Employees can be dismissed for reasons such as gross misconduct or a fundamental breach of contract. A fair and robust process should be followed where all parties have certain rights and responsibilities.

An employer may make the decision to dismiss an employee if they have tried to resolve an issue informally and then through verbal and written warnings but there is still no improvement or change in terms of conduct or performance. 

An employer might also seek to go straight to dismissal if an employee has committed an act of gross misconduct which has, or could have had, very serious consequences, or if they feel the employee is guilty of a fundamental breach of contract. 

However, whatever the reason or background, employers must follow the statutory three stage dismissal and disciplinary process.  Both parties should also follow the relevant steps in the Labour Relations Agency Code of Practice on Disciplinary and Grievance procedures and may face penalties if the case goes to tribunal and they haven’t done so.

Fair and unfair dismissal

A fair dismissal is when an employer ends an employee’s contract of employment for one of the following reasons:

  • A reason related to capability or qualifications;
  • A reason related to the conduct of the employee;
  • That the employee’s position was redundant;
  • That the employee could not continue to work in the position which he or she held a breach (either on the employee’s part or on that of the employer) a necessary duty or restriction; or
  • Some other substantial reason that would justify the dismissal of an employee holding the position.

These are considered potentially fair reasons for dismissal; therefore dismissal for a reason other than one of the above is automatically unfair, for example, dismissal on the grounds of pregnancy, or for asserting a statutory employment right.  

However, in order to show that a dismissal is fair an employer must also follow the minimum Statutory Dismissal and Disciplinary Procedure.  They must show that they acted reasonably in dismissing the employee for one of the five reasons outlined above, taking account of all the circumstances and having carried out a fair procedure.

It should be noted that employees must have one year's continuous service before unfair dismissal rights become active.  (There are exceptions to this in the case of, for example, discrimination cases.  Please call the Workplace Information Service for more information).

Statutory three stage dismissal and disciplinary process

  1. The employer must give a written explanation to the employee setting out why they have decided to take disciplinary action.
  2. They must meet the employee, who has the right to be accompanied by a colleague or union representative of his or her choice.  The employer should state their case, let the employee respond and then, after the meeting, give the employee the decision.  The employer should explain that the employee may appeal the decision if they are unhappy about the decision or outcome.
  3. The employee may appeal against the decision and again choose to be accompanied at the appeal meeting, which should ideally be heard by a different, or more senior, manager.  The employer should inform the employee of the decision of the appeal.  Finally the employee must appeal to complete the statutory procedure because there may be legal considerations, resulting in a financial penalty, if they have not appealed.

Although organisations can be flexible about how formal their procedures need to be, they must follow the statutory dismissal and disciplinary procedure as a minimum if they are considering dismissing an employee or imposing certain kinds of penalty other than dismissal, such as suspension without pay or demotion.  Unless employers follow the statutory procedure, industrial tribunals will automatically find dismissals unfair. 

Industrial Tribunals may also adjust any award of compensation up or down by 50% for failure by either party to follow the relevant steps set out in the Labour Relations Agency’s Code of Practice on Disciplinary and Grievance procedures.

Note however, that the statutory dismissal and disciplinary procedures apply only to ‘employees’.  However, it is good practice to allow all ‘workers’ access to disciplinary procedures.  The right to be accompanied applies to all workers, and the term ‘workers’ is used in section 3 of the Agency’s Code of Practice.

Last updated: 01 October 2019