Decoding the Complexities of Dismissal

Posted in : HR Updates on 29 March 2018
Shoshana Bracewell
Think People Consulting

Dismissal is a taboo topic in the employment realm and has been since the emergence of employment legislation. As an HR Consultancy, the topic of dismissal is never too far from the workload at Think People. We have an endless stream of clients who have reasons to justify the dismissal of certain employees, however despite following a compliant process, they feel it necessary to seek reassurance from our HR Consultants to ensure that they are not breaching employment legislation or best practice procedure. The need to seek reassurance arises due to the serious implications of a breach at an Employment Tribunal.

Aside from the stigma around dismissal in general, are the complexities which surround the different types of dismissal. We often find that our clients tend to get confused with the categorisation of dismissals, which subsequently affects the choice of procedure they choose to deal with the situation. This article will provide a brief overview of the types of dismissal which are recognised within current employment practices.

Fair Dismissal

An important starting point for anyone dealing with a potential dismissal is a knowledge of what constitutes a fair dismissal. The Employment Rights Act 1996 outlines a number of potentially fair reasons whereby an employer can justify dismissal. These fair reasons include:

  • Capability
  • Conduct
  • Redundancy
  • Statutory illegality (this can include, for example, a truck driver who loses their driving license and thus cannot fulfil their duties)
  • Some other substantial reason (this can include the end of a fixed term contract where an individual is employed to cover a period of maternity absence and as such the temporary arrangement has come to an end)

However, any dismissal will only be seen as fair if the employer acted reasonably throughout the dismissal process. Also in any dismissal case, an appropriate procedure must be followed by the employer prior to reaching an outcome of dismissal. Employers should take good cognisance of the LRA codes of practice. This means that the key things to be mindful about when contemplating dismissing an employee are

  1. the reason you are opting to dismiss; and
  2. the process you follow during the dismissal process.

Company policies and procedures are often put on a back burner whilst the day-to-day employment activities take priority.  However, a robust disciplinary procedure informs all staff what is expected of them during their employment and how they will be dealt with should they decide to engage in misconduct. Thus, it is so important that all employers have clear and compliant disciplinary and dismissal procedures in place. All employees should be fully trained and be aware of the policies and procedures. Managers and HR should be knowledgeable on how to implement them.

It is also important that employers attempt to resolve situations prior to reaching the dismissal stage. Resolution can be reached by engaging in more positive approaches like further training or coaching, performance improvement plans and counselling. These are a few examples of the wide range of options which are available within an employer’s arsenal. A dismissal should ideally be the last resort and an employer should be able to demonstrate that they have exhausted all avenues with the employee.

Unfair Dismissal

As with outlining what counts as a fair dismissal, the Employment Rights Act 1996 also cements the concept of unfair dismissal. There are two specific conditions which must be met in order for a claim to qualify as unfair dismissal. A dismissal can be deemed unfair if the employer does not have an appropriate or justified reason for dismissal (like those highlighted above) and if the employer does not follow appropriate, compliant policies and procedures prior to the dismissal. The latter is also a key indicator of the importance of having robust and compliant policies in place, regardless of the size of the organisation and industry.

There are certain criteria that must be met in order to qualify for a claim of unfair dismissal, these include: the individual must be an employee, they must have completed the qualifying period of continuous employment (which is one year in Northern Ireland) and they must commence their claim within three calendar months of dismissal.

Related article:  Jenny Walker on Dismissing an Employee with Less than One Year's Service

There is, however, an exception to the criteria which circumvents the need for an employee to have completed the qualifying period of continuous employment, and this is when the dismissal is automatically unfair. Automatically unfair cases cover a range of criteria but cases of discrimination could arguably be the most common. It is important to note that in cases of automatically unfair dismissal, such as discrimination, there is no qualifying period of continuous employment.  

A key case in the area of unfair dismissal cases is the case of Polkey v AE Dayton Services Ltd 1987. This case has brought about the 'Polkey Deduction', a rule followed by the employment tribunals.

A ‘’Polkey Deduction’’ occurs when an employer has been found to have acted unfairly in dismissing an employee by failing to follow correct procedure.  A tribunal will have to decide whether the award should be reduced based on the probability that a dismissal would have occurred anyway.

In the case of Autism Sussex Ltd. V Angel 2014 the employee was dismissed for falsifying her time sheets. The tribunal placed emphasis on the idea of fairness for a claim of unfair dismissal; fairness on the reason for dismissal and also fairness in the procedure which was followed. The employee won the claim against the employer due to the fact that the employer failed to carry out a reasonable investigation prior to the dismissal process and as such, the disciplinary process was procedurally unfair.

