Termination & Claims: Dismissal

Protection against Dismissal

Employees with at least two (2) years’ service have the right not to be dismissed other than for one of a number of potentially fair reasons which are redundancy, capability, conduct, where continuing in the position would be illegal in some way or for “some other substantial reason”. In addition to relying on a potentially fair reason to dismiss, employers must follow a fair dismissal procedure. Failure to follow a fair procedure, or terminating employment for a reason other than one of the reasons permitted by law, could result in an unfair dismissal claim. The maximum compensation for unfair dismissal is reviewed by the Government each year. It is currently (2020/2021) the lower of £88,519 or 52 weeks’ pay, plus a basic award which is calculated based on age, length of service and weekly pay (weekly pay is capped, currently (2020/2021) at £538).

For certain dismissals, such as those where the employee was carrying out health and safety activities, has made a protected disclosure (i.e. is a ‘whistleblower’) or whose dismissal was discriminatory, the compensation is unlimited (although it is still based on losses) and there is no requirement for the employee to have been employed for two years (i.e. to have qualifying service) to bring an unfair dismissal claim.

Employees may also claim that they have been “constructively” dismissed. In order to succeed in such a claim, the employee must show that their employer has committed a repudiatory breach of their employment contract, that they resigned in response to that breach and that they did not delay in resigning.

Non-renewal of a fixed-term employment contract will be a dismissal by the employer for the purposes of UK employment law.

Notice requirements

The concept of an “employment at will” relationship, where an employer may terminate the employment of an employee at any time for any reason, does not exist under English law.

An employer may terminate an individual’s employment by serving them with the notice required in their employment contract or by serving statutory notice*, whichever is longer. The employment contract may include provisions that give the employer the right to pay the employee in lieu of notice or to put them on garden leave.

*In the UK an employee is statutorily entitled to a minimum notice period of one week, increasing to two weeks after two complete years of service and by an additional week for each additional complete year of service, up to a maximum of 12 weeks.

Post-termination Restrictions

If an employer terminates an employee’s employment contract in breach of its terms, this will usually invalidate any post-termination restrictions.