Employees with one year’s continuous employment are protected from being dismissed unfairly.
Employers can dismiss employees lawfully if the employer:
- has a fair reason for dismissal, and
- follows a fair procedure
Fair reasons for dismissal are:
- incapacity (including (i) poor performance and (ii) illness)
- some other substantial reason (such as reorganisation)
- a statutory restriction
If an employer has one of these fair reasons, it is then obliged to conduct a fair dismissal procedure. For dismissal for poor conduct and poor performance the ACAS Code of Practice is relevant.
In a number of situations a dismissal will be automatically unfair. For example, where the employer’s reason for terminating has to do with:
- taking action on health and safety grounds
- discrimination because of race, sex, disability, religion or belief, sexual orientation or age
- pregnancy or any other reason connected with the pregnancy
- membership (or non-membership) of a trade union and for trade union activities
- making a protected disclosure (whistleblowing)
- the transfer of a business or service to another employer under the Transfer of Undertakings (Protection of Employment) Regulations (TUPE)
An employer that is at risk of an unfair dismissal claim may decide to offer the employee a compensation payment rather than face the prospect of going to the employment tribunal. The employer will safeguard its position by ensuring that both parties enter into a settlement agreement detailing the employee’s agreement to waive the unfair dismissal claim.