Unfair dismissal

Morton Fraser Partner Innes Clark
Innes Clark
31 March 2023

Where an employer dismisses an employee without good reason and/or without following an appropriate process, the employee can potentially raise an Employment Tribunal claim for either wrongful or unfair dismissal.

Wrongful dismissal can arise where a dismissal is in breach of contract, for example, where an employee is dismissed without notice in circumstances which do not justify summary dismissal. In contrast, unfair dismissal is a purely statutory creation.

In order to raise a claim for unfair dismissal, the employee will require to satisfy a Tribunal that:-

  • they were an employee, whether part time or full time;
  • they had the necessary continuity of service (normally two years' continuous service) to bring a claim for unfair dismissal;
  • they were dismissed.

There are certain circumstances where employees with less than two years' service can bring a claim for unfair dismissal. Examples of this include dismissal for health and safety reasons, as a result of whistleblowing, or on the grounds of race, sex, disability, age, sexual orientation or religion/belief. If there is any uncertainty in relation to whether you have the necessary service to bring a claim it is advisable to seek advice from an employment solicitor.

Potentially Fair Dismissals

There are currently five situations where a dismissal will potentially be fair. These are where the dismissal is for:

  • capability;
  • conduct;
  • redundancy;
  • contravention of a statutory enactment;
  • some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held.

Once an employer has shown that the reason for dismissal falls within one of the above categories the Tribunal will then look to see whether in all the circumstances the employer acted reasonably.

Automatically Unfair Dismissals

There are certain circumstances where a dismissal will be automatically unfair. In such cases the employee requires to establish only that the reason for the dismissal was one of the automatically unfair reasons. These include dismissals:

  • related to membership of a trade union
  • due to participation in trade union activities
  • by reason of pregnancy
  • for health and safety reasons
  • due to a transfer of an undertaking
  • due to employee attempting to enforce a statutory right
  • due to whistle-blowing

This list is not exhaustive.

Constructive Dismissal

Another situation where an employee can claim unfair dismissal is where they resign and claim constructive dismissal. This claim may arise where the employee terminates their contract of employment, with or without notice, in circumstances where they are entitled to terminate by reason of the employer’s conduct. It is not enough for the employee to show that the employer’s conduct has been unreasonable in some way. The employer must have broken a significant term of the contract and then the employee would have to show that the breach of the contract was what caused them to leave.

Employees should think very carefully before resigning from their employment and claiming constructive dismissal and it is recommended that advice is taken prior to resigning.

Dismissal Procedures

The ACAS Discipline and Grievance Code of Practice sets out the basic procedural requirements of a fair conduct or capability dismissal. For more information, please see Acas Code Of Practice On Disciplinary & Grievance Procedures.

Claims and Awards

Subject to adjustments for early conciliation to take place, a claim should be made to an Employment Tribunal within 3 months of the date of dismissal taking effect (i.e. 3 months less one day).

In the event that a Tribunal finds the dismissal to be unfair they can make the following orders:

  • reinstatement
  • re-engagement
  • compensation

Although Employment Tribunals have the power to order reinstatement and re-engagement this power is seldom used. Compensation in an ordinary unfair dismissal claim is made up of a basic award and a compensatory award. The basic award is calculated in the same way as a redundancy payment and is related to age and length of service.  With effect from 6 April 2023 the maximum basic award is £19,290. The maximum unfair dismissal compensatory award is the lower of £105,707 or 12 months' pay. In certain limited circumstances the cap does not apply.

Where an employer unreasonably fails to comply with the ACAS Discipline and Grievance Code of Practice the Tribunal may increase any award by up to 25% subject always to the cap of £105,707.

For more information, please contact our expert employment law solicitors in Edinburgh or Glasgow.

For information on how an employment tribunal award is calculated see Employment tribunal awards.

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