in the earlier incident, the employee had been dismissed on capability grounds because he had sustained serious injuries that prevented him from taking part in the disciplinary process, "was a sufficient basis [on] which any reasonable employer might have considered it appropriate to have treated two employees differently, given the range of responses reasonably open to an employer faced with those facts".
In MBNA Ltd v Jones EAT/0120/15, the EAT held that a dismissal was fair even though another employee involved in the misconduct at a work event received a more lenient sanction. The EAT found that the tribunal should have considered whether or not there were any differences in the circumstances of the two employees to justify the disparity of treatment. On the facts of the case, the EAT held that there were key distinctions and that the dismissal was fair in all the circumstances.
However, in Newbound v Thames Water Utilities Ltd  IRLR 734 CA, where, for related offences, the claimant was dismissed but a colleague received a lesser sanction, the Court of Appeal held that the employment tribunal was entitled to find the dismissal unfair on account "of such an obvious case of unjustified disparity".
A minute or notes of the disciplinary hearing should be taken.
An integral part of a fair disciplinary procedure is a right to appeal. Usually the appeal will be to a higher level of management. Paragraph 26 of the code provides that "the appeal should be dealt with impartially and, wherever possible, by a manager who has not previously been involved in the process". The employee has a statutory right to be accompanied at an appeal hearing.
Appeals take the form of either a rehearing or a review of the evidence. From an employer's point of view the latter course has some attractions in that it will usually be quicker. The advantage of a complete rehearing is that the appeal panel may cure any procedural defects that have arisen earlier in the process and turn an otherwise potentially unfair dismissal into a fair one. This may happen, for example, where the employee has had insufficient time to consider witness statements before the disciplinary hearing but has ample opportunity before the appeal hearing to do so. It used to be thought that such defects could not be cured if the appeal was by way of review. However, in Taylor v OCS Group Ltd  IRLR 613 CA the Court of Appeal made it clear that this is incorrect. There is no law that a review cannot cure earlier procedural defects. The key is that the hearing is comprehensive. In practice, however, it is more likely that a rehearing will be more comprehensive than a review, and that an employer will have a better chance of arguing that any procedural defects have been cured by a rehearing.
As with the disciplinary hearing proper notes should be taken of the appeal hearing. These will be crucial at the employment tribunal stage where an employer seeks to demonstrate that a fair procedure has been followed.
Social media-related misconduct
In Game Retail Ltd v Laws EAT/0188/14, the EAT considered the misuse of Twitter by an employee for the first time. In Game Retail Ltd, the employee, who sent a number of tweets from his Twitter account that his employer considered to be offensive and liable to be viewed by anyone on Twitter, was dismissed for gross misconduct. The employee followed 100 Game retail stores and 65 followed him in return. The EAT upheld the employer's appeal against the employment tribunal's finding of unfair dismissal noting that the employment judge had essentially failed to have proper regard to the public nature of Twitter in reaching his decision. The employee's intention to use his account for personal use had to be balanced against the reality that his tweets were available to 65 stores. Further, the EAT observed that the employee had not made any attempt to restrict access to his tweets by means of privacy settings, so they were publicly visible by default, including beyond his followers.
Additional resources on misconduct
- What should an employer do on becoming aware that an employee has committed an act of misconduct?
- Will it always be necessary to hold an investigatory meeting with an employee suspected of misconduct?
- Who should carry out an investigatory meeting with an employee suspected of misconduct?
- When is it appropriate to suspend an employee who is suspected of misconduct?
- For how long should an employee be suspended while a disciplinary investigation into alleged misconduct is carried out?
- Is it permissible to dismiss an employee on the grounds of misconduct that occurred outside the workplace?
- If an employee's misconduct is the subject of a criminal investigation, can the employer continue internal disciplinary proceedings?
- If an employee is charged with, or convicted of, a work-related criminal offence, should the employer conduct its own investigation before taking disciplinary action?
- Is an employer obliged to impose the same disciplinary action where two employees break the same rule?
- What is gross misconduct?
- What can an employer do where it suspects that an employee has committed an act of gross misconduct, but has no concrete proof?
- How does a tribunal gauge whether an employee has been unfairly dismissed on the basis of misconduct?
Policies and documents
- Letter confirming the dismissal of an employee for misconduct
- Letter to an employee confirming their dismissal for gross misconduct
"How to" guidance
- How to handle gross misconduct dismissals
- How to deal with an employee who has committed or been charged with committing an offence
Line manager briefings
Audio and video
Redundancy is a potentially fair reason for dismissal (s.98(2)(c) of the Employment Rights Act 1996). Presuming that the tribunal is satisfied that the reason for an individual's dismissal is redundancy as defined in s.139 of the Employment Rights Act 1996 it will go on to consider whether or not the employer followed a fair procedure (see Termination of employment > Redundancy Rights > Definitions for further information on the definition of redundancy). In particular the tribunal will wish to be satisfied that the employer has warned and consulted with the employee, that the selection process was fair and that the employer considered the question of alternative employment as a means of avoiding dismissals.
In Williams and others v Compair Maxam Ltd  IRLR 83 EAT, the Employment Appeal Tribunal (EAT) set out principles that it would expect employers to adopt when dismissing individuals on the grounds of redundancy where those individuals are represented by a trade union. These principles have been adopted generally by tribunals when assessing fair procedure both in cases where employees are represented by unions or employee representatives and in cases when they are not. The following are the factors suggested by the EAT as relevant to ascertaining the reasonableness of an employer's actions.
- The employer will seek to give as much warning as possible of impending redundancies so as to enable the union and the employees who may be affected to take early steps to inform themselves of the relevant facts, consider possible alternative solutions and, if necessary, find alternative employment in the undertaking or elsewhere.
- The employer will consult with the union as to the best means by which the desired management result can be achieved fairly and with as little hardship to the employees as possible. In particular the employer will seek to agree with the union the criteria to be applied in selecting the employees to be made redundant. When a selection has been made, the employer will consider with the union whether or not the selection has been made in accordance with those criteria.
- Whether or not an agreement as to the criteria to be adopted has been agreed with the union, the employer will seek to establish criteria for selection which, so far as possible, do not depend solely on the opinion of the person making the selection but can be objectively checked against such things as attendance records, efficiency at the job, experience and length of service.
- The employer will seek to ensure that the selection is made fairly in accordance with these criteria and will consider any representations the union may make as to such selection.
