Unfair dismissal

An employee with more than one year's service is entitled to bring a claim in the Employment Tribunal if he or she is dismissed in circumstances where:

There was not a fair reason
Dismissal was not within the range of reasonable responses open to a reasonable employer in the circumstances
A fair procedure was not followed in reaching the decision to dismiss

In deciding whether the employer acted reasonably in dismissing an employee, a Tribunal will also take account of whether he or she followed appropriate disciplinary procedures.

Employers are expected to follow a procedure in line with the Acas Code of Practice, even in cases of alleged gross misconduct.

Procedural fairness

The Employment Act 2002 (Dispute Resolution) Regulations 2004 set out a standard (three-step) procedure for handling discipline and dismissal.

However, on 6 April 2009, these statutory dispute resolution procedures were repealed in their entirety when the provisions of the Employment Act 2008 were implemented. As a result, a new Code of Practice on Disciplinary and Grievance procedures issued by Acas came into force

Employment Tribunals now refer to this code to determine whether or not a fair process has been followed.

The code applies to any disciplinary or grievance situation but particularly where disciplinary action may result in dismissal or action just short of dismissal (such as demotion, transfer or loss of pay). As such, employers should ensure that a fair process in line with this code is followed when dismissing an employee, in order to avoid unfair dismissal.

The Employment Equality (Age) Regulations 2006 removed the upper age limit on unfair dismissal. In order to dismiss an employee by reason of retirement, it is necessary to follow established retirement procedures.

Employers that do not follow these procedures may find their actions are procedurally unfair and/or discriminatory on the basis of age. These procedures are available from the Acas website.

Automatically unfair reasons to dismiss

There are certain exceptions to the requirement for one year's service, when dismissal is automatically unfair. These include an employee being dismissed because he or she:

Is a trade union member or takes part in such activities
Is not a trade union member
Is pregnant or is taking maternity or parental leave
Takes action on health or safety grounds
Demands a statutory employment right
Refuses in certain circumstances to work on a Sunday;
Is employed in circumstances where the transfer of undertakings regulations apply
Acts as an employee representative, or is a candidate for such a position;
Is a 'whistle-blower'
Is a pension scheme trustee

Employees who have been dismissed as a direct result of their gender, race, nationality, ethnic or national origins, or disability, sexual orientation, may also bring a claim under the discrimination laws at any time as there is no qualifying period. The discriminatory treatment can include dismissal.

Tribunal awards

Employment Tribunals may order an employer to re-instate an employee who has been unfairly dismissed. If the Tribunal does not order re-instatement or if the re-instatement order is not complied with, it will award compensation.

The Tribunal can award damages for unfair dismissal up to £65,300 (as at 1 February 2010). There is no limit to the award, where the employee was dismissed for reasons connected with health and safety, or a public interest disclosure (whistle blowing).

The compensation awarded may be reduced by the Tribunal if, for example, it is found that the employee was partly to blame for the dismissal, or that she/he has not tried to find another job in the meantime.