Last updated: 19th May 2021
5 valuable insights into unfair dismissal UK law.
Have you recently been dismissed from work? Do you feel the termination of your employment was unfair?
If you can demonstrate that your employer sacked you unfairly, you could pursue a no win no fee claim for unfair dismissal compensation at Employment Tribunal.
Before you take this action, we want to give you our valuable legal insight into what you need to know before pursuing your claim.
We will help you understand what is considered ‘unfair’ under UK law, the circumstances where your employer’s actions will be deemed fair, what the tribunal would qualify as unfair dismissal, and what you might expect as compensation if you win your case.
In simple terms, termination of your employment could be deemed ‘unfair’ if:
- Your dismissal did not fall within what the law defines as one, or more, of the 5 fair reasons for dismissal.
- If, where your employer can demonstrate that it did fall within this definition, that the dismissal process was not carried out fairly.
Unfair dismissal claims are governed by Section 98 (4) of the Employment Rights Act 1996.
1. So, the 5 fair reasons for dismissal are.
You will be deemed to have been dismissed fairly if your employer let you go for any of the following reasons:
- Capability or performance
- Some other substantive reason (SOSR)
ESSENTIAL FOR YOU TO KNOW
Even if you are dismissed ‘fairly’ your employer must carry out a fair dismissal process.
The Employment Tribunal will apply the ‘range of reasonable responses’ legal test when considering your claim.
CAPABILITY OR PERFORMANCE
If your employer feels you are unable to do your job properly or to those standards they reasonably expect of their employees, they can dismiss you.
That can relate to where you may be underperforming or making a number of mistakes in your work, or where they believe you are not able to do your job as a result of illness or injury.
If your employer feels you are not competent to carry out your duties, they would be expected to support you prior to dismissal. The tribunal would expect to see that they:
- In the first instance, advised you informally on the improvements expected of you
- Where your technical skills are called into question, they offered training to improve your performance
- Agreed a performance improvement plan (PIP) with you
- Invited you to a series of disciplinary hearings with first and final warnings prior to dismissal
Performance Improvement Plans
Where your employer asks you to participate in a PIP, the tribunal will consider whether they:
- Set you achievable and clear targets to meet
- Helped you achieve those targets, providing you with appropriate training & support
- Set a reasonable timeframe for your improvement (Anything from 30 to 90 days is typical)
Illness or Injury
If you have been consistently absent from the workplace due to injury or illness your employer will be expected to get details of how long you may be away from work as a result.
You are likely to be approached for this information informally at first. Then your employer may choose to obtain supportive details from your GP, or ask for a report from an occupational health advisor.
If the feedback they receive suggests you are unlikley to be able to return to work in the short or medium term, they may have grounds to dismiss you.
Once they have obtained the medical evidence, your employer is expected to look at alternative work that you could carry out under the circumstances. You should then be invited to a meeting where you can argue your case for continued employment.
Your employer must:
- Inform you before the meeting that your dismissal may be an outcome
- Allow you to be accompanied by a colleague to act as a witness
Where ill health is cited as a cause for dismissal, an employer needs to take great care that they don’t leave themselves exposed to a claim of disability discrimination. If your condition could be classed as a disability, you could advance a claim under the Equality Act 2010.
As you might expect, it would be deemed perfectly reasonable for your employer to dismiss you on the grounds of conduct, or more correctly ‘misconduct’.
Falling into 2 categories, misconduct dismissals rely on:
- Misconduct, or
- Gross misconduct
In normal practise you would not expect to be dismissed for a first offence of normal misconduct. Rather, you would be taken through a series of warnings for each incident with first and final warnings administered before dismissal.
Where you may have committed a misconduct that was not serious enough to warrant the immediate termination of your employment, but too serious for a first written warning, your employer may choose to issue a final written warning in response.
You can find yourself summarily dismissed (i.e dismissed without notice) where you have committed a serious act of misconduct – known as gross misconduct.
Some examples of gross misconduct in the workplace, include:
- Drug or alcohol abuse
- Intimidation or bullying behaviour
- Bringing your employer’s reputation into dispute
- Breaching of Health & Safety rules
- Fraudulent behaviour
- Breaching social media policy, etc
No matter how serious the offence however, your employer is still duty bound to follow a fair procedure before dismissing you. Whilst there is no definition of a fair procedure the ACAS guidance to ‘dismissing someone fairly’ gives a good insight into what the Employment Tribunal would expect to see from your employer.