- The employer will seek to see if, instead of dismissing an employee, alternative employment could be offered.
There is a duty on employers to consult with recognised trade unions or elected representatives where they propose to dismiss 20 or more employees at one establishment within a period of 90 days or less on redundancy grounds (s.188 of the Trade Union and Labour Relations (Consolidation) Act 1992) (see Termination of employment > Informing and consulting prior to redundancies for further information on collective consultation obligations).
Where there is no obligation to consult with the union or employee representatives, there is still a duty to consult with individuals at each stage of the process. This includes at an early stage when the overall need for redundancies is being considered, when employees are being selected for redundancy and even during the notice period (see Dyke & Others v Hereford & Worcester County Council  ICR 800).
Tribunals have consistently emphasised the importance of consultation. Although usually a dismissal will be unfair where there has been no consultation, the effect of a failure to consult is a matter for the tribunal and, in exceptional cases, an employer may have acted reasonably if no consultation took place (see Duffy v Yeomans & Partners Ltd  IRLR 642 CA and Mugford v Midland Bank plc  IRLR 208 EAT).
The fact that an undertaking is small does not absolve the employer from the duty to consult although it may affect the nature of the consultation process required (De Grasse v Stockwell Tools Ltd  IRLR 269 EAT).
In Capita Hartshead Ltd v Byard  IRLR 814 EAT, the EAT held that tribunals are "entitled, if not obliged, to consider with care and scrutinise carefully the reasoning of the employer to determine if it has 'genuinely applied' its mind to the issue of who should be in the redundancy selection pool" and that, where the employer has genuinely applied its mind to the issue, it will be difficult, but not impossible, for an employee to challenge its decision. The EAT upheld the decision in that case that a pool of one employee was unfair where there were other employees doing the same job. In Wrexham Golf Club Co Ltd v Ingham EAT/0190/12, the EAT held that, where the employer put an employee into a redundancy "pool of one" and did not consider the possibility of putting a wider pool of employees at risk of redundancy, the employment tribunal did not properly consider whether or not restricting the pool to one fell within the "range of reasonable responses". The EAT ordered that the case be reheard by a freshly constituted tribunal to consider whether or not it was within the range of reasonable responses for the club, once it had decided that the role of club steward was to disappear, to focus on the club steward as the person at risk of redundancy, without developing a pool.
Having selected the relevant pool of employees at risk of redundancy, the employer should adopt appropriate selection criteria. Subject to the duty to consult with unions, representatives and individuals, the adoption of criteria is a matter of management discretion. Whereas, as emphasised in Williams and others v Compair Maxam Ltd  IRLR 83 EAT, it is desirable to choose criteria that are as objective as possible, it is recognised by tribunals that employers are also likely to rely upon some assessment of employees' ability and performance as well as purely objective criteria.
In E-Zec Medical Service Limited v Gregory EAT/0192/08, the use and application of subjective selection criteria, which were incapable of being objectively verified, by a single manager who did not seek any input from colleagues and failed to make any notes of how he had arrived at his scores contributed to a finding of unfair dismissal. The failure of the employer to consult with the union on the selection criteria used or to explain the selection process to staff also contributed to the finding of unfair dismissal.
Where an employer fails to consider the question of alternative employment, it risks a finding that the procedure adopted was unfair. This duty extends to considering employment in associated companies. The offer of alternative employment at this stage should not be confused with "suitable alternative employment" under the statutory scheme, which, if refused, may disentitle the employee to a redundancy payment (see Termination of employment > Redundancy rights).
The following is a checklist of steps that an employer should seek to follow in the event of redundancies. It should:
- warn as early as is practicable;
- seek volunteers if appropriate;
- consult at every stage with the individual employee/union/employee representatives;
- identify the pool for selection;
- adopt criteria (preferably objective);
- apply those criteria fairly;
- actively consider alternative employment; and
- continue to monitor the position including during the notice period.
See Termination of employment > Redundancy rights > Individual selection and consultation for further information.
Additional resources on redundancy
- What is the correct procedure for making redundancies?
- In a redundancy situation, how should an employer select which employees to make redundant?
- In which redundancy situations will it not be necessary to determine a redundancy selection pool?
- When should the employer begin collective redundancy consultation with employees?
- Who should be consulted about employee redundancies?
- What should the employer and employee discuss at an individual redundancy consultation meeting?
- In a redundancy situation, what obligations does an employer have with regard to offering suitable alternative employment?
Policies and documents
- Redundancy policy
- Policy on selection for redundancy
- Policy on right of appeal where employee considers that redundancy selection criteria have been unfairly applied
- Policy on finding suitable alternative employment for redundant employees
"How to" guidance
- How to decide which employees to include in a redundancy pool
- How to choose and apply redundancy selection criteria
- How to consult on an individual basis during a redundancy exercise
- How to consider offers of suitable alternative work for redundant employees
Line manager briefings
Inadmissible reasons for redundancy selection
By virtue of s.105(1) of the Employment Rights Act 1996 and s.153 of the Trade Union and Labour Relations (Consolidation) Act 1992, a redundancy dismissal will be automatically unfair where the principal reason for the dismissal was that the individual was redundant but it is shown that the circumstances constituting the redundancy applied equally to one or more other employees in the same undertaking who held positions similar to that held by the employee and who have not been dismissed by the employer and the reason (or if more than one reason, the principal reason) the employee was selected for the dismissal was an "inadmissible reason".
