What is unfair dismissal?
You have a right not to be unfairly dismissed under section 94 Employment Rights Act 1996 (ERA 1996). It is section 94 that gives you the right to sue for unfair dismissal in the Employment Tribunal. In order to sue for unfair dismissal, you have to have been dismissed. Section 95 ERA 1996, lays out the circumstances in which the Employment Tribunal will consider that you have been dismissed. Section 97 ERA 1996 lays out the effective date of termination which is important for calculating the time limit and whether you have the qualifying service to bring an unfair dismissal claim. Section 98 ERA 1996 sets out how the Employment Tribunal will determine whether you have been fairly or unfairly dismissed.
Once the Employment Tribunal establishes that you have a right to bring an unfair dismissal claim, it will be up to your Employer to prove that the principal reason or reasons for your dismissal was a potentially fair reason. If your Employer is able to prove that the reason for your dismissal was potentially fair, it will then consider whether in all the circumstances of the case, your dismissal was fair or unfair.
There are a number of qualifying conditions and exceptions, but mainly you have to be an employee with two years continuous employment (with exceptions). You as the claimant would have responsibility for proving that you meet the relevant qualifying conditions.
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To bring a claim for unfair dismissal, you must satisfy the following criteria;
- You must be an Employee.
- You must have been dismissed by your Employer.
- Your Employer did not act reasonably in dismissing you.
- Your Employer did not use a fair procedure in dismissing you.
- You have two years’ service, or have been automatically unfairly dismissed.
- You are within the 3-month time limit for bringing a claim in the Employment Tribunal
Are you an Employee?
Section 230 Employment Rights Act 1996 describes an Employee as an individual who has entered into or works/worked under a contract of employment. The Act describes a worker as an individual who has entered into or works under a contract of employment, or any other contract, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual. See How to determine whether you are a Worker or an Employee , How to work out if you are employed or self-employed
Only Employees can sue for unfair dismissal under the Employment Rights Act 1996. If you are not an Employee you may be able to sue for wrongful dismissal, breach of contract or discrimination.
Have you actually been dismissed?
You have to show the employment tribunal that you were actually dismissed by your employer, that your employer made the decision to dismiss you rather than a mutually agreed termination of contract. The circumstances in which you will be treated as having been unfairly dismissed are where;
- Your contract of employment is terminated by your employer, with or without notice s95(1)(a) ERA 1996
- Where your employer gives notice to terminate your contract, and you give a counter-notice that expires before the end of the original notice period – s95(2) ERA 1996
- Where the contract of employment is a limited-term contract and terminates on the happening of the limiting event – s95(1)(b) ERA 1996
- Where you terminate the contract by resigning, with or without notice, but in circumstances in which you are entitled to do so because of your employer’s conduct (constructive dismissal) – s95(1)(c) ERA 1996
The reason for dismissing you
Your Employer has to prove that the principal reason for your dismissal was a potentially fair one. The potentially fair reasons for dismissal are set out in section 98 ERA 1996. These are;
- Your lack of capability or qualifications to your job.
- Gross Misconduct or repeated Misconduct.
- A legal bar or requirement which means that you cannot do the job.
- Some other substantial reason.
Your employer can discipline and dismiss you in all the categories except Redundancy. Your employer does not have to follow the ACAS Code on discipline and grievance procedures in Redundancy, but if your employer cannot prove that it is a true redundancy, then it will be an unfair dismissal.
The Employment Tribunal will not consider whether you were actually guilty of the misconduct, but whether your employer believed and had reasonable grounds for believing that you were guilty of the misconduct at the time the decision was made. The only way that your employer can prove that they believed and had reasonable grounds for this belief is by proving that they acted within S98(4) ERA 1996.
The Duty to follow a fair procedure
After establishing that the reason for the dismissal is for one of the potentially fair reasons in section 98, the Employment Tribunal will then decide whether your Employer acted reasonably in treating the chosen potentially fair reason as the reason for dismissing you, taking account of the size and administrative resources of your Employer as well as the substantial merits of your case. For the decision to dismiss you to qualify as reasonable, your Employer must carry out a reasonable investigation of potential disciplinary matters without undue delay to establish the facts of the case.
This requirement makes up the second test. This is called the Reasonableness Test or “the band of reasonable responses” and is set out in S98 (4) of the Employment Rights Act 1996. The requirements of a reasonable investigation were explained in the case of British Home Stores v Burchell (1978). This is known as the Burchell Test.
The Burchell test says that to show that they acted fairly in dismissing, your Employer must prove that at the time of the dismissal;
- Your Employer had a genuine belief in your guilt.
- There were reasonable grounds for that belief.
- Your Employer carried out as much investigation as was reasonable in the circumstances.
It is the result of the investigation that will prove that your employer had reasonable grounds for believing that you were guilty, and the decision must be made on “the balance of probabilities”.
The requirements of a fair procedure are laid out in case law, the ACAS Code of Practice on Disciplinary and Grievance procedures, your employment contract (or collective agreement) and your employer’s internal disciplinary procedure.
Compensation for unfair dismissal
If you are successful in your claim for unfair dismissal one of the possible orders that the employment tribunal can make is an order for compensation – s112 ERA 1996. Under s118 ERA 1996, an award of compensation for unfair dismissal can consist of;
- A basic award to reflect the fact that you have been unfairly dismissed.
- A compensatory award to compensate you for your financial losses suffered as a result of the unfair dismissal.
- An additional award if your employer does not comply with an order for reinstatement or re-engagement. The tribunal can award additional compensation of between 26 and 52 weeks’ pay.
See Schedule of Loss for Unfair Dismissal for detailed guidance on unfair dismissal compensation
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This resource is published by Employee Rescue Limited. Please note that the information and any commentary on the law contained herein is provided for information purposes only. The information and commentary does not, and is not intended to, amount to legal advice. Employee Rescue accepts no responsibility for any loss occasioned to any person acting or refraining from action as a result of the material contained in this publication.
Further specialist advice should be taken before relying on the contents of this publication. You can send an e-mail to firstname.lastname@example.org for such specialist advice if required.