Advice For You

Unfair Dismissal

If you have completed 2 years continuity of service, you have the legal right not to be unfairly dismissed under the Employment Rights Act 1996.

The dismissal of an employee with continuity of service of over 2 years (as at July 2019) will be unfair unless the employer can show that the reason or (principal reason) for the dismissal was one of the five potentially fair reasons under the Employment Rights Act (Section 98 (1) and 98 (2):-

  • Capability or qualifications
  • Conduct
  • Redundancy
  • Breach of a statutory duty or restriction
  • Some Other Substantial Reason (“SOSR”)

If the employer raises either a misconduct issue or allegations of poor performance, then the ACAS Code of Practice on disciplinary and grievance procedures (“the ACAS Code”) sets out the minimum procedure that employers should go through before dismissing an employee.  Employment Tribunals must take the ACAS Code into account when deciding whether or not an employer has acted reasonably in dismissing an employee.

Dismissals for certain reasons are categorised as being automatically unfair and in those cases, employees do not need a qualifying period of continuity of employment. These automatically unfair dismissals include for reasons connected to pregnancy or childbirth, health and safety activities, whistleblowing, exercising various time-off rights or asserting a statutory right under the Employment Rights Act.

Unfairly dismissing or selecting for redundancy

There is no qualifying period of continuity of service in most automatic unfair dismissal cases.

Only employees have the right not to be unfairly dismissed (Section 94 (1) ERA 1996).  There has been much case law of late regarding the status of employees and the difference between the truly self-employed, a worker and an employee.  However, it is only an employee who has the right not to be unfairly dismissed.

To be able to claim unfair dismissal, the employee must work in Great Britain which extends to England, Wales and Scotland or if their work has a close link to employment in Great Britain.  In order to bring a claim for unfair dismissal, an employee must have had their employment terminated by the employer, the expiry of a limited-term contract or constructive dismissal. Unilateral changes to an employee’s terms and conditions of employment can amount to a dismissal in some circumstances.

Effective date of termination

The effective date of termination is important for a number of reasons:-

1.    It is referred to when calculating the length of the employee’s continuous period of employment which affects whether or not the employee has the necessary qualifying period of continuity of service and the calculation of the basic award. It also sets the start of the 3-month time limit for issuing a Notice of Intention to claim form to ACAS Early Conciliation.

Capability or qualifications

A dismissal is potentially fair if it “relates to the capability or qualifications of the employee for performing work of the kind which he was employed by the employer to do” (Section 98 (2) (a), ERA 1996). Capability is seen as an employee’s “skill, aptitude, health or any other physical or mental quality”.

In practice, capability dismissals can be put in two separate groups, the first is a dismissal because of an employee’s lack of capability or incompetence or the second reason is because of an employee’s ill health, meaning that an employee may be perfectly capable and good at their job whilst they are working, however, if they are off work on the sick and are not physically in work, they are not capable of performing their job role. There is often a link between dismissal for ill health and disability discrimination under the Equality Act.


Conduct is a potentially fair reason to dismiss an employee, for example, it may either be a single act of serious misconduct (usually classified as gross misconduct) or a series of acts that are less serious. Examples of misconduct are often included in employment contracts and can vary from repeated poor attendance (ie. regularly off on a Friday afternoon or a Monday) through to theft or dishonesty.

The ACAS Code of Practice on disciplinary and grievance procedures recommends including examples of matters the employer would consider serious enough to be classed as gross misconduct. It is normal for such examples to detail that they are examples only and are not a complete list. This provides for misconduct which the employer considers culpable but did not have in mind when the contract was drafted.

The difference between a dismissal for misconduct and one for gross misconduct is that on misconduct, the employee will usually be paid in lieu of their notice or required to work their notice, however, in cases of gross misconduct, this is classed as summary dismissal and the employee’s employment ends immediately with no notice or payment in lieu of notice being made.

Once the employer has settled on the potentially fair reason for dismissal, and in misconduct cases, believes that the employee was “guilty” of the allegations of misconduct the employer should then decide on the sanction to impose and whether or not there is any mitigation. If the matter proceeds to a Tribunal, the Tribunal will decide if the employer acted reasonably in dismissing the employee for the reason they did. The Tribunal will consider the band of reasonable responses which means they will consider whether or not another employer faced with the same situation could have fairly come to the same reason as to dismiss and was the alleged act a sufficient reason for dismissal.

Procedural fairness

In addition to there having to be a substantively fair reason for an employer dismissing an employee, the employer must also follow a fair procedure. In relation to conduct and performance dismissals, this includes following the ACAS Code.

Polkey reductions

If an employer fails to follow a full and fair procedure, there is a defence called Polkey ,based on the Appeal Court case of that name. When employers seek to put forward the Polkey defence, they use the rationale that even if they would have followed a full and fair procedure, it would have made no difference whatsoever to their decision.


When an allegation is raised which is either regarding misconduct or poor performance, a fair procedure under the ACAS Code is to investigate the allegations, inform the employee of the allegations and/or issues in writing. If following the investigation, the investigating officer believes that there is sufficient evidence and/or issues for the matter to proceed to a disciplinary hearing, a disciplinary panel should be appointed and a disciplinary hearing arranged with the employee. The employee should then be informed of the decision in writing and given a right of appeal.

Call us today

If you have been unfairly dismissed please contact Susan within the Employment team today on 0161 785 3500.