The inadmissible reasons are:
- the reasons related to jury service set out in s.98B of the Employment Rights Act 1996;
- the health and safety reasons set out in s.100 of the Employment Rights Act 1996;
- the Sunday working reasons set out in s.101 of the Employment Rights Act 1996;
- the working time reasons specified in s.101A of the Employment Rights Act 1996;
- the pension scheme trustee reasons set out in s.102 of the Employment Rights Act 1996;
- the employee representative reasons set out in s.103 of the Employment Rights Act 1996;
- the public interest disclosure reasons specified in s.103A of the Employment Rights Act 1996;
- asserting a statutory right under s.104 of the Employment Rights Act 1996;
- the National Minimum Wage reasons specified in s.104A of the Employment Rights Act 1996;
- the tax credit reasons set out in s.104B of the Employment Rights Act 1996;
- the flexible working reasons set out in s.104C of the Employment Rights Act 1996;
- the reasons connected with the requests in relation to study or training set out in s.104E of the Employment Rights Act 1996;
- the reasons relating to blacklisting on the grounds of trade union membership or activities set out in s.104F of the Employment Rights Act 1996;
- the industrial action reasons set out in s.238A of the Trade Union and Labour Relations (Consolidation) Act 1992;
- the reasons specified in the Transnational Information and Consultation of Employees Regulations 1999;
- asserting a right as a part-time worker set out in the Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000;
- asserting a right as a fixed-term employee as set out in the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002;
- the reasons set out in the European Public Limited-Liability Company Regulations 2004;
- the reasons specified in the Information and Consultation of Employees Regulations 2004;
- the reasons set out in the Occupational and Personal Pension Schemes (Consultation by Employers and Miscellaneous Amendment) Regulations 2006 (SI 2006/349);
- the reasons set out in reg.17(3) of the Agency Workers Regulations 2010 (SI 2010/93) (s.105(7N) of the Employment Rights Act 1996); and
- the reasons relating to pensions auto-enrolment set out in s.104D of the Employment Rights Act 1996.
Where it is shown that the reason or principal reason for selection for redundancy is related to the exercise of family-friendly rights, the dismissal will also be automatically unfair (under reg.20 of the Maternity and Parental Leave etc Regulations 1999 (SI 1999/3312), reg.29 of the Paternity and Adoption Leave Regulations 2002 (SI 2002/2788) or reg.43 of the Shared Parental Leave Regulations 2014 (SI 2014/ 3050)).
From 11 January 2016, under reg.2(1) and (3) of the Exclusivity Terms in Zero Hours Contracts (Redress) Regulations 2015 (SI 2015/2021), a dismissal will be regarded as automatically unfair where the principal reason for it is that the worker breached a provision or purported provision of a zero hours contract to which s.27A(3) of the Employment Rights Act 1996 applies (ie an exclusivity term).
Additional resources on inadmissible reasons for redundancy selection
- In what circumstances does an employee not need minimum qualifying service to claim unfair dismissal?
Contravention of a statutory duty or restriction
The dismissal of an employee may be fair if he or she could not continue to work without contravention of a statutory duty or restriction (s.98(2)(d) of the Employment Rights Act 1996). Dismissals under this head are relatively unusual. A typical example is the dismissal of an employee who has been disqualified from holding a licence and whose duties involve driving. Cases have also centred around an employee's continuing entitlement to work in the UK after the expiry of his or her original work visa.
In Klusova v London Borough of Hounslow  EWCA Civ 1127, the employee, at the commencement of employment, had the right to work in the UK until a certain date. After that date had passed, the employer made some enquiries that led it to believe that the employee no longer had the right to work in the UK and that it would be an offence under immigration laws to continue employing her. Consequently, the employer dismissed the employee relying on s.98(2)(d). It later transpired that the employee did, in fact, still have the right to work in the UK. The Court of Appeal upheld the employment tribunal decision that the employer was entitled to rely on a contravention of a statutory duty or restriction as the reason for dismissal only where there was an actual contravention. Where there was no actual contravention, the employer's genuine belief that there was a contravention would not justify the dismissal on that ground. However, the Court of Appeal agreed with the Employment Appeal Tribunal that a genuine belief in a contravention was capable of amounting to "some other substantial reason" for dismissal (see Some other substantial reason).
In Baker v Abellio London Ltd  IRLR 186 EAT, the employee had the right of abode but did not provide the required documentation during his employer's audit of its workforce's right to work in the UK. The employment tribunal held that the dismissal was fair as the employer could not continue to employ him without contravening a statutory duty or restriction. However, the EAT found that the employee was not subject to immigration control and did not require leave to enter or remain in the UK. Therefore, the employer would not have been contravening immigration requirements by continuing to employ him and so could not rely on s.98(2)(d) to dismiss (although see Some other substantial reason).
An employer must still act reasonably in deciding to dismiss because of a contravention of a statutory duty or restriction. Consideration should be given to the extent to which the statutory restriction affects the employee's ability to do his or her job, the length of the restriction and whether or not the employee can be redeployed. If the decision is taken to dismiss the employee, it would be prudent for the employer to follow a normal dismissal procedure and, as a minimum, provide a right of appeal (Kelly v University of Southampton EAT/0295/07). If the contravention interferes with only a small part of the employee's duties it may be reasonable for the employer to seek to reallocate those duties elsewhere in the organisation. This would be the case, for example, where an employee is disqualified from driving for a short period and driving forms only an incidental part of the role he or she was employed to undertake.
Additional resources on contravention of a statutory duty or restriction
Policies and documents
- Contract clause requiring an employee to hold a driving licence
- Letter inviting an employee disqualified from driving to a meeting to discuss the options available to them
- Letter offering redeployment to an employee following a disqualification from driving meeting
- Letter dismissing an employee following a disqualification from driving meeting
- Letter dismissing an employee who has refused to be redeployed following a disqualification from driving meeting
- Letter inviting an employee dismissed because of their disqualification from driving to attend a dismissal appeal hearing
- Letter informing an employee dismissed because of their disqualification from driving of the outcome of the dismissal appeal hearing
"How to" guidance
Some other substantial reason
If a dismissal does not come within one of the designated statutory reasons listed above, it may still be fair if the employer can show that it was for "some other substantial reason of a kind such as to justify the dismissal of an employee holding a position which the employee held" (s.98(1)(b) of the Employment Rights Act 1996). Examples of some of the more common circumstances that tribunals have found to constitute some other substantial reason capable of justifying dismissal are:
- a necessary business reorganisation (see Hollister v The National Farmers' Union  IRLR 238 CA; Catamaran Cruisers Ltd v Williams and others  IRLR 386 EAT);
- economic, technical or organisational reasons entailing changes in the workforce following the transfer of an undertaking (reg.7(3)(b) of the Transfer of Undertakings (Protection of Employment) Regulations 2006;
- the expiry of a fixed-term contract (see J Terry v East Sussex County Council  IRLR 332 EAT);
- pressure from a customer or third party (see Dobie v Burns International Security Services (UK) Ltd  IRLR 329 CA; Henderson v Connect (South Tyneside) Ltd  IRLR 466 EAT; Masini v Compass Group UK & Ireland Ltd ET/2701121/2014);
- dismissal of the replacement for an employee suspended on medical grounds (s.106(2) of the Employment Rights Act 1996);
- dismissal of the replacement for an employee absent due to pregnancy (s.106(1) of the Employment Rights Act 1996);
- personality clashes or a breakdown in the working relationship between employees (CA Treganowan v Robert Knee & Co Ltd  IRLR 247 HC and Perkin v St George's Healthcare NHS Trust  IRLR 934 CA) (it is possible that the effects of an employee's personality could also lead to circumstances that are better classified as misconduct);
- dismissal of a chief executive, following a hostile takeover, in accordance with a term in his contract that provided that his employment would terminate automatically in the event of his ceasing to be a director of the company (see Cobley v Forward Technology Industries plc  IRLR 706 CA); and
- dismissal of a senior employee of a public authority in order to avoid potential reputational damage following a "limited disclosure" from the Metropolitan Police that the employee posed a continuing risk to children even though he did not work with children (A v B EAT/0206/09).
