What are dismissals?
A dismissal occurs when an employer ends an employee’s contract of employment. In the UK, dismissals must not only be for a fair and legally recognised reason but also handled through a reasonable and consistent process. Failing to do so can expose your business to claims of unfair, wrongful, or constructive dismissal.
Under the Employment Rights Act 1996, there are five potentially fair reasons for dismissal, namely…
- Conduct
- Where an employee has behaved inappropriately, breached policies, or committed misconduct/gross misconduct.
- Capability or performance
- Where the employee does not have the necessary skills, qualifications, or health to perform their role.
- Redundancy
- Where the role is no longer required due to restructuring, downsizing, or closure.
- Statutory restriction
- Where continuing employment would breach the law, for example, a driver losing their licence.
- Some other substantial reason (SOSR)
- Such as a business reorganisation, a breakdown in trust, or the non-renewal of a fixed-term contract.
Even with a fair reason, employers must follow a fair procedure.
This usually includes…
- Informing the employee of the issues and giving them the opportunity to respond.
- Conducting proper investigations where appropriate.
- Holding formal meetings and allowing the employee to be accompanied.
- Considering alternatives to dismissal, such as warnings, redeployment, or training.
- Offering a right of appeal.
If these steps are not followed, the dismissal could be deemed unfair, even if the reason itself was valid.
In addition, even if an employer has acted reasonably, some reasons for dismissal are classed automatically unfair.
What are the different types of dismissal?
Employers often use the word “dismissal” generally, but there are different types, each with its own risks…
- Fair dismissal
- Where the reason and process are lawful and reasonable. For example, dismissal for proven gross misconduct after a thorough investigation.
- Unfair dismissal
- Where the employer does not have a fair reason, or fails to follow a reasonable procedure. Employees with over two years’ service usually have the right to claim unfair dismissal. However, there is no such two year qualifying period for automatically unfair reasons.
- Wrongful dismissal
- This is a contractual claim, not based on fairness, but on whether proper notice was given, or payment in lieu of notice. It can arise even if the dismissal itself was otherwise fair.
- Constructive dismissal
- Where an employee resigns because they believe the employer has fundamentally breached their contract, such as ignoring grievances, drastically changing terms and conditions, or failing to prevent bullying or harassment.
Understanding the differences is key. An employer might assume they’ve dismissed fairly, but if procedure is mishandled, it could still give rise to an unfair dismissal claim.
Why do dismissals matter to your business?
The way you handle dismissals can have serious consequences for your organisation.
Poorly managed dismissals can lead to…
- Legal claims
- An employee with two years’ service can bring a claim for unfair dismissal, while discrimination or whistleblowing claims can be made regardless of length of service. Tribunal awards can be significant, especially in discrimination cases where compensation is uncapped.
- Financial costs
- Beyond compensation, dismissals can incur legal fees, HR time, and disruption to business operations.
- Reputational damage
- Employment tribunal decisions are published online and can be picked up by the press or prospective employees. Mishandled dismissals can make it harder to attract and retain talent.
- Low morale
- If remaining staff see a colleague dismissed without due process, it can undermine trust and confidence in leadership.
- Compliance risks
- Not following the Acas code of practice can result in an uplift of up to 25% in any compensation awarded at tribunal.
Handled fairly and transparently, dismissals can demonstrate professionalism and protect your organisation. Mishandled, they can expose your business to unnecessary cost, risk, and reputational harm.
How can we help you with dismissals?
We provide expert, practical support to help you manage dismissals fairly, consistently, and in compliance with UK employment law.
Our services include…
- Pre-dismissal advice
- Helping you decide whether dismissal is the right course of action, or whether alternatives such as performance improvement, mediation, or redeployment may be more appropriate.
- Step-by-step procedural support
- Guiding you through investigations, hearings, and appeals, ensuring you meet your legal obligations at every stage.
- Document drafting and review
- Preparing letters, invitations to meetings, outcome letters, redundancy consultation paperwork, and appeal responses.
- Independent investigations
- Providing impartial fact-finding services where allegations of misconduct, poor performance, or workplace conflict arise.
- Support for redundancy processes
- Including business case preparation, consultation planning, and selection criteria.
- Risk management
- Assessing the likelihood of claims, advising on potential settlement agreements, and helping you make commercially sound decisions.
- Training for managers
- Equipping your leadership team with the skills to handle dismissals fairly and consistently, reducing the risk of future claims.
Our goal is to protect your business by ensuring dismissals are carried out legally, fairly, and with minimal disruption, giving you confidence that you’re acting in the best interests of both your business and your employees.
Which other HR topics are related to dismissals?
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