Employers in England and Wales must follow a fair process when dismissing an employee. Failure to do so can result in a claim for unfair dismissal, which can be costly and time consuming to defend.
Understanding what makes a dismissal unfair is essential for employers seeking to minimise risk and maintain compliance with employment law.
Legal Framework for Unfair Dismissal
Under the Employment Rights Act 1996, employees with at least two years of continuous service have the right not to be unfairly dismissed.
To be fair, a dismissal must meet two key requirements:
- There must be a fair reason for dismissal
- The employer must follow a fair procedure
Fair reasons include capability, conduct, redundancy, statutory illegality or some other substantial reason. However, even where a valid reason exists, failure to follow a fair process can still render the dismissal unfair.
Common Examples of Unfair Dismissal
A dismissal may be considered unfair where:
- The employer fails to investigate the situation properly
- The employee is not given an opportunity to respond to allegations
- No warning is provided in cases of poor performance
- The employer does not follow its own disciplinary procedures
- The decision to dismiss is unreasonable in the circumstances
Employment tribunals will assess whether the employer acted reasonably in treating the reason for dismissal as sufficient.
The Importance of a Fair Procedure
Following a fair procedure is just as important as having a valid reason. Employers are expected to follow the ACAS Code of Practice on Disciplinary and Grievance Procedures.
This typically involves:
- Conducting a thorough investigation
- Informing the employee of the allegations
- Holding a formal meeting
- Allowing the employee to be accompanied
- Providing the right to appeal
Failure to follow the ACAS Code can result in increased compensation if a claim is successful.
Risks for Employers
Unfair dismissal claims can result in compensation awards, legal costs and reputational damage. Even defending a claim can be time consuming and disruptive.
Employers should ensure that managers are properly trained and that procedures are consistently applied across the business.
Conclusion
Dismissal is a complex area of employment law in England and Wales. Employers must ensure that they have both a valid reason and a fair process in place.
Taking shortcuts or failing to follow proper procedures can lead to significant legal risk. A structured and compliant approach is essential.
Call to Action
If you are considering dismissing an employee or want to review your processes, Penerley can help. Our employment law specialists provide clear, practical advice to protect your business. Contact us today for expert support.