In Klusova v London Borough of Hounslow  EWCA Civ 1127, the Court of Appeal agreed with the Employment Appeal Tribunal (EAT) that a genuine belief in a contravention of a statutory duty or restriction was capable of amounting to some other substantial reason for dismissal. The EAT followed Klusova in Baker v Abellio London Ltd  IRLR 186 EAT. The EAT held that, although the continued employment of Mr Baker was not unlawful, the employer could rely on "some other substantial reason" under s.98(1)(b) of the Employment Rights Act 1996 as a potentially fair reason to dismiss. However, as the employment tribunal had not made sufficient findings of fact to determine the issue, the case was remitted back for further consideration.
In Nayak v Royal Mail Group Ltd EAT/0011/15, the employee had a valid work visa on commencement of employment, but there was uncertainty over the employee's right to work in the UK following the expiry of the visa. Although the employee did, in fact, have the right to work in the UK, the EAT upheld the employment tribunal finding that the employer had a genuine and reasonable belief that the employee no longer had the right to work in the UK and, accordingly, the dismissal for some other substantial reason was fair. In reaching its decision, the EAT noted that the employer had made its own enquiries of the Home Office and, despite repeated requests made over a long period of time, the employee failed to cooperate with the employer by contacting the Home Office himself for confirmation of the position.
If it is clear that the employee did not as a matter of fact have the right to work in the UK (ie an actual contravention of a statutory duty or restriction), the employer may be able to rely on a breach of a statutory duty or restriction as a reason to dismiss (see Contravention of a statutory duty or restriction).
The dismissal of an employee by reason of compulsory retirement where an employer-justified retirement age exists will be considered as a some other substantial reason dismissal.
Dismissal in the above circumstances or indeed others that may constitute "some other substantial reason" will be fair only if a fair procedure is followed and the dismissal comes within the band of reasonable management responses. In Royal Surrey County NHS Foundation Trust v Drzymala EAT/0063/17, the EAT confirmed that the Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations 2002 "sit alongside the unfair dismissal regime" and compliance with them does not mean that a dismissal by non-renewal of a fixed-term contract will be fair under s.98(4). The fairness of a dismissal depends on the facts of the case and the application of the fairness test in s.98(4).
Whether or not the Acas code of practice on disciplinary and grievance procedures applies to dismissals for some other substantial reason was considered by the EAT in Jefferson (Commercial) LLP v Westgate EAT/0128/12. The employment tribunal had suggested that the code should have been followed in relation to what was held to be a dismissal for some other substantial reason, namely, a mutual loss of confidence between the employee and his employer. The EAT agreed that the code is capable of extending beyond disciplinary and grievance situations on the basis that the former are defined to "include misconduct and/or poor performance". However, while the EAT stated that the: "word 'include' might suggest that misconduct and poor performance is not a conclusive list", it went on to state that the code "has nothing to say of relevance to the present circumstances". The EAT in Jefferson did not make any findings of a more general nature on the application of the code to dismissals for some other substantial reason. In Lund v St Edmund's School, Canterbury EAT/0514/12, which also concerned the dismissal of an employee for some other substantial reason, the EAT held that the tribunal had been wrong to conclude that Mr Lund's claim for unfair dismissal did not concern a matter to which the Acas code of practice on disciplinary and grievance procedures related. The EAT observed that the code "is intended to apply to those occasions when an employee faces a complaint which may lead to disciplinary action". It stated while the disciplinary procedure may not result in the employee being dismissed, or may result in him or her being dismissed for a reason other than misconduct or poor performance, "it is not the ultimate outcome of the process which determines whether the code applies. It is the initiation of the process which matters. The code applies where disciplinary proceedings are, or ought to be, invoked against an employee." The EAT noted that by finding that Mr Lund had been dismissed for some other substantial reason, the tribunal was stating that the reason for his dismissal was non-disciplinary in nature but went on to state that: "That did not mean that the code had not applied to the process which had resulted in that outcome".
However, in Phoenix House Ltd v Stockman and another EAT/0264/15, which concerned a dismissal for some other substantial reason following a deterioration in the workplace relationship, the EAT stated that the code "does not in terms apply to dismissals for some other substantial reason". The EAT acknowledged that elements of the Acas code may apply in general terms and that indeed this is required under ordinary common-sense fairness. However, the EAT stated that the Acas code does not specifically apply to cases involving a breakdown in working relationships, where misconduct is not alleged and capacity is not in issue. Instead what is required in these cases, in the EAT's view, is that the employer should fairly consider whether or not the relationship has deteriorated to such an extent that the employee cannot be reincorporated into the workforce without unacceptable disruption. Nonetheless, the EAT in Phoenix House Ltd was not of the opinion that the decision in Lund v St Edmund's School, Canterbury EAT/0514/12 was incorrect. It commented that it was unsurprising that the EAT in Lund concluded that the code applied given that the employer had initiated disciplinary proceedings that ultimately led to the dismissal for some other substantial reason.
In Masini v Compass Group UK & Ireland Ltd ET/2701121/2014, the employment tribunal examined the law on third-party pressure to dismiss. The tribunal held that, where a third party refuses to have an employee back on its site, the employer would be expected to:
- explore the third party's view;
- if appropriate, challenge the third party's view to establish whether or not dismissal can be avoided;
- consider redeployment to another post;
- consider the nature and extent of the injustice to the employee arising from the third party's decision; and
- follow a fair procedure.
Additional resources on some other substantial reason
- Is it possible to change the terms of a contract by dismissing the employee then re-engaging them under different terms?
- What procedure should an employer follow if it wants to retire an employee?
