Unfair dismissal is one of the longest-established areas of employment law, familiar to employers and employees alike. In interpreting and developing unfair dismissal law over the years, employment tribunals have highlighted the importance of companies following fair procedures before deciding to dismiss an employee. In particular, employers must observe the minimum statutory discipline and dismissal procedure laid down by the Employment Act 2002. This section of the Guide explains the rules on unfair dismissal. Most unfair dismissal law is in the Employment Rights Act 1996, but unfair dismissals on trade union grounds are dealt with in the Trade Union and Labour Relations (Consolidation) Act 1992.
This section begins by setting out who is eligible to claim unfair dismissal ( Eligibility to claim unfair dismissal ) and then goes on to look at the legal principles that govern whether a particular dismissal was fair or unfair. It is up to the employee to prove that he or she was dismissed. Dismissal is defined in a particular way for the purposes of unfair dismissal law (establishing the dismissal) and includes, for example, a decision not to renew a fixed-term contract. It is then usually for the employer to prove the reason for the employee's dismissal.
Dismissals for certain reasons are automatically unfair (automatically unfair reasons for dismissal ). If the reason does not fall within one of these inadmissible categories, it must fit into one of the other categories of potentially fair reasons for dismissal recognised by the legislation. These categories are defined broadly, however, and are capable of covering all legitimate business reasons for dismissing an employee (potentially fair reasons for dismissal ).
Once the company has established that it had a potentially fair reason for dismissing, the crucial issue is whether the company acted reasonably in treating it as a sufficient reason to dismiss the employee. Employment tribunals have definite views on what is involved in handling a dismissal reasonably, and this chapter draws on the tribunals' decisions in order to give guidance on handling different types of dismissal (did the company act reasonably?).
It is also important to note that the Employment Act 2002 requires employers to follow a minimum procedure before deciding to dismiss an employee, failing which the dismissal may be automatically unfair ( minimum dismissal procedures ).
Separate sections of this Guide deal in more detail with how unfair dismissal law affects the handling of specific types of cases, such as poor attendance, sickness absence and unsatisfactory performance ( Managing performance ), discipline ( Discipline ) and redundancy (redundancy). The legal mechanics of how an employment contract is terminated and other legal issues that arise when an employment relationship ends, such as the obligation to provide employees with written reasons for dismissal, can also be found elsewhere in this Guide (terminating employment).
It is also important to keep in mind that unfair dismissal law is not the only route by which a dismissal can be challenged as unlawful.
A dismissal that is implemented in a way that breaches the terms of an employee's contract is a wrongful dismissal, for which the employee can recover compensation. (Wrongful dismissal is covered elsewhere (wrongful dismissal )). A dismissal may amount to unlawful discrimination if it is based on an individual's sex or married status or is on grounds of age, race, religion, sexual orientation or disability. It may also be discriminatory to dismiss a disabled employee if the reason for the dismissal relates to the individual's disability and the dismissal is not justified, or if the employee has been dismissed before the company has met its duty to consider reasonable adjustments ( Equal opportunities ). Further, an employer who dismisses an employee because of his or her age, or apparent age, must be able to justify this in order to avoid unlawful age discrimination.
The law on discrimination is summarised elsewhere in the Guide ( equal opportunities ). The special rules that govern lawful retirement dismissals are dealt with later in this section ( retirement ).