Services

People

News and Events

Other

Blogs

Dismissals & Tribunal Claims: Everything Employers need to know

Posted
AuthorChris Dobbs

In our latest HR Coffee Break Briefing webinar, Employment Expert & Associate Chris Dobbs looked at dismissals and tribunal claims.

He provided advice for employers on where claims might arise, on what grounds and how to both mitigate and fight such claims.

This is the summary of that webinar. You can watch it back below, or read on for the summary.

What is a dismissal?

A dismissal is a clear ending of a contractual relationship with an employee, a termination of a contract.

From a Legal point of view, it is when an action is taken by you, the employer, to end a contract.

When can an employee claim unfair dismissal?

In most circumstances, for an employee to file a claim for unfair dismissal they need to have worked at the company for a minimum of 2 years. This can be carried out at a connected company.

However, if an employee thinks they have been dismissed on the grounds of a protected characteristic, or they have been dismissed for blowing the whistle, there is no service requirement for them to launch a claim for unfair dismissal.

Discrimination claims have no service requirement, and some dismissals can be “automatically unfair” and also have no service requirement.

With that being said, under the new Labour Government, the right to claim unfair dismissal is predicted to become available to all employees from day one. We’re expected to hear more information on this when the autumn budget is released.

To be the first to know upcoming changes, you can sign up to our employment newsletter here.

On what grounds can an employer dismiss an employee?

Before making any dismissal, an employer should ensure that the reason for the dismissal is clearly established.

The statutory law states that an employee’s contract can be terminated in these circumstances:

Conduct
Capability
Redundancy
Illegality / Statutory restrictions
Other substantial reasons
- Reputational risk, breakdown of trust, and potentially expiry of a fixed term contract.

The full list can be found in the Employment Rights Act.

Illegality

An employer can dismiss an employee if it has become unlawful for the employee to complete their duties or work in the UK.

For example, an employer could dismiss a driver if their legal restrictions to what vehicle they can drive changes, or if they no longer have a right to work in the UK due to an expired visa.

If an employee is on a fixed term contract, they can be dismissed at the end of the contract by the employer. However, if the contract is longer than 2 years the employer must give other evidence as to why they have been dismissed.

How to fairly dismiss an employee

It is important for an employer to establish substantive fairness. They must consider how thorough the investigation has been, the reasonable disciplinary action to take and whether there are any alternatives to dismissal (such as a final written warning or demotion).

If the employee is being dismissed based on their performance, they should have previously been given the opportunity to improve. Any suggested improvements should be reasonable, measurable and obtainable.

When it comes to disciplinary meetings, avoid asking leading questions of the employee, as this may imply that a decision was made prior to the meeting.

Similarly, making a decision on the day of the hearing could prompt the employee to challenge the validity of your decision. A period of reflection and consideration is always valuable to demonstrate that the decision has been properly considered.

What is a constructive dismissal?

A constructive dismissal takes place when an employee resigns in response to a fundamental breach of contract by the part of the employer.

This fundamental breach of contract might be a breach of an express term (i.e. one written in to the contract), such pay or office location, or breach of a term implied in to the contract.

The most common implied term which is claimed to ha been breached is the duty of trust and confidence, which requires employers not to conduct themselves, without reasonable cause, in a way that may damage or destroy the confidence and trust of their employees.

If the employer does damage the relationship, this can be considered breach of that implied term and the employee is allowed to resign and potentially claim against them.

What constitutes a breach of trust and confidence?

There are various ways in which the relationship can be damaged, a few examples of this are as follows:

Bullying and (non)discriminatory conduct
Serious breaches of process or procedures
False allegations of misconduct
Undermining a senior employee
Persistently trying to change terms or pressure to do so.
Failing to adequately support an employee.
Deliberate and unjustified refusal to increase pay or benefits.

What are the risks with constructive dismissal claims?

Constructive dismissals are often seen as being in quite challenging for an employee as, to file a claim, the employee has to make themselves unemployed by resigning quickly in response to the alleged breach..

