Unfair Dismissal Claims

Unfair dismissal occurs when an employer terminates employment without a fair reason or fails to follow a proper dismissal procedure.

For a dismissal to be fair, the employer must show it was for one of the potentially fair reasons (conduct, capability, redundancy, statutory illegality, or some other substantial reason) and that they followed a reasonable process.

Most unfair dismissal claims must be brought within three months less one day from the effective date of termination. Before submitting a claim to the Employment Tribunal, you must first notify ACAS and go through the Early Conciliation process, which can extend this time limit. An employee will need an Early Conciliation certificate before issuing a claim in the employment tribunal. A certificate will be required for each Respondent (if more than one employer).

ACAS Early Conciliation is a mandatory process that must be undertaken before an Employment Tribunal claim can be submitted. It provides an opportunity for employers and employees to resolve disputes without formal legal proceedings. The process typically lasts up to six weeks and involves a conciliator helping both parties reach a settlement. If a settlement cannot be reached, then the employee is provided with an Early Conciliation certificate.  However, either party does not have to engage in settlement discussions and can request an Early Conciliation certificate during the conciliation process.

Compensation typically consists of:

• A basic award calculated using a formula based on age, length of service, and weekly pay (subject to statutory caps)
• A compensatory award covering financial losses (primarily lost earnings), capped at the lower of £105,707 (as of April 2024) or 52 weeks’ gross salary. However, it is rare for employees to be awarded the maximum amount.

Additional compensation may be available in cases involving discrimination and whistleblowing.

There are five potentially fair reasons for dismissal:

1. Conduct (such as misconduct or gross misconduct)
2. Capability (including performance issues and ill health)
3. Redundancy (reduced requirement for a particular role)
4. Statutory illegality (where continued employment would break the law)
5. Some other substantial reason (SOSR) such as a serious breakdown in trust and confidence between the parties, or where an employee works onsite for a third party i.e cleaner a request from a third party provider to remove an employee from their site.

Even with a fair reason, the dismissal must follow a fair procedure to be considered lawful.

Key preventative measures include:

• Implementing clear, written policies and procedures for especially for disciplinary matters and performance management
• For redundancy dismissals ensure there is a clear business case and a fair and transparent consultation process mapped out
• Providing regular training for managers on handling dismissals properly
• Following the ACAS Code of Practice on Disciplinary and Grievance Procedures
• Documenting all stages of performance management and disciplinary processes
• Conducting thorough investigations before proceeding to a disciplinary hearing
• Ensuring consistency in the way similar cases are handled
• Offering a right of appeal against dismissal decisions

Settlement agreements can be appropriate when:

• There is mutual recognition that the employment relationship is no longer working
• You want to avoid the uncertainty, management time, and costs associated with tribunal proceedings
• The legal risks of dismissal are significant
• You wish to include additional terms such as confidentiality provisions, restrictive covenants or a reference.

Our team can advise on whether a settlement agreement is appropriate in your specific circumstances and help negotiate terms that protect your business interests.

If an Employment Tribunal finds that a dismissal was unfair, potential outcomes include:

• Financial compensation to the employee
• In rare cases, reinstatement or re-engagement orders
• Reputational damage and potential impact on staff morale
• Legal costs of the winning party in certain situations such as if defending the claim was vexatious (though these are not typically awarded in Employment Tribunals)
• Management time spent dealing with the claim and hearing

Early legal advice can help assess risks and explore settlement options before reaching this stage.

To bring a standard unfair dismissal claim, you generally need:

• At least two years’ continuous service with your employer (although this may change with he upcoming Employment Rights Bill)
• To be an employee (rather than a worker or self-employed)
• To bring your claim within the time limit (typically three months)

Exceptions to the two-year qualifying period exist for dismissals related to certain protected reasons, such as whistleblowing or asserting a statutory right.

If you felt forced to resign due to your employer’s conduct, you may have a claim for constructive dismissal. To succeed, you must show:

• Your employer breached your contract in a significant way
• You resigned in response to that breach
• You did not delay too long before resigning (which could suggest acceptance of the breach)

Constructive dismissal claims can be challenging to win, so it’s important to seek legal advice before resigning.

Yes, if you believe your redundancy was not genuine or the process was unfair. This might include situations where:

• Your role was not actually redundant
• The selection process was unfair or discriminatory
• Your employer failed to consider suitable alternative employment
• There was inadequate consultation
• Your employer recruited for a similar role shortly after making you redundant

1. Request a written statement of reasons for your dismissal (if you have two years’ service) and have not already received them.
2. Gather all relevant documentation (contract, correspondence, performance reviews, investigation notes etc.)
3. Make notes about the dismissal process while events are fresh in your mind
4. Contact ACAS to begin Early Conciliation within three months of your dismissal
5. Seek legal advice as soon as possible to understand your options and the strength of your case

Not necessarily. Many unfair dismissal claims are settled before reaching a tribunal hearing, either through ACAS Early Conciliation or through negotiations between legal representatives. If your case does proceed to a hearing, you will be required to attend the hearing and usually be required to provide evidence however, we will fully prepare you and provide representation throughout the process.

This is a generic overview and is not a substitute for legal advice. Should you require advice regarding dismissing an employee or if you have been dismissed or are going through a process which could lead to dismissal. Please contact our specialist team to see how we can help.