- Can an employee be dismissed for being a member of an extreme political party, for example the BNP?
Policies and documents
- Letter to an employee confirming their dismissal for some other substantial reason
- Letter responding to a customer or client who has made a complaint about an employee
- Contract clause on third-party pressure to dismiss
"How to" guidance
Employers that compulsorily retire employees, or attempt to pressurise them to retire, are at risk of direct age discrimination and unfair dismissal claims. Therefore, employers should treat older employees with care and ensure that managers avoid making stereotypical assumptions about the abilities or performance of older employees or their future intentions to "wind down".
However, employers may, in limited cases, apply an "employer-justified retirement age" (EJRA). Section 13(2) of the Equality Act 2010 provides that, in relation to the protected characteristic of age, less favourable treatment will not amount to age discrimination if the perpetrator can show that the treatment is a proportionate means of achieving a legitimate aim. This means that employers potentially can compulsorily retire employees if the retirement is objectively justified. Further, the dismissal may be potentially fair provided that a fair dismissal procedure that satisfies the requirements of the Employment Rights Act 1996 is followed. Where there is an EJRA,a retirement dismissal will be dealt with as a dismissal for "some other substantial reason" (s.98(1)(b) of the Employment Rights Act 1996). See Retirement for further information.
Additional resources on retirement
Line manager briefings
Automatic unfair dismissal
A dismissal will be regarded as automatically unfair where the principal reason for it is:
- one of the reasons related to jury service set out in s.98B of the Employment Rights Act 1996;
- one of the family-related reasons set out in s.99 of the Employment Rights Act 1996;
- one of the health and safety reasons set out in s.100 of the Employment Rights Act 1996;
- one of the Sunday working reasons set out in s.101 of the Employment Rights Act 1996;
- one of the working time reasons set out in s.101A of the Employment Rights Act 1996;
- the occupational pension scheme trustee reason set out in s.102 of the Employment Rights Act 1996;
- one of the employee representative reasons set out in s.103 of the Employment Rights Act 1996;
- the public interest disclosure reason set out in s.103A of the Employment Rights Act 1996 - although this does not encompass acts directed to establishing or confirming the reasonableness of the employee's belief in the information (Bolton School v Evans  IRLR 140 CA);
- one of the assertion of a statutory right reasons set out in s.104 of the Employment Rights Act 1996;
- one of the national minimum wage reasons set out in s.104A of the Employment Rights Act 1996;
- one of the tax credit reasons set out in s.104B of the Employment Rights Act 1996;
- one of the flexible working reasons set out in s.104C of the Employment Rights Act 1996;
- one of the reasons connected with requests in relation to study or training set out in s.104E of the Employment Rights Act 1996;
- one of the reasons relating to blacklisting on the grounds of trade union membership or activities set out in s.104F of the Employment Rights Act 1996;
- one of the reasons relating to recognition or derecognition of a trade union set out in s.70 and paras.161 and 162 to sch.A1 of the Trade Union and Labour Relations (Consolidation) Act 1992;
- one of the reasons relating to trade union membership or activities set out in s.152 of the Trade Union and Labour Relations (Consolidation) Act 1992;
- the industrial action reason set out in s.238A of the Trade Union and Labour Relations (Consolidation) Act 1992;
- one of the reasons relating to the statutory right to be accompanied at a disciplinary or grievance hearing set out in s.12 of the Employment Relations Act 1999;
- the transfer of an undertaking within the meaning of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (SI 2006/246), where there is no economic, technical or organisational reason entailing changes in the workforce;
- one of the reasons specified in the Transnational Information and Consultation of Employees Regulations 1999 (SI 1999/3323);
- the assertion of a right as a part-time worker as set out in the Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000 (SI 2000/1551);
- the assertion of a right as a fixed-term employee as set out in the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002 (SI 2002/2034);
- one of the reasons set out in the European Public Limited-Liability Company Regulations 2004 (SI 2004/2326);
- one of the reasons set out in the Information and Consultation of Employees Regulations 2004 (SI 2004/3426);
- one of the reasons set out in reg.17(3) of the Agency Workers Regulations 2010 (SI 2010/93);
- refusing to accept an offer to become an employee-shareholder as set out in s.104G of the Employment Rights Act 1996; or
- a breach of a provision or purported provision of a zero hours contract to which s.27A(3) of the Employment Rights Act 1996 applies (ie an exclusivity term) (reg.2(1) and (3) of the Exclusivity Terms in Zero Hours Contracts (Redress) Regulations 2015 (SI 2015/2021)).
In Ajayi and another v Aitch Care Homes (London) Ltd EAT/0464/11, Mrs Ajayi and Mr Ogeleyinbo, who were employed as waking night support workers and required to be alert at all times, were found asleep while on duty. Both employees claimed that they had been automatically unfairly dismissed under s.101A of the Employment Rights Act 1996. They said that they were exercising their right to a rest break at the time, and refusing to accept the company's failure to provide for any break. The Employment Appeal Tribunal (EAT) found that the dismissals were not by reason of any refusal and further that there had been no refusal or proposed refusal under s.101A of the Employment Rights Act 1996. For there to be a refusal, the employee must communicate this in advance to the employer.
Additional resources on automatic unfair dismissal
Where a finding of unfair dismissal has been made by an employment tribunal, it may make an order for reinstatement or re-engagement or an order for compensation. In the vast majority of cases a successful claimant is awarded compensation (see Compensation for further information).
An order for reinstatement is defined as "an order that the employer shall treat the complainant in all respects as if he had not been dismissed" (s.114 of the Employment Rights Act 1996). No such order should be made by the tribunal without it considering first:
- whether or not the complainant wishes to be reinstated;
- whether or not it is practicable for the employer to comply with an order for reinstatement; and
- in cases of contributory conduct, whether or not it would be just and equitable to order reinstatement (s.116(1) of the Employment Rights Act 1996).
In Central & North West London NHS Foundation Trust v Abimbola EAT/0542/08, the Employment Appeal Tribunal (EAT) held that the tribunal erred in its approach to deciding whether or not to order the reinstatement of an employee when it failed to take each of the above three factors into account. The EAT stated that in the context of reinstatement, "practicable" means more than possible.