At the least, this procedure should include the following:
- A fair and thorough investigation carried out by your employer into the misconduct in question
- The sharing of any evidence gathered against you. This could include cctv footage, witness statements, or other corroborating documentary evidence relied upon
- An invitation to attend a disciplinary hearing where you can argue your case (you have the right to have a colleague with you)
- Your right to appeal any decision made
If this procedure is not followed by your employer, you are likely to have a case for pursuing a claim.
Your unfair dismissal claim would also be valid if, following a fair dismissal procedure that found you innocent, you were sacked anyway.
This relates back to the legal test of the ‘range of reasonable responses’ available to your employer. If the tribunal finds that terminating your employment was not a reasonable response (that would have been reached by a hypothetical employer), then they are very likely to rule in your favour.
Though seldom used as a reason for dismissal, if your continued employment meant your employer was in contravention of the law, then dismissing you would be deemed fair and you would not have recourse to legal action.
For example, if you are employed as a delivery driver and lost your driving license. As long as your employer has tried to find you alternative employment but could not do so, they would be justified in dismissing you on the grounds that it would be illegal to continue to employ you in a role that required a valid driving license.
Of course, they would still need to follow the appropriate procedure before dismissing you.
Redundancy is a very common reason for dismissal. Where they are able to demonstrate that your position is genuinely redundant, this would be grounds for fair dismissal by your employer.
Essentially, they are 2 ways you can prove unfair redundancy and have grounds for unfair dismissal compensation.
- Where you can prove your role is not redundant, i.e it is a sham redundancy.
For example, you can provide evidence that:
- Someone else has been hired to carry out your supposedly redundant role
- Your employer advertised your position shortly after you were made redundant
- Despite changing the job title, they have employed someone to carry out the same roles and responsibilities you were employed to do
2. Where you can demonstrate that your employer did not take you through a proper redundancy procedure.
In order to establish that your redundancy dismissal was fair, your employer should:
- Give you as much notice as possible that you are at risk of redundancy
- Carry out proper consultation with all employees under threat of redundancy, or with the appropriate trade union
- Ensure the pool of employees at risk of redundancy is fairly defined (for example, if a construction company employees 3 bricklayers and needs to reduce this number to 2, then all 3 should be included in the pool)
- Ensure a fair and objective selection criteria is applied (i.e, your employer cannot use criteria such as “attitude to work” or similar non-quantifiable criteria as this could lead to unfairness, depending on who is judging these attributes)
- Consider suitable alternative employment before making you redundant
- Offer you the right to appeal your redundancy dismissal
For more information about redundancy you can visit our Redundancy Advice page.
SOME OTHER SUBSTANTIVE REASON (SOSR)
Where your dismissal does not fall within one of the four other reasons, your employer may rely on the SOSR provision to demonstrate a fair dismissal.
Common examples where an employer may use SOSR, include:
- Where you have refused to sign a ‘restrictive covenant’ such as a confidentiality or non-competition agreement
- You have refused to agree to a variation in your employment contract required as part of the restructuring of the business
- If a third party (for example, a major client/customer) does not want to work with you*
- There has been an irredeemable breakdown in the working relationship or trust between you and your employer
*Please note: The reason given by the third party must be considered fair.
What if I’ve been dismissed because my company has been taken over?
If you have been dismissed as a result of a business transfer or takeover, this can be considered as automatically unfair. You may be protected under ‘Transfer of Undertakings’ (TUPE) legislation.
Your employer would need to prove that your dismissal in such circumstances was due to technical, organisational or economic reasons, in order for it to be deemed fair.
2. Can you claim for unfair dismissal under 2 years service?
Unless it is deemed an automatic unfair dismissal or falls within one of a few exceptions to the rule, you will need to have worked for your employer for 2 years in order to bring an unfair dismissal claim.
What qualifies as automatic unfair dismissal?
If you are dismissed on the basis of any of the following, your dismissal will be deemed automatically unfair. It will not matter how long you have worked for your employer, if you were dismissed in connection with:
- Reasons relating to your family responsibilities: Pregnancy, Parental Leave, Maternity or Paternity Leave, Adoption Leave.
