How to Handle Unfair Dismissal for Your Employees


The most contentious area of law as far as small businesses are concerned is perhaps the requirement that employees should not be unfairly dismissed. Stories abound which purport to show that no one can be dismissed without employers paying a stiff penalty. For instance, opponents of the law cite one case in which it was decided that a night-shift worker was unfairly sacked, even though he had been found asleep during his shift-However, closer inspection of the facts of that particular inci­dent shows that, in this case at least, the law was not such an ass as it might have seemed. It transpired that the workers on nights, once their work was complete, were allowed to occupy themselves in almost any way they chose – as long as they kept out of trouble and did not leave the premises – and it had long been the custom for some workers to sleep once their work was done. It was for this reason that the dismissal was unfair.

First it is worth examining what the unfair dismissal law says, to whom it applies, and who judges the fairness or otherwise of dismissals.

Unfair Dismissal Employees

The first important point is the definition of dismissal. In law, if the contract ends in any one of the three following ways, the employee has been dismissed:

1. The contract of employment is terminated by the employer, with or without notice.

2. A fixed-term contract expires and is not renewed.

3. The employee terminates the contract, with or without notice, in circumstances such that he is entitled to terminate it with­out notice because of the employer’s conduct.

As far as (2) is concerned, the employer may include a clause in the contract, provided it is for a fixed term of at least one year, to the effect that the employee waives his right to claim unfair dismissal if his contract expires and is not renewed.

If there is a dismissal under any of these categories, the law imposes two requirements. First, there must be a fair reason for the dismissal: capability, including health; misconduct; redundancy; the fact that continued employment would mean break­ing the law; or some other substantial reason. Second, having regard to the size and administrative resources of the firm, the employer must have acted reasonably in treating that reason as sufficient to warrant dismissal. The provision about size and administrative resources was inserted into the legislation in 1980 as part of a deliberate policy of easing the burden of unfair dismissal law on small companies. It is, though, questionable whether it has really made any difference in practice. Before 1980 the fairness of a dismissal was always judged according to the circumstances of each particular case. This would, of course, include taking account of the size of the company and whether it could be expected to operate sophisticated rules and procedures which would be appropriate for a large organisation.

The right not to be unfairly dismissed does not apply to all employees. The most notable exception relates to continuous service. The basic rule is that employees must have been em­ployed for at least one year (two years if their employment commenced on or after 1 June 1985), during which time they must have worked for at least 16 hours a week, but there are two variations to this rule. Employees who work in companies which, throughout the whole of their employment, have em­ployed no more than 20 people, need two years’ service (regardless of their starting date) before they qualify, and em­ployees who work for less than 16 but more than eight hours a week do not gain protection against being unfairly dismissed until they have been employed for five years.

Other groups who are excluded from the right include: em­ployees who usually work outside Great Britain; registered dock workers; the police; and people who, when they are dis­missed, are over their company’s normal retirement age or, if there is no such age, are over state pension age.

Unfair Dismissal Employees

If an employee is dismissed, and does not fall into one of the excluded groups who judges his case? His application in the first case is heard by an industrial tribunal which is composed of three members: a legally qualified chairman and two lay members, one nominated by the Confederation of British In­dustry and the other by the Trades Union Congress. The main difference between tribunals and ordinary courts is that in a tribunal the case will not just be judged on the evidence given by witnesses as a result of questions put by employer and employee (or their representatives). The tribunal will try to estab­lish what really happened and, to this end, will help both sides to put over their case if necessary, thus enabling people to rep­resent themselves and so avoid legal costs.

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Filed Under: Work & Careers

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About the Author: Vanessa Page works a career counselor in one of the leading firms in Los Angeles. She is also a blogger and gives tips on how people can tackle their work and career issues. She has 8 years of experience in this field.

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