The tribunal will consider the effect that an order for reinstatement would have on a respondent's business. It will not make such an order where it would lead to a redundancy situation or over-manning or industrial unrest (Port of London Authority v Payne and others  IRLR 9 CA). In King v Royal Bank of Canada Europe Ltd  IRLR 280 EAT, the EAT held that the tribunal, which did not consider reinstatement because "the claimant's post was redundant" or re-engagement "as there was no suitable alternative post for the claimant, as [it] found on the evidence", failed to comply with s.112 of the Employment Rights Act 1996. Section 112(2)(a) requires a tribunal to explain to the claimant that orders for reinstatement and re-engagement may be made under s.113, and the circumstances in which they may be made. Section 112(2)(b) requires the tribunal to ask whether or not the claimant wants such an order. In King, the EAT stated that in the context of the importance that the claimant had attached to re-employment, "the tribunal's failure to deal with this issue [was] a striking omission". The EAT also held that the tribunal wrongly restricted its consideration of alternative employment to the time of the claimant's dismissal; it failed to deal with the issue at the hearing, "which would be the relevant time for considering the question of re-engagement".
If a reinstatement order is made the complainant will be entitled to the arrears of pay and benefits that he or she would have received but for the dismissal, together with any rights and privileges, including seniority and pension rights (s.114(2) of the Employment Rights Act 1996). He or she must be restored to his or her original job and receive back pay and benefits from the date of dismissal. In McBride v Scottish Police Authority  IRLR 633 SC, in which the employment tribunal order reinstating the employee to her pre-dismissal restricted duties had been revoked on appeal to the EAT and the Court of Appeal, the Supreme Court stated that the employment tribunal has no power to order reinstatement on altered terms of employment. However, restoring the tribunal reinstatement order, the Supreme Court held that, on the facts, recognising a practical limitation on the scope of the employee's work caused by circumstances beyond the control of the employer and employee did not mean that the tribunal had sought to alter the contractual terms.
Where there is a breakdown in trust and confidence, which in practice there usually is by the time of the tribunal hearing if not by the time of the actual dismissal, the remedy of reinstatement or indeed re-engagement has very limited scope.
If a tribunal decides not to order reinstatement it must go on to consider re-engagement, which is defined as "an order that the complainant be engaged by the employer or by a successor of the employer or by an associated employer in employment comparable to that from which he was dismissed or other suitable employment" (s.115 of the Employment Rights Act 1996). In deciding whether or not to re-engage the tribunal will take into consideration the same factors as for reinstatement above.
The tribunal must specify the terms on which re-engagement will take place and in particular specify:
- the identity of the employer;
- the nature of the employment;
- the remuneration for the employment;
- benefits payable and arrears of pay;
- any rights and privileges including seniority and pension rights to be restored; and
- the date by which the order must be complied with.
For the purposes of deciding whether or not it is practicable to make an order for reinstatement/re-engagement the tribunal should not take account of the fact that the employer has engaged a replacement unless the employer can show either that it was not practicable for it to arrange for the dismissed employee's work to be done without engaging a replacement or that it engaged the replacement after a lapse of a reasonable period of time without having heard from the employee that he or she wished to be reinstated or re-engaged (s.116(6) of the Employment Rights Act 1996). In Rembiszewski v Atkins Ltd EAT/0402/11, the EAT stated that whether or not an order for reinstatement or re-engagement should be made, should be judged as of the date that the reinstatement or re-engagement would take effect. The tribunal should not take into account whether or not an order for reinstatement or re-engagement would result in the employee receiving a "windfall" from the way in which the amount payable on reinstatement/re-engagement is calculated - the key question is whether or not it is practicable for the employer to comply with the order (Home Office v Khan and another EAT/0257/07, in which the employer argued that a failure to mitigate loss by seeking other employment should have been taken into account in deciding if an order for re-engagement should be made).
In calculating the amount of arrears of pay and benefits payable the tribunal will take into account, so as to reduce an employer's liability, wages paid in lieu of notice, ex gratia payments paid by the employer or remuneration paid in respect of employment with another employer.
If an employer refuses to reinstate or re-engage the tribunal will award additional compensation over and above the basic compensatory awards unless the employer can satisfy the tribunal that it was not practicable to comply with the order (ss.117(3) and (4) of the Employment Rights Act 1996). The test is one of practicability and not possibility so although a tribunal will scrutinise reasons advanced by an employer it ought to give due weight to the employer's commercial judgment unless the evidence is disbelieved. In these circumstances the complainant will be entitled to an "additional award" of between 26 and 52 weeks' pay in addition to the basic and compensatory awards (see below). In Awotona v South Tyneside Healthcare NHS Trust  All ER (D) 221 (Feb) CA, the Court of Appeal held that a tribunal is entitled to reassess any award made to the claimant at the original hearing, in respect of losses from the date of dismissal to the date of re-engagement or reinstatement, if the employer subsequently fails to re-engage or reinstate the employee.
In practice employees rarely ask for reinstatement or re-engagement, and even if they do, tribunals rarely make such orders.
Additional resources on remedies
An award for compensation must consist of a basic award and a compensatory award (s.118(1) of the Employment Rights Act 1996). In the vast majority of cases these are the only categories of award that are considered. The additional award is made only in certain circumstances - such as where there has been non-compliance with an order for reinstatement or re-engagement and in similar circumstances for union-related dismissals, health and safety related dismissals and employee representative dismissals.
The amount of the basic award will, in most cases, be the same as that of a statutory redundancy payment. The maximum amount of a week's pay for the purposes of calculation is adjusted annually. It stands at £525 for dismissals where the effective date of termination is on or after 6 April 2019 (£508 where the effective date of termination is prior to that date). The maximum number of years to be taken into account is 20.
A week's pay is based on gross pay and the award is calculated by reference to the period ending with the effective date of termination during which the employee was continuously employed and allowing:
- one and a half weeks' pay for each year of employment in which the employee was not below the age of 41;
- one week's pay for each year of employment not falling within the above in which the employee was not below the age of 22; and
- half a week's pay for each year of employment not falling within either of the above.
The amount of the basic award is now linked to the retail prices index (RPI) so it will be increased annually by the same percentage as the amount of increase in the RPI. The annual adjustment takes effect from 6 April (s.22 of the Enterprise and Regulatory Reform Act 2013).
Under s.122 of the Employment Rights Act 1996, the basic award may be reduced in certain circumstances, in particular:
- where the employee has unreasonably refused an offer of reinstatement;
- where the employee's conduct before dismissal makes a reduction just and equitable; and
- where the employee has been dismissed for redundancy and received a redundancy payment.
