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Unfair dismissal and changing regulations – How might they impact employers?

As the new Government pledges to extend the right to claim unfair dismissal to all employees from the first day of their employment, recent weeks have seen plenty of discussion around what classes as unfair dismissal.

There have also been intense debates over how the law is and will be applied to employers, as well as their employees.

It’s important that you understand your employees’ current rights and those which could be extended under the new Employment Rights Bill – and what this might mean for you.

Is it unfair?

As it stands, employees are protected by the law from unfair dismissal after two years’ service with your business. This means that, if you need to dismiss a staff member after this time has elapsed, you’ll need to take care to do so for a potentially fair reason, such as:

Misconduct

Gross misconduct (summary dismissal)

Capacity, such as performance

Redundancy

If continuing the employment would be unlawful, such as a driver losing their licence

Another substantial reason, such as being imprisoned.

An Employment Tribunal is likely to find in your favour as an employer if you can demonstrate that dismissal was only or primarily for one of these reasons.

Automatically unfair dismissal

However, some reasons for dismissing someone are automatically unfair and claims for these reasons are not restricted by two years’ service. These reasons include:

Being part of a trade union or participating in lawful industrial action

Whistleblowing

Health and safety-related dismissals

Discrimination on the grounds of a protected characteristic

Asserting certain legal employment rights.

You should always avoid dismissing an employee for these reasons as you are not protected by the requirement for two years’ service before claiming and you may face more complex legal challenges.

Always document communications with a dismissed employee, particularly if there is a risk that you could face an automatically unfair dismissal claim.

Changes in the rules

New regulations proposed by the Government could see employees able to claim unfair dismissal from day one of employment – requiring employers to have a fair reason to dismiss them, even within the first two years of service.

This has prompted concerns from employers around their rights and the use of probationary periods.

It is good practice for employers to document all communications around dismissal, as it is now more important than ever to demonstrate that you had a good and fair reason to dismiss someone.

You’ll also need to make sure that you follow procedures and provide rights as outlined in your employee’s contract, as failing to do so could result in a claim of ‘constructive dismissal’ – another type of unfair dismissal also currently under a limit of two years’ service or more.

This will help to protect you should you face a rise in unfair dismissal claims.

Additionally, the Government has outlined that employers will still be entitled to implement a probationary period “to assess new hires” – but new regulations may change what is considered a fair and allowable reason to dismiss an employee during their probation.

It will need to be made clearer how day-one rights to claim unfair dismissal will relate to probationary periods and the rights of employers to dismiss employees during this period.

Ultimately, employers will need to take steps to ensure that all employees are dismissed for a fair reason where necessary and that this is evidenced and documented properly.

If you are facing unfair dismissal as an employee, we can help. For further advice, please contact our Employment Law team today.

Amanda Hyam

Head of Dispute Resolution and Employment

I have specialised in Dispute Resolution, Civil Litigation and Employment law for more than 15 years. I understand how daunting the prospect of litigation can be and because of this I am always available to discuss concerns.