However, claims can be costly, time-consuming and potentially damaging to a business’ reputation. For this reason, it is important to be aware of where constructive dismissal cases could occur.

Be on the lookout for employees talking about the reduction of trust and confidence in the employer, or grievances being filed based on your company’s previous handling of grievances or other procedures.

How do you avoid constructive dismissal claims?

Constructive dismissal claims are easy to mitigate by at least following some kind of process and behaving in a reasonable way. An employee is generally trying to show the employer has seriously damaged their trust which is hard to do if a proper procedure has been followed in handling a complaint or performance issue.

The most successful constructive dismissal claims are the ones where there has been a clear and obvious breach, where it is obvious to everybody that the relationship of trust and confidence has significantly damaged.

From the employee’s point of view, early settlement of these claims can be problematic. The claim has often not arisen at the usual “pre-action” stage prior to resignation, unlike in discrimination claims for example where the claim can arise while still employed.

Threats from an employee to resign and then claim constructive dismissal are more easily ignored and employers will often “call the bluff” in these situations.

Claimants will try to avoid bringing a constructive dismissal in in isolation as employees struggle to both ‘prove [the] conduct was seriously sufficient’ and that ‘[they] resigned in response to it’. It is often helpful to them if there is also a discrimination claim or some other statutory breach to rely on. Nevertheless, constructive dismissal claims are something that employers will want to avoid.

Find out more about constructive dismissal and the ‘final straw doctrine’ here.

What’s the average compensation for unfair dismissal?

Constructive dismissal claims are usually low value in comparison to discrimination claims, due to there being no cap on psychological damage awards in the latter. Whereas for unfair dismissal the basic award is calculated based on a person’s age and length of service using their weekly pay which is itself capped at £700 a week. The current maximum basic award is £21,000.

On top of this payment, there is a compensatory award of up to 52 weeks’, pay subject to a cap of £115,115, that can be awarded. This is designed so that employees are only compensated for the reasonable loss of earnings caused by the dismissal.

The employee also has a duty to mitigate the loss they may face themselves. However, the tribunal will not consider this unless the respondent brings it up. An employer can use this to mitigate the losses they may face by searching for jobs the employee could have applied for.

For example, if an employee states that they are going to be out of work for 7-9 months, the employer can use a list of potential job adverts not applied for as proof that the employee has not tried to mitigate the potential loses.

According to the ACAS code, 25% can be awarded either way for failure to comply with the code of practice. This often arises where employers haven’t followed a grievance procedure in constructive dismissal.

What other claims might arise?

Additional claims could include wrongful dismissal (termination other than in accordance with contractual entitlement to do so – often concerns notice periods) or wider breach of contract claims.

In a breach of contract for valuable notice periods or loss of benefits, the employee may bring a separate civil claim. A breach of contract for pay and other statutory entitlements may include working time, holiday and/or failure to provide written particulars.

In such claims, employers are sometimes able to counter-claim if an employee owes them money, although this is rare.

Upcoming Events

Don’t worry if you missed this webinar, there are still a few more to come over the next couple of months as we conclude our series on the employee lifecycle.

The next one is taking place on Wednesday 2^nd October, where Chris will be looking at dispute resolution and settlement in employment.

You can sign up to our free newsletter to receive invitations to upcoming webinars and events here.

You can also find recordings, slides and summaries of previous webinars here.

Employment & HR Solicitors

Our bright Employment Team has a vast experience in advising employers in cases of all kinds.

We’d be happy to provide tailored advice and assist you in mitigating, preventing and fighting unfair dismissal claims, or anything similar.

You can call us on 01202 499255, or fill out the form at the top of this page, for a free initial appointment.

We also offer tailored courses for new and experienced employers and HR professionals alike, which may be useful to you.

You can find out more here.

The content of this article, blog or video is not intended as specific legal advice. For tailored assistance, please contact a member of our team.