Cases like the above highlight the importance of procedure when dealing with dismissals. At Think People, we have seen situations where the appropriate reason for dismissal exists, however the company has not followed their formal disciplinary processes or dismissal procedures or such policies are not compliant and as such are falling at the final hurdle and come dangerously close to the daunting prospect of an unfair dismissal claim.  In potential dismissal cases, employers need to demonstrate the following:

  • Genuine believe that it is a fair reason to dismiss;
  • Carried out proper and full investigations;
  • Followed relevant procedures ;
  • Informed employee in writing why they are being considered for dismissal and listened to their representations;
  • Afforded right to be accompanied;
  • Right of appeal.

In summary, in all misconduct dismissal cases the disciplinary panel need to demonstrate that they have tested the concept of reasonableness asking whether the employee could have expected to understand the consequences of their behaviour. If unable to demonstrate this then the employer is at risk of being unable to defend an unfair dismissal case.

Related article:  Jill Gracey on the General Principles of Unfair Dismissal

Summary Dismissal

Summary dismissal is essentially where an employer dismisses an employee immediately and without notice nor pay in lieu. Summary dismissal normally occurs in matters of gross misconduct for very serious misconduct. Serious misconduct could be incidences of fraud or violence within the workplace, however each employer should have clear examples of what constitutes as gross misconduct within their disciplinary policies. 

Summary dismissal carries a certain amount of stigma as it is a risky pathway and it has been viewed as procedurally unfair. However, there are occasions where a summary dismissal is entirely necessary, the key lies in a succinct understanding of not only dismissal and its complexities, but also your company policies and procedures and terms of employment. If an employer chooses to summarily dismiss an employee, they must still follow a fair procedure. In order to summarily dismiss an employee, however, it must be an explicit term of their contract of employment. If summary dismissal is not an explicit term of a contract of employment, then the employer is bound to suspend on full pay in order to investigate.

Constructive Dismissal

Constructive dismissal occurs when an employee does not want to leave, but is forced to resign from their position as a result of the employers conduct. This occurs when an employer breaches the terms and conditions of an employee’s contract. Examples of a breach of contract may be when an employer demotes an employee or decides not to pay an employee even though they have carried out the work and fulfilled their terms of the employment contract or when an employer changes the terms and conditions of a contract without prior consultation and mutual agreement. Breaches of contract can exist as a serious singular breach or can be a series of incidents which considered together amount to a serious breach.

As the employee has been forced to resign, it is interpreted as dismissal. The employee is entitled to terminate their employment with or without notice. However, the case of Western Excavating v Sharp 1978 outlined that an employee is only entitled to terminate their employment without notice in the event whereby a fundamental breach of contract has occurred. A fundamental breach occurs in a situation where the working relationship has become impossible and as such, the employee cannot continue to engage in the employment.

Wrongful Dismissal

There is no overarching legislation which governs the concept of wrongful dismissal, it stems from common law. As such, wrongful dismissal is guided through the ever-changing spectrum of case law. Although there is no overarching governing legislation, the concept of wrongful dismissal has a long-standing position within employment practices.

Wrongful dismissal is often confused with unfair dismissal, however wrongful dismissal is an entirely different concept. Wrongful dismissal occurs when an employer decides to terminate an employee’s contract of employment, but in doing so, breaches the terms of the employee’s contract of employment. The emphasis of wrongful dismissal are the conditions which were agreed by both the employer and the employee upon beginning the employment relationship and whether the employer has failed to adhere to the agreed terms.

An example of wrongful dismissal can occur when the employer dismisses an employee but they do not adhere to the notice requirements as outlined within the contract of employment. A breach of contract works both ways, if an employee breaches an explicit term of their contract of employment, then the employer is entitled to dismiss them without notice or pay in lieu as they have broken their requirements of the contract.

Concluding Remarks

A key theme relating to dismissal which continually resonates in the advice that we give to our clients is the importance of knowing your policies and procedures and to understand the specifics of the situation that is at hand. It is the idea of stopping to think in its more pure form; do not give in to knee-jerk reactions as the implications could be costly.

The first step moving forward is to review your policies and procedures on a regular basis and make sure that all HR staff and managers are aware of them; they are there to guide through situations whereby a dismissal is necessary. If you are clear on what your rationale is for dismissal and you have a deep understanding of your, hopefully robust and best practice reflective policies and procedures, dismissal can be managed effectively and with confidence.

 

This article is correct at 29/03/2018
Disclaimer:

The information in this article is provided as part of Legal-Island's Employment Law Hub. We regret we are not able to respond to requests for specific legal or HR queries and recommend that professional advice is obtained before relying on information supplied anywhere within this article.

Shoshana Bracewell
Think People Consulting

The main content of this article was provided by Shoshana Bracewell. Contact telephone number is 028 9031 0450 or email Shoshana.Bracewell@thinkpeople.co.uk

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