Law guide: Employment

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Unfair dismissal

Unfair dismissal


The law gives most employees the right not to be unfairly dismissed. You must be able to show, not only that you had good reason to dismiss your employee, but also that you acted fairly in the way in which you handled the dismissal.

You must therefore show that you were lawfully entitled to dismiss the employee and that the dismissal was fair. If not, the employment tribunal may either make an order for reinstatement or re-engagement or award the employee monetary compensation.

Generally an employee must have 2 years' continuous service to be able to pursue a claim for unfair dismissal. If an employee started their employment before this date, then they must have one year's continuous service to be able to pursue a claim for unfair dismissal. However, there are a number of exceptions for which there is no qualifying period.

If an employee considers that they have been unfairly dismissed, they will be entitled to bring a claim before an Employment Tribunal and apply for reinstatement, re-engagement or compensation.

In England, Wales and Scotland, the compensatory award for unfair dismissal claims is limited to one year's gross pay or £89,493 (whichever is the lowest). In Northern Ireland it is limited to a maximum of £89,669. Pension contributions, benefits-in-kind and discretionary bonuses will be excluded when calculating their gross annual salary.

Note that not all unfair dismissal claims are subject to this limit, such as whistleblowing claims.

The burden of proof

Usually the burden of proving that the dismissal was fair lies with the employer. To successfully resist a claim the employer will have to show that:

  • the reason for the dismissal was a fair one;
  • the employer acted reasonably in the way the dismissal was carried out.

For a dismissal to be held to be fair, an employer must show that the reason for dismissal fell within one or more of the following categories:

  • Capability or qualifications of the employee
  • Conduct of the employee
  • Redundancy
  • The employment could not continue without a breach of a statutory duty or restriction
  • There was some other substantial reason justifying dismissal

The employer must also show that it acted reasonably in treating one of the above reasons as a ground for dismissal.

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