5 Fair Reasons for Dismissal

Getting dismissals wrong can be very costly, so in this article we provide an overview of the five fair reasons for dismissal. All too often we find managers wanting to dismiss an employee, but unsure about what to call the dismissal (how to frame it) and what procedure to follow. And, as you will know, if they get it wrong, this can take a lot of time and effort to sort out further down the line.

If you have stumbled across this article looking for training or support, please visit our managing discipline and dismissals training page or HR services page.

Unfortunately, dismissals are sometimes unavoidable but you should always ensure any dismissals you make are fair.

What are the 5 fair reasons for dismissal?

1. Conduct/misconduct

• Minor issues of conduct/misconduct such as poor timekeeping can usually be handled by speaking informally to the employee.
• When such behaviours escalate or persist, though, disciplinary warnings (1st or 2nd written, or even final written) can be given on grounds of misconduct.
• There is no requirement to start at a 1st level warning if the circumstances warrant a higher level warning being issued.
• Continuing misconduct will eventually result in a dismissal on ‘grounds of misconduct’.
• Very serious conduct issues, such as theft, or discriminatory behaviour are usually regarded as gross misconduct.
• A gross misconduct finding will result in the employee’s summary dismissal i.e. dismissal without notice (the only occasion when you can dismiss without notice).

2. Capability/performance

This heading includes dismissals for two different reasons; capability – meaning ill health or poor performance.

Capability can include ill health, for example if an employee has a persistent or long-term illness such as cancer that makes it very difficult to do their job. Before dismissal the employer will need to:

• Consider how the employee can be supported (particularly if they have a disability and reasonable adjustments need to be considered).
• Allow time for the employee to recover and to monitor the situation.
• Have a full understanding of the employee’s condition, treatment and likely prognosis, usually via a report from a Doctor or other Medical or Occupational Health professional.
• Have considered other options, e.g. other roles, part-time, flexible working etc.

Poor performance is when an employee is not capable of performing to a satisfactory standard within their role. The employer is usually obliged to follow their performance management process prior to dismissal. This is likely to include going through the disciplinary warnings and giving the employee, at every stage of the process, time to improve, plus support and training if appropriate.

It is not possible in performance situations to dismiss without having first worked through all the stages of the relevant procedure.

3. Redundancy

A redundancy is when the employer requires fewer (or no workers), for example:

• If the business is closing down.
• If there is less work for employees to complete.
• If there is a change in location.
• If one particular role or function is no longer required.
• If there is a reorganisation of the work meaning that there are new jobs that are very different to the old ones.

Dismissal on grounds of redundancy can only take place after the appropriate consultation has taken place. The process of redundancy usually takes a minimum of 2 weeks and often is more likely to be 4-6 weeks as the organisation works through the appropriate procedure.

Remember it’s always the job that is made redundant, not the person. Redundancy is not a dismissal option if you just have someone misbehaving or don’t like the look of them anymore!

4. Statutory illegality or breach of a statutory restriction

This category isn’t used often, but can be used when continuing to employ someone would mean that you are breaking the law. For example, if you employ a lorry driver and they lose their driving licence (and you have no other work for them), or the employee’s right to work in the UK expires.

Remember that statutory illegality does not give you the right to bypass any formal dismissal procedure. You still need to follow a formal procedure to dismiss.

5. Some other substantial reason (SOSR)

Some would say that the SOSR category is the ‘dustbin’ category, and to some extent this is true – it is used for all the dismissals that don’t fit into the other four categories.

There isn’t legal definition of the dismissals that can be included in this category, but some typical examples include:

• Expiry of a fixed term contract, or dismissing temporary employees (e.g. employees covering an absence or maternity cover) to allow the original employee to return.
• When a client refuses to work with an employee and there is no other work that employee can undertake.
• If an employee doesn’t agree to changes to their terms and conditions, you could potentially dismiss them and re-engage them on new terms and conditions (after undergoing consultation and exploring all the options of course).
• If there is a personality clash that’s causing a substantial issue to the business.
• If there is a significant conflict of interest e.g. a senior employee has a partner who works for a competitor and is a serious threat.

Be aware that if dismissing on grounds of SOSR you need to have a robust case, as any claim to a tribunal would result in your approach, reasoning and reasonableness being thoroughly tested. This might be a ‘dustbin’ category but be careful of overusing it or proceeding without a strong enough case to proceed.

A 6th fair reason for dismissal?

Of course, there used to be the sixth reason for dismissal – Retirement, but the default retirement age was abolished in 2011. As a result, age can no longer be a reason for dismissal, except in special cases where a compulsory retirement age can be objectively justified and be shown to be a proportionate means of achieving a legitimate aim (such as airline pilots).

If you need further support

Developing Managers’ Confidence

Would your managers feel more confident and make fewer mistakes if they could attend one of our most powerful and eye opening courses?

Hearing the Warning Bells

One day training course for line managers on essential employment law.

This course provides an overview of the law and potential pitfalls for managers managing performance, discipline, dismissals, contracts of employment, and discrimination legislation.

Your line managers don’t need to understand the nuts and bolts, but it’s critical they know when to hear the warning bells and then to seek advice from further up the line.

Other support and training available from Jaluch:

• Day-to-day HR support with employee relations and employment law.
• Support with grievances, formal disciplinary action and Tribunal claims.
• Training on Managing Performance, Managing Absence, Managing Discipline, Diversity and Inclusion, Coaching skills for Managers.

Get in touch to find out how we can support your business.

What do our clients say?

“The support and advice we have received from Jaluch has been invaluable. Whether you just want to run an idea past them or need detailed legal advice they are always on hand to help and reassure. The training packages we have used have been well received by our employees and we certainly plan to book more. I can definitely recommend Jaluch for all aspects of HR and Training.”
Joanna Lander, Business Research Group

“We have been consulting with Jaluch since 2003 and as we are not of a size to engage our own in-house HR team we continue to avail ourselves of the guidance and advice in this area with Jaluch who have been “spot on” on each and every occasion with excellent results. There is no doubt that I rely on the HR support provided especially at times when often I would otherwise be in a lonely place. The team is approachable, friendly, prompt and professional, providing thorough explanations on processes and issues of the time.”
Edward Spiteri, GKD Technik Ltd – Commercial Director

The information contained within this article is for general guidance only and represents our understanding of employment and associated law and employee relations issues as at the date of publication. Jaluch Limited, or any of its directors or employees, cannot be held responsible for any action or inaction taken in reliance upon the contents. Specific advice should be sought on all individual matters.