When a dismissal becomes an Unfair Dismissals?

What is unfair dismissal

A dismissal is unfair if the reasons for dismissal are not permitted reasons provided under section 98 of the Employment Rights Act 1996 ”.

ACAS’s Code of Conduct

The ACAS’s (Advisory, Conciliation, Arbitration Service) Code of Practice on Disciplinary and Grievances Procedures states that “fairness, transparency, procedures for handling disciplinary and grievance situations should be set down in writing, must be specific and clear.

Employees and, where appropriate, their representatives should be involved in the development of rules and procedures.  It is also important to help employees and managers understand what the rules and procedures are, where they can be found and how they are to be used”.

The Acas’s Code provides guidance to the employers drawing up a set of rules on discipline, grievances and appeals at the workplace. Employees should be informed with evidence to support any allegations against them and should be given the opportunity to challenge the allegations before decisions are reached. More importantly, the employer must also provide the employee he wants to dismiss a right to appeal against any decision to dismiss the employee.

Practical Guide to Employment Claims
What is Dismissal?

Under Employment law for the purposes of unfair dismissal, a dismissal is defined under section 95 of the Employment Rights Act 1996. A dismissal can occur in one of the following three situations:

a) Where the contract is terminated by the employer either with or without notice;

b) Where a limited- term contract expires or otherwise terminates without being renewed;

c) Where the employee terminates the contract, with or without notice, in circumstances such that he or she is entitled to terminate it without notice by reason of the employer´s conduct.

Is dismissal fair or Unfair? 

Once it has been proved that the employee is dismissed as stated above the burden of proof passes on to the employers under section 98 Employment Act 1996. The employer must prove that the dismissal was fair.

The employer must provide the reasons for the dismissal

Fair Decision?

If the employer can establish that the reason is for the following reasons, then it is treated as a fair decision. The reasons include that the dismissal is

a) related to the capability or qualifications of the employee performing work duties;

b) related to the conduct of the employee;

c) that the employee was redundant; that the employee could not continue to work in that position without contravention of a legislative provision;

e) some other substantial reason of a kind such as to justify the dismissal.

It is important to note that in unfair dismissal cases the burden of proof is upon the employer. and the employer will have to satisfy the Employment Tribunal that the reason or reasons for the dismissal are fair, otherwise, the dismissal will be held unfair.


Section 94 of The Employment Rights Act 1996, subject to certain exclusions, gives every employee the right not to be unfairly dismissed. The employee to qualify for this right; first, must have been dismissed and secondly, on the effective date of termination of the employment contract, the employee must have been continuously employed for at least two years.

Unfair dismissal compensation

The Employment Protection Act 1975 establishes the remedies for unfair dismissal, dividing compensation into a basic award and a compensatory award, also the statutes contain provisions relating to direct remedies for reinstatement and re-engagement (s 116 ERA 1996) however, compensation remains the primary remedy in most cases. Sections 111-132 Employment Rights Act 1996 contains the rules governing remedies.

Basic Award

The basic award rewards long service and is calculated mechanically in the same way as a redundancy payment. It is aimed to compensate the employee for his actual losses.

The ´basic award´ depends upon the employees continuous employment as at the effective date of termination, as the employee is to receive one and half week´s pay for each year of employment over the age of 41, one week´s pay for each year between the age of 22 and 41, and half a week´s pay for each year under the age of 22 .

A maximum of 20 years may be counted, and a maximum week pay for this purpose is limited to a fixed amount subject to review. The weeks pay as from 6th April 2019 is capped at £525 per week.

The ´basic award´ is subject to reduction;

1) by the amount of any redundancy payment received, under the statutes or due to a private scheme;

2) where tribunal finds contributory fault on the part of the employee;

3) where the ex-employee refused reinstatement;

4) where the employer has made an ex gratia payment, which was supposed to offset or extinguish all legal rights.

Compensatory Award

The s123 (1) ERA 1996 provides the basis for the ´compensatory award´: “the amount of the compensatory award shall be such amount as the tribunal considers just and equitable in all circumstances, having regard to the loss sustained by the complainant in consequence of the dismissal so far as that loss is attributable to action taken by the employer”.

A realistic compensation may occur when the employee’s actual loss of income during the period between the dismissal and the tribunal hearings, loss of accrued rights, loss due to the manner of dismissal, loss of pension rights and employment perks will be taken into consideration including future losses.

The dismissed employee must take reasonable steps to mitigate his losses. The compensatory award´ is limited to a statutory cap to the lesser of the employee’s yearly pay but capped at £86,444, whichever is lower. This rate is applicable from 6th April 2019.

Employment law is a complex area of English legal system. If you are affected by the issues raised in this article or dismissed unfairly, you can book an initial consultation with our experienced Employment Rights Lawyer instantly through video chat.

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