Geoffrey Caesar, Solicitor

Terminating an employment relationship can be complex and sensitive for employers and employees. In the UK, there are various legal aspects that employers need to consider before dismissing an employee, such as the reason for dismissal, the notice period, the procedure and the potential claims that the employee may bring.

In this blog post, I will explore some options and procedures for an employer to terminate an employment relationship in the UK.

Reasons for dismissal

The Employment Rights Act 1996, provides that an employer can dismiss an employee only for a potentially ‘fair reason’, that is:

• Capability: This relates to the employee’s skills, qualifications, health or performance. For example, an employer may dismiss an employee who cannot meet the required work standards or is frequently absent due to illness.
• Conduct: This relates to the employee’s behaviour or attitude at work. For example, an employer may dismiss an employee who has committed misconduct, such as theft, violence or breach of confidentiality.
• Redundancy relates to the employer’s need to reduce its workforce due to a business reason, such as closure, relocation or reorganisation. For example, an employer may dismiss an employee who is no longer needed for their role or cannot be redeployed to another suitable position.
• Statutory restriction relates to the legal or regulatory requirements preventing employees from continuing their work. For example, an employer may dismiss an employee who has lost their driving licence if driving is essential for their job.
• Some other substantial reason: This is a catch-all category that covers any other fair and reasonable grounds for dismissal that do not fall under the previous categories. For example, an employer may dismiss an employee who has a breakdown of trust and confidence in their manager or has refused to accept a change in their terms and conditions of employment.

Notice period

The notice period is the length of time that the employer or the employee must give before terminating the employment contract. The notice period can be stated in the employment contract or implied by custom and practice. However, a statutory minimum notice period applies regardless of what the contract says unless there is a valid reason for immediate dismissal (such as gross misconduct).

The statutory minimum notice period depends on how long the employee has worked for the employer:

• One week – for employees working at the company between one month and two years.
• One week for each year of service – for employees having worked at the company for more than two years, up to a maximum of 12 weeks.

Procedure

The dismissal procedure for dismissing an employee varies depending on the reason and circumstances. However, in general, employers should follow a fair and consistent process that includes:

• Inform the employee of the reason for dismissal and allow them to respond.
• Hold a meeting with the employee to discuss the issue and allow them to be accompanied by a colleague or a trade union representative.
• Provide the employee written confirmation of the decision and explain their right to appeal.
• Conducting an appeal hearing if the employee requests and informing them of the outcome in writing.

Employers should also comply with specific procedures that apply to certain types of dismissal, such as redundancy or disciplinary action. Employers should also follow any relevant codes of practice or guidance issued by organisations such as Acas (the Advisory, Conciliation and Arbitration Service) or HMRC (Her Majesty’s Revenue and Customs).

Potential claims

If an employee believes they have been dismissed unfairly or unlawfully by their employer, they may bring a claim against their employer in an employment tribunal. Some of the common types of claims that employees may make are:

• Unfair dismissal is when an employer dismisses an employee without a fair reason or following a proper procedure. To claim unfair dismissal, an employee must have at least two years of continuous service with their employer (unless they are dismissed for specific automatically unfair reasons, such as whistleblowing or pregnancy).
• Wrongful dismissal is when an employer dismisses an employee in breach of their employment contract, such as by not giving them the correct notice period or pay. To claim wrongful dismissal, an employee does not need any minimum length of service with their employer.
• Constructive dismissal: This is when an employer acts in such a way that breaches the trust and confidence between them and their employee, forcing them to resign, for example, by changing their role significantly without consent or subjecting them to harassment or discrimination. To claim constructive dismissal, an employee must have at least two years of continuous service with their employer and resign promptly after the breach.
• Discrimination: This is when an employer dismisses an employee or treats them less favourably because of a protected characteristic, such as age, sex, race, disability, religion or sexual orientation. To claim discrimination, an employee does not need any minimum length of service with their employer and can also claim for other types of discrimination during their employment.

Conclusion

Terminating an employment relationship is a complex and delicate matter requiring employers’ careful consideration and planning. Employers should ensure they have a valid reason for dismissal, give the appropriate notice period, follow a fair and lawful procedure, and avoid any potential claims from their employees. Employers should also seek professional advice if they need clarification on any aspect of the termination process or face any disputes or challenges from their employees.