Five Fair Reasons for Dismissal

To dismiss an employee fairly the business has to show that the dismissal falls into one of the five categories detailed below and to have followed a due process. Employees cannot bring a claim for unfair dismissal if they have less than 2 years completed service but companies should always have a procedure in place and adhere to it to avoid any litigation risk.

1. Conduct/Misconduct

  • Minor issues of conduct/misconduct such as poor timekeeping can usually be handled by speaking informally to the employee.
  • When such behaviours escalate or persist, though, disciplinary warnings (1st or 2nd written, or even final written) can be given on grounds of misconduct.
  • There is no requirement to start at a 1st level warning if the circumstances warrant a higher-level warning being issued.
  • Continuing misconduct will eventually result in a dismissal on ‘grounds of misconduct’.
  • Very serious conduct issues, such as theft, or discriminatory behaviour are usually regarded as gross misconduct.
  • A gross misconduct finding will result in the employee’s summary dismissal i.e., dismissal without notice (the only occasion when you can dismiss without notice).

2. Capability/Performance
This heading includes dismissals for two different reasons: capability – meaning ill health or poor performance.
Capability can include ill health, for example if an employee has a persistent or long-term illness such as cancer that makes it very difficult to do their job. Before dismissal the employer will need to:

  • Consider how the employee can be supported (particularly if they have a disability and reasonable adjustments need to be considered).
  • Allow time for the employee to recover and to monitor the situation.
  • Have a full understanding of the employee’s condition, treatment and likely prognosis, usually via a report from a doctor or other Medical or Occupational Health professional.
  • Have considered other options, e.g. other roles, job sharing, part-time, flexible working etc.

Poor performance is evident when an employee is not capable of performing to a satisfactory standard within their role. Prior to dismissal, the employer would usually be obliged to follow their performance management process, which is likely to include going through the disciplinary warnings and give the employee, at every stage of the process, time to improve, plus support and training if appropriate.
It is not possible in performance situations to dismiss without having first worked through all the stages of the relevant procedure.

3. Redundancy
A redundancy is when the employer requires fewer (or no workers), for example:

  • If the business is closing.
  • If there is less work for employees to complete.
  • If there is a change in location.
  • If one role or function is no longer required.
  • If there is a reorganisation of the work meaning that there are new jobs that are very different to the old ones.

Dismissal on grounds of redundancy can only take place after the appropriate consultation has taken place. The process of redundancy usually takes a minimum of 2 weeks and often is more likely to be 4-6 weeks as the organisation works through the appropriate procedure.
Remember it is always the job that is made redundant, not the person so redundancy is not a dismissal option if you just have someone misbehaving or don’t like the look of them anymore!

4. Statutory illegality or breach of a statutory restriction
This category isn’t used often but can be used when continuing to employ someone would mean that you are breaking the law. For example, if you employ a lorry driver and they lose their driving licence (and you have no other work for them), or the employee’s right to work in the UK expires.
Remember that statutory illegality does not give you the right to bypass any formal dismissal procedure. You still need to follow a formal procedure to dismiss.
5. Some Other Substantial Reason (SOSR)
Some would say that the SOSR category is the ‘dustbin’ category, and to some extent this is true – it is used for all the dismissals that don’t fit into the other four categories.
There isn’t legal definition of the dismissals that can be included in this category, but some typical examples would include:

  • Expiry of a fixed term contract, or dismissing temporary employees (e.g. employees covering an absence or maternity cover) to allow the original employee to return.
  • When a client refuses to work with an employee and there is no other work that employee can undertake.
  • If an employee doesn’t agree to changes to their terms and conditions, you could potentially dismiss them and re-engage them on new terms and conditions (after undergoing consultation and exploring all the options of course).
  • If there is a personality clash that’s causing a substantial issue to the business.
  • If there is a significant conflict of interest e.g. a senior employee has a partner who works for a competitor and is a serious threat.

Be aware that if dismissing on grounds of SOSR you need to have a robust case, as any claim to a tribunal would result in your approach, reasoning and reasonableness being thoroughly tested. This might be a ‘dustbin’ category but be careful of overusing it or proceeding without a strong enough case to proceed.
A 6th Fair Reason for Dismissal?
Of course, there used to be the sixth reason for dismissal – Retirement, but the default retirement age was abolished in 2011. As a result, age can no longer be a reason for dismissal, except in special cases where a compulsory retirement age can be objectively justified and be shown to be a proportionate means of achieving a legitimate aim (such as airline pilots).