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Making the decision to fire an employee can be difficult and is often the last resort for employers. Navigating the process can be a minefield so knowing what the rules are is key. Below, we explain the different types of dismissal in the UK and how to ensure a fair one when ending an employee’s contract.
Make sure your dismissal is fair
There are four types of dismissal:
- fair
- unfair
- constructive
- wrongful
You should always ensure that a dismissal is fair. You may have to reinstate a dismissed employee and/or pay them compensation if a tribunal deems their dismissal ‘unfair’ or ‘wrongful’.
You cannot fire someone because they are pregnant, a trade union representative, or a whistleblower, for example. These, along with others, would be classed as unfair dismissal. You can find more details on Gov.uk.
What’s more, if your employee feels as if they have been forced to leave their job because their working conditions are unacceptable, this is known as ‘constructive dismissal’. Examples include not receiving payment for their work or their employer allowing workplace bullying.
Wrongful dismissal is when an employer fails to follow due process – such as not giving your employee enough notice of their termination. Constructive dismissal may also be seen as wrongful.
To ensure you fire an employee legally, fairly and reasonably, there are certain procedures you should follow.
Steps to dismiss an employee legally
To help make sure a dismissal is fair, the government recommends following advice from the Advisory, Conciliation and Arbitration Service (Acas) for businesses in Great Britain, or the Labour Relations Agency (LRA) if your business is based in Northern Ireland.
Below, we look at the steps you can take to help ensure a dismissal is fair and legal.
Find out the facts
When considering an employee’s dismissal, it’s important to stick to the facts to help you stay fair and reasonable when deciding on the best course of action.
You should investigate the issue(s) for which dismissal is being considered as soon as possible. It may be useful to keep a written record of your findings.
You may find after initial investigations that the matter is best resolved informally by talking to the employee, or that adjustments can be made to improve the situation without needing to fire anyone.
If you still feel there is a case for disciplinary action or dismissal, there are further steps to take.
Inform the employee of the situation
You should inform the employee in writing that they are facing potential dismissal. You should give them information about why they’re being considered for dismissal, including written evidence if applicable.
In this letter, you should also set out a time and place for a disciplinary meeting, giving the employee reasonable time to prepare and invite someone to accompany them if they wish.
Have a disciplinary meeting
When the meeting takes place, you should set out the case against the employee. The employee should be offered the chance to respond and defend themselves. It’s also worth keeping a record of the meeting.
Put the decision in writing
After you and the employee have met to discuss the matter, you should decide whether dismissal or any other disciplinary action is necessary. You should tell the employee about the outcome in writing.
You may decide on one of the following outcomes:
- no further action is necessary
- a first warning, orally or written
- a final written warning (if it is repeated, or if the first act of misconduct is serious)
- dismissal
If you choose to dismiss the employee they should be told as soon as possible, and you should give them the reasons for your decision. You will also need to tell them when their contract will end, how long their notice period is, and inform them that they have the right to appeal against the decision.
Honour their right to appeal
Employees have the right to appeal disciplinary decisions, including dismissal. They should inform you of their appeal in writing, citing the reasons why they are appealing.
If you have to deal with an appeal, ideally it should be managed by someone who was not involved in the original case to maintain impartiality.
You should also inform the employee of the appeal outcome in writing.
Sort out termination payments
If you do decide to dismiss an employee, you will need to sort out their final paycheck (sometimes called a ‘termination payment’). This may include wages for work they have completed up until the date they were dismissed, holiday pay (if they have accrued holiday but not taken it), and benefits such as bonuses, if applicable.
You may need to deduct tax and National Insurance from parts of this payment. You can find more information about the taxation of termination payments on Gov.uk.
What happens if I don’t follow the rules?
If an employment tribunal thinks that you unfairly dismissed an employee, you may have to pay compensation to the affected employee. You may also have to re-employ them, either in their former role or another position.
» MORE: How to make someone redundant
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