How to Dismiss Employees Safely

Letting people go is an area fraught with legal danger. Find out how to do it safely here

How to Dismiss Employees Safely

What is unfair dismissal?

If an employee started work with you after the 5th of April 2012 and they have been with you for at least two years, they can claim unfair dismissal and take you to an employment tribunal if you dismissed them unreasonably (not following the procedures outlined above). This two-year limit is reduced to one month if you have dismissed them on medical grounds. For employees who started before April 2012, the limitation period is one year.

But just because an employee hasn’t been with you for two years doesn’t mean you have carte blanche to dismiss them for any reason you choose. There are some reasons that are considered ‘automatically’ unfair, regardless of an employees’ length of service. You cannot dismiss an employee, under any circumstances, for any of the following reasons:

  • Pregnancy and maternity: You cannot dismiss anyone for exercising their right to pregnancy or maternity leave, or for being pregnant. If someone doesn’t return to work after their maternity leave is over, they will be said to have ended their own employment.
  • Safety: You cannot dismiss someone for exercising their functions as an elected safety representative or member of a safety committee.
  • Performing functions as an employee representative: You cannot dismiss someone for performing a role as an employee representative, whether or not it is union-related.
  • Pointing out risks to health and safety: This includes simply reacting to risks.
  • Membership (or non-membership) of a trade union: If you plan to dismiss a union representative such as a shop steward, it is a good idea to talk to a union official first.
  • Carrying out a role as a pension scheme trustee.
  • Questioning your disregard for employment rights: This could be making a claim or simply complaining.
  • Whistleblowing: Employees are protected when they report illegal or dangerous activities to the authorities.
  • Jury service

You should also be wary of the pitfalls of discrimination law. You will be considered to have discriminated against an employee if you dismiss them on the grounds of:

  • Sex
  • Gender reassignment
  • Marital or civil partnership status
  • Race, nationality, national or ethnic origin
  • Sexual orientation
  • Disability
  • Religion or belief
  • Age: unless objectively justified

Dismissing an employee for a discriminatory reason is particularly dangerous as a business. Whilst ‘normal’ unfair dismissal damages are currently capped at a maximum of £74,200, discrimination awards are unlimited – it’s not unusual for claimants to be awarded amounts in excess of a million pounds. Make sure you read and fully understand our guide to discrimination law if you are unsure of the provisions.

In addition, dismissing employees in connection with the sale, purchase or transfer of a business is normally unfair, under the Transfer of Undertakings (Protection of Employment) regulations, usually abbreviated to TUPE. You are not allowed to dismiss employees unless you have a genuine technical, organisational or economic reason to do so, similar to redundancy. So dismissing employees to make your business more attractive to potential buyers is generally not allowed. However, if you purchase a business and find a particular department or geographical area is underperforming, then the law might allow you to make layoffs perfectly legally. This can be a complex area of the law, so consult a legal professional if you’re unsure.

Finally, even if you don’t actually dismiss an employee, you can still be sued for ‘constructive dismissal’; this is where an employee is entitled to treat their employment as finished because you have fundamentally breached a term of their employment contract. An example would be not paying an employee their salary, or doing anything that would make it impossible for them to continue in their job – like harassing or bullying them. An employee can claim constructive dismissal if they have completed their two-year qualifying period.

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