Dismissal

When dismissing someone, you must comply with their employment contract and your policies and procedures - in particular the company's Disciplinary procedure. If these are below minimum legal standards, apply the legal minimum instead.

Remember to follow any Data protection policies and notices you have. You should tell employees the types of data you might collect about them and what you do with it in an Employee privacy notice - a statement describing how you collect, use, retain and disclose personal information. For further information, read Data protection and employees.

Advance notice of termination is required, as specified in the contract of employment, but cannot be less than one week for each year of service, with a minimum of one week and a maximum of 12 weeks. This is known as the statutory minimum notice period. For more information, read Notice periods.

Employees must be allowed to work throughout their notice period as normal unless the employment contract says otherwise (ie there is a payment in lieu of notice clause or a garden leave clause).

Don’t do or say anything that might destroy or seriously damage your relationship of trust and confidence with an employee, without justification. Otherwise, they may resign and consider themselves constructively dismissed and claim wrongful dismissal or unfair dismissal.

Unfair dismissal is the main legal issue to be aware of when dismissing employees (although you should also be careful not to unlawfully discriminate).

Protected employees can only be dismissed for a fair reason and after a fair process.

Employees are protected from unfair dismissal after two years' service. There are certain exceptions, some dismissals will automatically be considered to be unfair, and employees will not be required to have two years' service before making a claim. These include dismissals for reasons such as pregnancy or maternity leave, trades union membership, whistleblowing, reporting health and safety risks or assertion of statutory rights. For more information, read Unfair dismissal.

What counts as a fair process depends on the reason for dismissal but will normally involve hearing what the employee has to say and thinking about alternatives to dismissal. Prior warning might also be needed to allow the employee to improve.

To make sure dismissal is legally effective, use clear words and a reliable means of delivery. Written notice is best but not essential unless the contract says so. These are a few types of dismissal letter you can consider using:

• Dismissal letter for misconduct
• Dismissal letter for poor performance
• Summary dismissal letter for gross misconduct
• Dismissal letter for employees without unfair dismissal rights 

It is not legally required to confirm the reason for dismissal in writing unless the employee asks or is pregnant/on maternity leave at the time.

If an Employment Tribunal decides you’ve unfairly dismissed someone, that person can claim compensation against you or return to work for you. The maximum compensation for unfair dismissal changes every year.

Instead of formal dismissal, consider whether to discuss with the employee the possibility of their departure on agreed terms, under new legal rules allowing 'pre-termination negotiations'. 

This is a dismissal where the employer has breached the terms of an employment contract. The most common example is where the employer hasn’t given sufficient notice to the employee. For more information, read Wrongful dismissal and Summary dismissal and gross misconduct.

Constructive dismissal is when an employer commits a serious breach of the employment contract between an employer and employee, resulting in the employee's resignation.

In the event of such a breach, the employee can treat themselves as having been dismissed.

Examples of breaches of contract entitling an employee to claim constructive dismissal include:

• a reduction in pay
• not being paid at all, or
• disciplinary proceedings that are wholly unreasonable.

At the heart of constructive dismissal is a breach of the duty of trust and confidence between employer and employee. This duty obligates employers and employees not to act in a way that could undermine the employment relationship. You can reduce the likelihood of Employment Tribunal claims by making sure employee grievances are resolved appropriately.

For more information, read Constructively dismissed.