Where a dismissal is unfair, in a number of specified instances the amount of the basic award will be not less than £6,408 where the effective date of termination is on or after 6 April 2019 (£6,203 where the effective date of termination is prior to that date). This applies when a dismissal is unfair because the employee has been dismissed:
- on grounds of trade union membership or activities;
- for carrying out legitimate health and safety activities as a safety representative;
- for carrying out functions as an occupational pension scheme trustee; or
- for carrying out functions as an elected employee representative.
The amount of the basic award payable depends on the employee's age and length of service and the amount of a week's pay. The maximum basic award is £15,750.
Where a dismissal is unfair because the employee has been dismissed in relation to blacklisting on grounds of trade union membership or activities, the amount of the basic award will not be less than £5,000.
The maximum amount that a claimant may receive in respect of a compensatory award is the lower of the statutory maximum, which is £86,444 in relation to dismissals where the effective date of termination is on or after 6 April 2019 (or £83,682 where the effective date of termination occurred prior to 6 April 2019), and the sum of 52 weeks' pay of the claimant concerned.
Sections 220 to 229 of the Employment Rights Act 1996 define a "week's pay". The Employment Appeal Tribunal (EAT) in University of Sunderland v Drossou EAT 0341/16 considered s.221(2), which relates to employees with normal working hours and refers to the amount "payable by the employer under the contract of employment". The EAT highlighted that s.221(2) does not specify to whom sums are payable. This is in contrast with s.27, which concerns the meaning of "wages" for the purpose of unlawful deductions and refers to "sums payable to the worker". The EAT confirmed the employment tribunal decision to include payments made to a pension scheme and not directly to the employee, in the calculation of a week's pay.
The amount of compensation is such amount as a tribunal considers just and equitable in all the circumstances, having regard to the loss sustained by the claimant in consequence of the dismissal insofar as that loss is attributable to action taken by the employer (s.123(1) of the Employment Rights Act 1996).
The statutory maximum for the compensatory award has been removed altogether in cases in which a person is regarded as automatically unfairly dismissed for reasons set out in s.100 (health and safety cases), s.103(A) (public interest disclosure cases), s.105(3) (selection for redundancy on grounds of health and safety activity) or s.105(6)(a) (selection for redundancy on the grounds of public interest disclosure) of the Employment Rights Act 1996.
The most common heads of compensation are those set out below:
- The loss of wages from the date of termination until the date of hearing.
- Future loss of earnings - this will be based on the claimant's net loss of earnings for such a period as the tribunal considers reasonable bearing in mind such matters as the length of time it believes that the claimant will remain unemployed. The award should take into account any increase in salary or other benefit the claimant would have received but for dismissal. In Scope v Thornett  IRLR 155 CA, the Court of Appeal emphasised that the assessment of future loss of earnings inevitably involves an element of speculation. On that basis, it held that the EAT had erred in overturning a tribunal's decision that the claimant's employment would have come to an end within six months even if she had not been dismissed.
- Benefits in kind (for example medical insurance, company car and other fringe benefits).
- Pension rights - if the claimant was a member of a workplace pension scheme he or she will almost certainly suffer financial loss because any deferred pension payable will be based on salary at the date of dismissal instead of the pension scheme's normal retirement age. The calculation of this loss is complicated. Some guidance is provided by a booklet prepared by a working group of employment tribunal judges: Principles for compensating pension loss. In Port of Tilbury (London) Ltd v Birch and others  IRLR 92 EAT, it was held that an employment tribunal's first duty is to consider the evidence and submissions put forward by the parties and that there is no duty on the tribunal to follow the guidelines set out in the booklet. (Port of Tilbury was decided when a previous edition of the guide was in use.)
- Loss of statutory rights - a nominal figure in recognition of the fact that the complainant has lost protection from unfair dismissal for two years (approximately £200-250).
It has also been clarified that a claimant may not recover compensation for injury to feelings as a result of the manner of the dismissal. The possibility of such a claim was raised, obiter, by the House of Lords in Johnson v Unisys Ltd  IRLR 279 HL, and in February 2004 the Court of Appeal in Dunnachie v Kingston Upon Hull City Council  IRLR 287 CA held by a majority that compensation for non-economic loss caused by the manner of dismissal was, in principle, recoverable as part of the compensatory award. However, this decision has now been overturned by the House of Lords, which held in Dunnachie v Kingston-upon-Hull City Council  IRLR 727 HL that s.123 of the Employment Rights Act 1996 permits only financial loss to be compensated.
This should be distinguished from injury to feelings awards that relate to the employer's actions before dismissal. In Melia v Magna Kansei Ltd  IRLR 117 CA, the employee successfully claimed that he had suffered detriment as a result of having made a protected disclosure, and subsequently been constructively unfairly dismissed. The Court of Appeal held that the injury to feelings award for the detriment that he had suffered should be assessed up to the date of the dismissal. It also recognised that certain elements of the compensatory award may have been due to the employee earlier than the date when the award was made. It therefore held that it is open to a tribunal to uplift such elements by a certain percentage to reflect the fact that the employee has suffered a loss as a result of the delay in receiving those payments.
Even after a finding of unfair dismissal under s.123 of the Employment Rights Act 1996, there are a number of circumstances where the level of compensation that would otherwise have been awarded is reduced or even eliminated by the tribunal. These circumstances are where:
- the tribunal finds that the conduct of the employee contributed to the dismissal;
- the employee failed to mitigate his or her loss; or
- the tribunal considers it just and equitable to limit the award for some other reason.
Where a claimant is considered to have caused or contributed to his or her own dismissal the tribunal is likely to reduce both the compensatory and basic award by such proportion as it considers just and equitable. For example, if the procedures used to dismiss were unfair but the claimant's conduct to a certain extent contributed to his or her misfortune, such a reduction would usually be made.
It used to be the case that if an employer that had failed to follow a proper procedure could show that, had it done so, the employee would have been dismissed in any event, it could escape a finding of unfair dismissal. In Polkey v AE Dayton Services Ltd (formerly Edmund Walker (Holdings) Ltd)  IRLR 503 HL this was held to be wrong, although s.34(2) of the Employment Act 2002 restored the pre-Polkey position with effect from 1 October 2004 in relation to procedural errors unrelated to the statutory minimum dismissal and disciplinary procedures. In April 2009, the Employment Act 2008 returned the law on procedural fairness in unfair dismissal to that in existence prior to October 2004. This means that procedural failings will normally render a dismissal unfair, but compensation can be reduced in proportion to the likelihood that the dismissal would have occurred had a fair procedure been followed. For example, if an employee is made redundant and unfairly dismissed his or her compensatory award should not run beyond the date that the company shut down (James W Cook & Co (Wivenhoe) Ltd (in liquidation) v Tipper and others  IRLR 386 CA).