- Taking time off work to care for dependants or deal with family emergencies
- Asserting one of your basic statutory rights
- Being a Trade Union representative, a member of a Trade Union or taking part in industrial action (or equally, for refusing to join a Trade Union)
- Observing your employer breaching Health & Safety
- Taking time off for jury service
- Your refusal to work in a shop or betting establishment on a Sunday
- Enforcing your rights under flexible working regulations
- Acting as a trustee of a Pension Scheme
- A spent conviction
- Being a part-time worker
- Requesting to be paid the minimum wage
Three other notable exceptions apply to the 2 year rule for unfair dismissal claims, and they are:
- Asserting a basic statutory right
If you have experienced discrimination at work and have been dismissed on the basis of a protected characteristic (Age, Gender, Religion, Disability, Race, Nationality or Ethnicity, Sexuality, Pregnancy, Marriage or Civil Partnership status) you will not need to have worked with your employer for 2 years to advance a claim.
You may even have grounds for legal action before your employment contract started! If for example, you could prove you were not recruited because of a protected characteristic.
In these circumstances however, you would need to advance a discrimination claim rather than one of unfair dismissal. Within your claim you would be entitled to damages relating to any loss of earning you have suffered as a result.
If you can prove your employer dismissed you for making a protected disclosure (more commonly known as blowing the whistle, or whistleblowing), your dismissal will be deemed automatically unfair.
You are exempted from the 2 year rule in such circumstances under section 108(1)(3) of the Employment Rights Act.
Such unlawful termination of your employment contract would be determined where you have raised a concern to your employer in relation to:
- Failure to comply with a legal obligation
- A criminal offence
- A miscarriage of justice
- Raising a Health & Safety concern*
- Damage to the environment
- Or, the deliberate concealment of any of the above
*This can also include:
- You leaving the workplace or refusing to return to work due to concern over your health and safety
- You taking actions to protect both yourself and others (colleagues, clients, customers, or the general public) from a health and safety risk
Asserting a basic statutory right
Similarly, the 2 year rule does not apply where you have been dismissed for asserting one of your statutory rights.
These are a basic level of your employee rights and you are entitled to assert them as set out in law without the fear of dismissal. This could be seen as a catch all exception, but generally speaking will include your right to such things as:
- An employment contract
- Annual leave
- The national minimum wage
- Equal pay
- Not to have unlawful deductions made from your pay
- Receive an itemised payslip
- Adherence to Working Time Regulations
- Appropriate rest breaks
- Holiday and sick pay
You can rely on your rights in these areas even if the assertion you made was not correct, as long as you made this assertion in good faith.
There are very strict TIME LIMITATIONS that apply to advancing a claim for unfair dismissal.
You must commence proceedings within 3 months (less one day) from the date of your dismissal. If you fail to adhere to this timeframe, you will be ‘out of time’ to take your claim to Employment Tribunal.
Mr Smith is verbally dismissed for Gross Misconduct at the end of a disciplinary hearing which took place on the 15th February 2021. He receives a letter confirming his dismissal on the 17th February 2021.
The effective date of termination (EDT) was the 15th of February 2021, so Mr Smith must ensure his tribunal claim is submitted by 14th of May 2021 (three months, less 1 day).
Before you can progress to Employment Tribunal you will have to participate in ACAS early conciliation which will pause the time limit (for between 4 to 6 weeks). Once this process is concluded you will be issued a numbered certificate.
Your certificate number will be used to submit your tribunal claim and included as part of your ET1 form.
3. Unfair Dismissal vs Constructive Dismissal
Whilst both can be reasons for advancing a claim at tribunal, an unfair dismissal claim relates to when you have been dismissed by your employer. A constructive dismissal claim relates to when you have resigned because you felt your employer’s actions were so bad, you were left with no other option.
In unfair dismissal cases neither you or your employer has the burden of proving unfairness. However, the burden of proof in a constructive dismissal case falls upon you.
Because of this, constructive dismissal cases are notoriously difficult to run successfully as the legal threshold is high.
So, what is wrongful dismissal?
For many the differences between wrongful dismissal and unfair dismissal can lead to a great deal of confusion. Simply put, wrongful dismissal occurs where your employer has dismissed you in breach of the terms of your employment contract.
An example of this would be where you were dismissed and not allowed to work your notice period, or without being paid your specified notice pay.
These types of claims are not subject to the 2 year rule and tend to be of a low value.
