In this article we discuss what makes a fair dismissal. We look at the five potentially fair reasons for dismissal, the importance of policies and procedures, consistent treatment, and what is meant by the phrase “band of reasonable responses”.
The legal test
The Employment Rights Act 1996, section 98 (4) (ERA) sets out the statutory fairness test that an Employment Tribunal must apply when determining whether a dismissal was fair.
The test is in the form of two hurdles; firstly, that the reason for dismissal was for one of the fair reasons as set out within the Employment Rights Act 1996 section 98 (2). Secondly, whether you acted fairly in all the circumstances in treating the issue as a dismissible offence.
Importance of policies and procedures
Having company policies and procedures is vital to defending employment tribunal claims. All line managers should be trained on them to ensure they are being applied correctly and consistently across the business.
Policies set out the broad principles, whereas procedures state the specific steps to be followed in progressing issues. Both may be contained in the same document and together they reflect the culture of an organisation and the way it treats its people
Consistency is key
Consistency is fundamental in managing people; to not be consistent in how you handle a situation can lead to not only discrimination claims but can lead to a dismissal being unlawful for the unfair treatment of the employee.
Procedures set out within policies, or as standalone documents help a line manager to ensure consistent treatment and thus mitigate against discrimination and unfair dismissal claims.
Fair reason for dismissal (legal test part 1)
As previously mentioned, the first part of the legal test is to evidence that the dismissal was for one of the fair reasons as defined within the Employment Rights Act 1996; these are:
Conduct
Where the employee has done something that is unacceptable and/or is a breach of a company policy or process. It is generally something that is within their control.
Capability
Where the employee is not able to do their job either because they do not have the right skills or qualifications, or their health prevents them from doing so
Redundancy
When the job role is no longer needed
Statutory illegality or breach of a statutory restriction
Where an employee is unable to carry out their role because of a legal restriction, for example, somebody whose role requires driving, and the employee gets banned from driving
Some other substantial reason (also known as SOSR)
A general term that justifies bringing the employment contract to an end for reasons which does not fit in with the first four fair reasons above.
Acting fairly in all the circumstances (legal test part 2)
The second part of the legal test is more difficult because it focusses on what is reasonable, and there is no definition of what ‘reasonable’ is within the Employment Rights Act 1996. What may be reasonable for one employer may not be to another.
It considers whether a proper procedure was followed and whether the decision to dismiss was within the band of reasonable responses
Fair dismissal webinar
We recently recorded a webinar that aimed to answer the question – what makes a dismissal fair? If you would like to watch this webinar at your convenience, you can do so here.
Line management training
Handling disciplinary matters needs careful handling, especially cases of alleged gross misconduct where a potential outcome could be summary dismissal. It is important for all line managers to be trained in handling disciplinary matters and employment law.
Failure to follow a fair procedure, even where the employee is guilty of the offence that is being alleged, will result in a successful unfair dismissal claim. So, training your line managers is key because they play a key role in protecting the business from risk of tribunal claims.
It is the line manager who must work with the policies bringing them to life and must therefore have the knowledge and capability to do so.
If you would like to book on to our line management training, visit www.hrsolutions-uk.com/training-courses
Further HR Guidance
· Webinar Recording: you can watch the HR Solutions webinar and download the webinar slides, at https://www.hrsolutions-uk.com/resources/videos-webinars-archive/
· HR Knowledge Base: as part of your PRCA membership you can get access to the HR Knowledge Base, which is the go-to resource for thousands of business owners and managers across the UK. The HR Knowledge Base includes HR documents, templates, legal updates, news and hot topic articles as well as access to free webinars and HR seminars. To find out more call 0844 324 5840 or visit www.hrsolutions-uk.com/members-prca.