Accordingly, tribunals do assess the chances that a fair dismissal would have occurred at some stage in any event and apply a percentage deduction from the total loss. If the tribunal is unable to conclude what would have happened had appropriate procedures been followed, the appropriate course is to assess compensation by evaluating the chance that the employee would still have lost his or her employment (Constantine v McGregor Cory Ltd  ICR 938 EAT).
In Steel Stockholders (Birmingham) Ltd v Kirkwood  IRLR 515 EAT, the EAT held that it is only where the defect was procedural rather than substantive that such a percentage reduction may be made.
In Grayson v Paycare EAT/0248/15, the EAT allowed an appeal against the employment tribunal decision to make a 100% Polkey reduction following a finding of unfair dismissal in a redundancy situation. The EAT stressed that a Polkey reduction requires the tribunal to evaluate the chance that the employee would continue in employment had the employer followed a fair procedure. This is a separate question to the date until which the employment would have continued had the dismissal not taken place.
In Gover and others v Propertycare Ltd EAT/0458/05, the EAT held that it is incumbent on employment tribunals to consider in each case whether or not a Polkey reduction should be made to compensation for unfair dismissal. The Court of Appeal agreed with this judgment and has stated that this forms part of a tribunal's overriding obligation to award such compensation as is just and equitable (Gover and others v Propertycare Ltd  EWCA Civ 286 CA).
In Software 2000 Ltd v Andrews and others  IRLR 568 EAT, the EAT held that, where a tribunal regards evidence as being too unreliable to determine if a dismissal would, on the balance of probabilities, have occurred in any event for the purposes of s.98(2) of the Employment Rights Act 1996 (which has now been repealed), that evidence should still be taken into account when deciding whether to apply a Polkey reduction to the compensatory award.
The employee is under a duty to mitigate his or her loss. The employee must make attempts to seek alternative employment and be realistic in his or her job expectations. If the employee has not made reasonable efforts to find other work, compensation will be reduced to reflect the tribunal's view of what would have happened if he or she had done so. The burden of proving a failure to mitigate is on the employer. In Cooper Contracting Ltd v Lindsey EAT/0184/15, the EAT held that the employer must show that the employee acted unreasonably in failing to mitigate, rather than requiring him or her to take all reasonable steps to lessen the loss.
In Hardy v Polk (Leeds) Ltd  IRLR 420 EAT, the EAT held that an employee who is dismissed without notice or pay in lieu of notice is under a duty to mitigate his or her loss in respect of the notice period, and that earnings received from another employer during the (nominal) notice period must be offset against the compensatory award. In Voith Turbo Ltd v Stowe  IRLR 228 EAT, another division of the EAT declined to follow Hardy, holding that an unfairly dismissed employee was under no duty to give credit for earnings achieved in new employment during a period in respect of which the former employer had made a payment in lieu of notice. However, the President of the EAT in Morgans v Alpha Plus Security Ltd  IRLR 234 EAT affirmed the approach in Hardy. The issue has now been addressed by the Court of Appeal. In Burlo v Langley and another  IRLR 145 CA, the Court held that, in assessing unfair dismissal compensation, tribunals should not make any deduction to reflect earnings from another employer during the notice period. This principle is limited to cases of direct dismissal and does not apply to cases of constructive dismissal (Stuart Peters Ltd v Bell  IRLR 941 CA). In Burlo, the Court went on to reject the wider proposition that it was appropriate to take into account other aspects of good industrial practice when assessing the compensatory award. Accordingly, even if it were correct to say that good industrial relations practice required an employee who was summarily dismissed while on sick leave to receive pay in lieu of notice at the normal rate of pay as opposed to the rate of statutory sick pay, that precept could not be taken into account in the assessment of compensation.
Payments made either under a contractual liability by the employer or ex gratia will generally be taken into account to reduce the compensatory award. Accordingly credit must be given by a claimant for pay in lieu of notice.
The Court of Appeal in Digital Equipment Co Ltd v Clements (No.2)  IRLR 134 CA stated that the order of deductions in respect of the compensatory award should be:
- calculate the total loss actually suffered;
- deduct amounts received in mitigation and any payment made by the former employer;
- make any Polkey deduction;
- make any reduction for contributory fault; and
- apply the statutory maximum.
Where a claimant has received statutory benefits the respondent will be ordered to pay part of the compensation awarded not to the claimant but to the authority that paid the benefit so that it recovers the money paid (Employment Protection (Recoupment of Job Seekers Allowance and Income Support) Regulations 1996 (SI 1996/2349)). This does not apply where a sum is paid by way of settlement of a dispute before or after a finding of unfair dismissal.
In Sheffield Forgemasters International Ltd v Fox; Telindus Ltd v Brading  IRLR 192 EAT, the EAT held that (subject to the rule against double recovery) receipt of incapacity benefit by a claimant did not of itself preclude an award of compensation for loss of earnings during the same period. The mere fact that someone is deemed "incapable of work" for the purposes of incapacity benefit does not mean that he or she is in fact unable to work.
Complaints of unfair dismissal may be dealt with under the Acas arbitration scheme introduced in May 2001 (see Employment tribunals and dispute resolution > Alternative methods of dispute resolution > Acas arbitration scheme).
Additional resources on compensation
- Are figures available on the amount of compensation awarded in unfair dismissal cases?
- Can compensation for unfair dismissal include an element for injury to feelings?
Trade Union and Labour Relations (Consolidation) Act 1992
Employment Rights Act 1996
Employment Relations Act 1999
Employment Act 2008
Equality Act 2010
Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002 (SI 2002/2034)
Employment Equality (Age) Regulations 2006 (SI 2006/1031)
Employment Relations Act 1999 (Blacklists) Regulations 2010 (SI 2010/493)
Employee Study and Training (Procedural Requirements) Regulations 2010 (SI 2010/155)
Employment Equality (Repeal of Retirement Age Provisions) Regulations 2011 (SI 2011/1069)