Q&A: Dismissing employees

Solicitor Helen Kay answers key legal questions about sacking staff  

Can I dismiss someone I took on just a few months ago?

If their employment commenced before 6 April 2012, the employee might be able to claim unfair dismissal if they have worked for you for more than one year. If their employment commenced after 6 April 2012, they can't claim unfair dismissal unless they have worked for you for more than two years. However, you must be mindful of other claims for which there’s no minimum period of service requirement, for example, discrimination, whistle-blowing or dismissal for asserting or trying to assert a statutory right. If the employee could have a basis for a claim other than unfair dismissal, you should comply with the new statutory Acas Code of Practice when dismissing the employee. 

Why do I need to follow the Acas Code of Practice?

It reduces the risk of increased compensation should the employee successfully bring a claim against you. If there doesn’t appear to be any basis for a claim, you should still follow the minimum procedure. That means inviting the employee to a meeting to discuss the issues that are leading you to contemplate dismissal and offering the right of appeal if the outcome is dismissal. Following this procedure offers employers some protection should an employee have some basis of claim of which the employer was not aware at the time of dismissal. 

What about an employee’s statutory right to notice?

You must give the employee the notice specified in their contract or statutory minimum notice – whichever is greater. Statutory minimum notice is, essentially, one week for each completed year of service, up to a maximum of 12 weeks. 

What can happen if I dismiss someone unfairly?

The employee can bring a claim of unfair dismissal in an employment tribunal if they have at least one year’s continuous service. They can claim a ‘basic award’ linked to their age, gross weekly pay – subject to the statutory cap of £450 per week from 1 February 2013 – and length of service.

They can also claim compensation for loss of earnings – which is capped under new rules at a maximum of either £74,200 or one year's gross pay, whichever is the lower – and reimbursement of fees which must be paid by the claimant when an employment tribunal case is presented. The new cap will apply where the ‘effective date of termination’ (the date on which the employee’s notice expires, where employment has been terminated with notice) or the date on which termination takes effect (where employment has been terminated without notice) is after 29 July 2013. 

What is constructive dismissal?

An employee can resign and claim constructive dismissal if the employer’s conduct constitutes a fundamental breach of contract. Reducing an employee’s salary or hours of work without their consent is an example of conduct that is likely to constitute grounds for constructive dismissal. 

What is wrongful dismissal?

Where dismissal breaches the terms of the employee’s contract of employment. For example, when an employee is dismissed without being given the agreed period of notice. 

What reasons would be deemed legal?

Potentially, fair reasons include conduct, ability, redundancy, contravention of a statutory duty or restriction or some other substantial reason. Note that the 'default retirement age' has now been abolished. It is now unlawful to compulsorily require an employee to retire unless it can be justified as "proportionate means to achieve a legitimate aim".

Can I sack a staff member on the spot?

Dismissal without notice is known as ‘summary dismissal’. An employer can dismiss summarily if the employee has committed gross misconduct. However, even in instances of gross misconduct, you should suspend the employee while an investigation is carried out, and then follow the disciplinary procedure. 

What if the standard of an employee’s work simply isn’t up to scratch?

Dismissal may be justifiable, but you must follow a formal process, which begins with telling the employee their work is unsatisfactory and informing them what they need to do to improve. You must give the employee the assistance they need, including training, and a reasonable time in which to improve. Employers are expected to have given employees an escalating series of warnings, for example, a verbal warning followed by a written warning, followed by a final written warning, before dismissal. 

When would dismissing an employee be deemed ‘automatically unfair’?

Health and safety reasons; asserting or trying to assert a statutory right such as maternity leave or national minimum wage; whistle-blowing; performing functions as an employee representative on a TUPE transfer or collective redundancy; refusing to work on a Sunday in the case of a shop or betting worker. There are many more reasons. 

I understand the three-step process no longer applies?

Although the statutory minimum three-step process was abolished in 2009, the three-step process in the Acas Code of Practice which replaced it essentially mirrors the original statutory procedures. This process also applies to gross misconduct cases. If you are ever in any doubt when disciplining or dismissing employees, seek professional legal advice.

Further reading

Find more articles, videos and tools in the Resources box on the right.

You can also find more detailed guidance on dismissals and redundancy on the Law Donut.