Dismissal

Introduction

Dismissal generally refers to the circumstance where an employer terminates the employment contract of an employee, usually at the fault of the latter.

Minimum notice periods

If a period of notice is not expressly agreed, the Employment Rights Act 1996 imposes the following minimum notice periods:

Notice by employer

Notice by employee

An employee with at least four weeks' continuous employment must give his employer at least one week's notice of his terminating of the contract.

Wrongful dismissal

A claim for wrongful dismissal is a common law action for breach of contract. The claim is available to both employees and independent contractors. The usual rules of breach of contract will apply.

Wrongful dismissal occurs where the employer terminates the contract:

• without giving proper notice or
• during its fixed term.

Dismissal without notice is known as summary dismissal. This is usually considered as wrongful dismissal unless the employee:

• waives their rights or accepts payment in lieu of notice
• repudiates the contract themselves or is in fundamental breach (e.g. wilful refusal to obey orders; failure to show professed skill; serious negligence; breach of duty of good faith).

Remedies for wrongful dismissal

An individual who believes he has been wrongfully dismissed may sue in the County court or High Court for damages. The limitation period for such a claim is six years.

Alternatively, if he is an employee, he can bring a claim to the employment tribunal provided he does so within three months of his dismissal and the claim is for £25,000 or less.

Unfair dismissal

This ocurrs when the employer terminates an employment contract without justifiable reason.

The employee, who should have been continuously employed for at least one year, must prove that they were dismissed. The employer must prove the reason for the dismissal and should seek to prove that it was for one of six statutory reasons for dismissal. The tribunal must be satisfied that the employer acted reasonably. If not the employee is entitle to reinstatement, re-engagement or compensation.

Other types of dismissal

Constructive dismissal

Normally employees who resign deprive themselves of the right to make a claim for redundancy or unfair dismissal. However, s95 of the Employment Rights Act 1996 covers situations where 'the employee terminates the contract with, or without, notice in circumstances which are such that he or she is entitled to terminate it without notice by reason of the employer's conduct'. This is known as constructive dismissal.

In Western Excavating (ECC) Ltd v Sharp (1978) it was held that an employee is entitled to treat himself as constructively dismissed if the employer is guilty of conduct which is a significant breach going to the root of the contract of employment, or which shows that the employer no longer intends to be bound by one or more of the essential terms of the contract. Whether the employee leaves with or without notice, the conduct must be sufficiently serious to entitle him to leave at once. However, he must act quickly, for if he continues for any length of time without leaving, he will be regarded as having elected to affirm the contract and will lose his right to treat himself as discharged.

Kevin Keegan v Newcastle United Football Club Limited (2010)

Facts: A football club manager resigned from his position and claimed he was constructively dismissed. He contended that when he was appointed manager of the club it was agreed that he would have the final say regarding the transfer of players into the club. The club breached this term by signing a particular player against his express wishes and that he 'had no option but to resign'.

Held: The manager had been constructively dismissed and was awarded in the region of £2m in damages.

Statutory fair reasons for dismissal

Dismissal for one of the following reasons is fair unless the employer acted unreasonably in dismissing for the reason given:

• capabilities/qualifications of employee
• conduct of employee
• redundancy
• retirement
• continued employment would contravene statute
• some other substantial reason.

Inadmissible reasons for dismissal

Dismissal for one of the following reasons is automatically unfair. This means that there is no need to meet the length of employment condition. A tribunal would also make an additional award of compensation.

• victimisation of health and safety complainants or whistleblowers
• pregnancy or the exercise of maternity leave rights
• trade union membership/non-membership/activities
• assertion of a statutory right e.g. the exercise of paternity leave rights
• unfair selection for redundancy.

Retirement

Dismissal on the ground of retirement is fair provided:

• it takes effect on or after the default retirement age of 65 (or on or after the employer's normal retirement age, if there is one); and
• the employer has given the employee written notice of the date of their intended retirement at least six months in advance and told them about their right to request to continue working.

If the employer fails to give six months' notice of the intended retirement date, they may be required to pay compensation for the late notification. If the notification is made within the two weeks prior to the intended retirement date, the dismissal will be automatically unfair.

If the employee wishes to continue working, they must make their request in writing at least three months before the proposed retirement date. Their request must be considered before the employee is retired. Failure to do so will make the dismissal automatically unfair.

Note that although the employer is required to consider any request to work after the normal retirement age, they are entitled to refuse the request. As long as the employer has followed the proper procedure, they may dismiss on the ground of retirement without the dismissal being regarded as unfair or age discriminatory. 

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