UK Fact-File Part 6:
Individual Business Employment Issues

6.4 UK Employee Dismissal Rules

The termination and dismissal of employees

There is a statutory duty to afford potential employees (and existing employees) equal opportunities and it is illegal to discriminate against a person on the grounds of sex, marital status, gender, disability, race, age or religion. There are a number of legal stipulations affecting the dismissal of employees. Proper procedures must be followed and the same provisions apply with regard to discrimination laws.

There must be a good reason for dismissing an employee; if there are not, the dismissed employee may have a case for claiming unfair dismissal. There are a number of reasons why an employee may be dismissed. These include:

Redundancy
Gross misconduct
Termination of a fixed contract

An employer must be able to demonstrate that they have followed the correct procedures when dismissing an employee.

Where redundancy is involved, there are legal requirements to consult with staff that might be affected, and unfair selection for redundancy is deemed to be a form of unfair dismissal. Employers must also beware of constructive dismissal (where they are found to have acted in such a way as to force the employee to resign, either by breaching their contract, bullying them, forcing them to work in dangerous conditions, or unreasonably changing the conditions or location of employment) and, as previously referred to, discrimination.

A member of staff can be dismissed for reason of gross misconduct – theft, assault, for instance – and they can be dismissed without notice in such circumstances.

An employee who has been dismissed has the right, depending on the circumstances, to claim unfair dismissal and may opt to take their case to the Employment Tribunal Service, which will decide whether or not they have a valid claim. Should an employer lose an employment tribunal case, they may be ordered to reinstate the aggrieved employee or pay them substantial compensation, or both.

From October 2011, the compulsory retirement age of 65 is being phased out, leaving employers with the option of not stipulating a retirement age in their company, or setting out an alternative retirement age that can be 'justified' from a business point of view, and backed up with sound evidence in this regard.