For example, using the statutory notice period as set out under government legislation, the following would be the basis of your claim:
You have been employed for 3 years, earning £400 per week. If there was nothing in your employment contract providing a better notice period or payment in lieu of notice, your claim would amount to £1,200 (i.e 1 weeks notice for each year served).
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4. Unfair Dismissal Compensation
As seasoned unfair dismissal solicitors two of the most common questions we are asked are “How much compensation will I get?” and “How is unfair dismissal compensation calculated?”.
Obviously, if successful the amount of your compensation will be determined by a variety of factors. What we can tell you is that the average unfair dismissal award (2020) was in the region of £10,000.
Of course, it is possible to achieve financial compensation by way of an out-of-court settlement agreement. Over the same period the average settlement figure was around £6,500.
The Do I Have A Case team of unfair dismissal lawyers are experts in negotiating settlement agreements and many of our clients prefer to pursue this option, rather than face a time consuming and stressful tribunal trial.
How long can an unfair dismissal case take?
Under normal circumstances, you can expect your case to take from 6 to 12 months. Due to the unprecedented circumstances throughout 2020 and 2021 however, some cases are taking longer to be heard than normal.
5. How will my compensation be calculated?
As previously highlighted, the exact amount of your compensation will be calculated based on a number factors considered by the tribunal, namely:
- How long you worked for your employer
- How old you were when dismissed
- Your salary
If successful, your compensation or ‘unfair dismissal payout’ will fall into 2 categories of award:
- A basic award
- And, a compensatory award
Your Basic Award
Calculated in the same way as statutory redundancy pay, this is a fixed sum based on your duration of service, age and gross weekly pay.
|Your age||Number of weeks pay/duration of employment|
|Below 22 years old||1/2 a week’s pay for each year of employment|
|22 to 40 years old||One week’s pay for each year of employment|
|41+ years old||One and a half weeks pay for each year of employment|
Your weekly gross pay is capped at £544 (as at 6 April 2021), and the maximum basic award for an unfair dismissal claim is also capped at £16,320 (as at 6 April 2021), which is the equivalent of 30 weeks pay.
Your Compensatory Award
In the majority of cases this will be higher than your basic award as tribunal judges can make an award they deem equitable and just as a consequence of your employer’s actions. This is set out under section 123 of the Employment Rights Act 1996.
Typically, the amount of your compensatory award will depend upon how long it has taken you to secure another job with an equivalent salary. The tribunal judge will expect you to have taken steps to mitigate your loss by actively looking for another job, and if they feel you have not done so, this can significantly reduce the amount they award you.
Compensatory awards are also capped (this came into force in April 2019). They are capped at £89,493 (as at 6 April 2021), however if your annual income is less than this amount, the maximum you will receive is the equivalent of one year of your gross pay.
So, if your annual salary is £32,000, this would be the maximum an Employment Tribunal could award you as the compensatory element of your award. They do however also have the right to include such elements of your package as pension contributions or the value of employee benefits.
Will I have to pay tax on my compensation?
Unfair dismissal awards are considered ‘compensation for loss of office’ and as such are payable tax free up to £30,000. Please note however, tax and national insurance deductions will be made in the normal way in respect of notice pay.
It is also worth noting that your compensatory award can be increased by up to 25% if the tribunal finds your employer failed to follow proper procedure before dismissing you. Conversely however, your award may be reduced if they find you have failed to appeal, or in some way, contributed to your dismissal.
How do I make a claim for unfair dismissal?
If you want to make a claim for unfair dismissal you are entitled to advance your claim yourself online.
UK employment law is a complex area and you have a greater chance of success where you have legal representation.
Our employment law solicitors specialise in unfair dismissal cases and have helped employees like you achieve success at Employment Tribunals across the UK. They have also helped negotiate substantial pre-action or out-of-court settlements where that has been in the best interests of the client.
If you feel you have a case, you can speak to us today. Where you qualify to make a claim and we feel you have a viable case we will look to represent you through our transparent and simple no win no fee policy.
This has enabled many of our clients access to the justice they deserve, where they would not otherwise have been able to afford legal representation.
Call us now for a preliminary assessment of your case on 0800 014 8727 or 020 3923 0888. Or, you can submit your details via our ‘make an enquiry‘ form and we will respond to you via phone, email or text to advise you accordingly.