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If you believe your employer has dismissed you unfairly, you may be able to take legal action against them by bringing an unfair dismissal claim for compensation.

However, not all employees are eligible to bring such a claim, and strict time limits apply.

Below we look at what constitutes an “unfair dismissal”, including the eligibility and evidential requirements to bring a claim. We also look at what a tribunal is likely to award you by way of compensation if your unfair dismissal claim is successful.

 

What counts as unfair dismissal?

Dismissal is where your employer brings your employment to an end. This could be for various reasons, from them being forced to make financial cutbacks to deciding that you are not the right fit for their business, perhaps because of a misconduct or performance issue at work.

However, by law, employees in many cases have a right not to be unfairly dismissed by your employer. This means that if the reason given for the decision to dismiss is not a fair reason, or your employer has failed to act reasonably in all the circumstances, this may give rise to an unfair dismissal claim.

Under the Employment Rights Act 1996, there are five potentially fair reasons for dismissal:

 

Even if your employer is able to establish a fair reason for your dismissal, the tribunal will still consider whether they acted reasonably or unreasonably in all the circumstances in treating it as a sufficient reason to dismiss you.

When assessing “reasonableness” a tribunal will look at two main considerations: whether a fair procedure has been followed and, if so, whether the decision to dismiss fell within a band of reasonable responses available to the employer. As such, in order for a dismissal to be fair, it needs to be both procedurally and substantively fair.

What constitutes a fair procedure will depend on the reason for the dismissal. In the context of conduct and capability issues, employers should follow the code of practice on disciplinary and grievance procedures provided by ACAS. This sets out the basic requirements of fairness when dealing with a disciplinary.

Failure to follow the code will not, in itself, make an employer liable to proceedings, nor does it automatically make a dismissal unfair, although a tribunal will take this into account when considering relevant unfair dismissal claims.

The tribunal may also look at any previous decision-making, and whether the dismissal decision is consistent with decisions made about other employees in the same or similar circumstances. In some cases, a decision to dismiss may be a wholly disproportionate response to the disciplinary issue involved, especially having regard to any mitigating factors. The circumstances may instead favour a lesser disciplinary sanction, such as a written warning, providing you with a chance to improve your performance or change your behaviour.

Even in cases where the conduct complained of by your employer is so serious that it arguably justifies a decision to dismiss you without notice or pay in lieu, otherwise known as summary dismissal, your employer must still investigate the circumstances and provide you with the opportunity to defend any allegations of gross misconduct.

 

Who can bring an unfair dismissal claim?

To be eligible to bring an unfair dismissal claim, you must be able to show that you have been dismissed, where you can only challenge a dismissal if you can show it actually happened.

You will not be classed as having been dismissed if you have been suspended. You will also not be treated as having been dismissed if you have resigned by choice, unless you felt forced to resign because you were pressured to hand in your notice or your employer did something that amounted to a serious breach of contract. In these circumstances, you may be able to treat yourself as having been unfairly dismissed. This is known as constructive dismissal.

You must also be classed as an ‘employee’, and have worked for your employer for a minimum period of 2 years if you started your job on or after 6 April 2012 (reduced to 1 year if you started your job before 6 April 2012). You’ll be required to meet any relevant continuous service requirement, unless you were dismissed for an automatically unfair reason.

An automatically unfair dismissal is one that is so inherently unfair that an employee is not usually required to prove any qualifying period of employment. This is because special protection is afforded to employees where the dismissal violates their basic employment rights. It is generally automatically unfair if you are dismissed because:

 

There are also several other grounds that may mean you have a basis upon which you can argue an automatic unfair dismissal. This list is not exhaustive.

Once an automatically unfair reason for your dismissal has been established, your employer will no longer be able to justify or defend their decision-making. This means the tribunal will have no cause to consider whether or not the employer acted reasonably, or failed to follow a fair procedure, as is the case in an ordinary unfair dismissal claim. Instead, the reason, in itself, will be treated as automatically unfair, with no further consideration as to the reasonableness or unreasonableness of the decision, or the procedural fairness of your employer’s actions.

If you’ve been dismissed because of a reason relating to any one of the protected characteristics under the Equality Act 2010, you may also have a claim for unlawful discrimination. For instance, selection for redundancy on grounds of nearing retirement age would be unlawful age discrimination, or dismissing you because of ill health can amount to unlawful disability discrimination — unless your employer has made reasonable adjustments to remove any disadvantage at work that you may suffer because of this, but to no avail.

 

What will you need to show for an unfair dismissal claim?

In either an ordinary or automatic unfair dismissal claim, you must show that you have been dismissed. Evidence of dismissal could be an official termination letter, or emails and texts from your employer. In practice, your employer may not always provide an honest reason for your dismissal, but asking them to provide a written explanation of their decision will, at the very least, provide evidence of a dismissal. If you’re unclear of the reason for your dismissal, provided you have 2 year’s service (just 1 year if your employment began before 6 April 2012), you have the right to ask your employer for a written statement giving the reasons why you’ve been dismissed. The employer will then have 14 days to provide you with a response.

Having been dismissed, you will have a period of 3 months less one day from the date of your dismissal or the date when your notice period ran out to lodge an unfair dismissal claim before the employment tribunal. You will then be invited to participate in early conciliation with your employer as a mean of resolving the matter amicably. If the matter cannot be resolved on mutually agreeable terms, you’ll need to prepare your claim for a tribunal hearing.

It’s for your employer to show that the decision to dismiss was fair and reasonable in all the circumstances. Even in cases where you’re alleging that your dismissal was for an automatically unfair reason, it’s still for your employer to prove that the reason asserted was not the real reason. Still, in practice, you’ll need to provide detailed witness and documentary evidence in support of your claim, including evidence in support of any assertion of automatic unfair dismissal, for which legal advice should be sought at the earliest possible opportunity.

 

How much is compensation in an unfair dismissal claim?

If your unfair dismissal claim is successful, an order may be made by the tribunal for your employer to reinstate you in your old job or re-employ you in a different role. You may also be entitled to an award of damages. This will comprise a basic and compensatory award.

The basic award is a fixed sum to be calculated on the basis of your age, gross weekly pay and length of service. The statutory formula for calculating a basic award is:

 

The pay is capped at £544 per week (as from 6th April 2021), up to a maximum of 20 years service. This means that the sum of £16,320 is the maximum basic award you can receive.

The compensatory award will reflect any loss of earnings, plus a sum of money to compensate you for the loss of your statutory rights accrued through continued service with your former employer. In the context of conduct and capability dismissals, this award could be increased by up to 25% for any unreasonable failure on the part of your employer to follow the ACAS code of practice. If, however, your claim only succeeds on the grounds of procedural unfairness, where you would have been dismissed in any event, the tribunal may limit any compensatory award to reflect the fact that following a fair procedure would not have altered the outcome.

In most cases, any compensatory award will be capped at £89,493 (from 6th April 2021). This will also be the lower of the maximum statutory limit or a year’s salary, although there are certain cases where the award will be uncapped, for example, where you’re been dismissed for whistleblowing or taking action about a health and safety issue at work.

 

Need assistance?

DavidsonMorris’ team of employment law specialists offer support and advice to employees facing difficulties in the workplace.

If you’ve been threatened with dismissal, there may be steps you can take to either safeguard your position at work or to walk away with a settlement package.

If a decision to dismiss you has already been made by your employer, and your employment has come to an end, take advice to determine if you have a potential claim for unfair dismissal.

In either case, by seeking immediate legal advice from an employment law specialist, this can help to protect and preserve your employment rights, where often there are tactical ways of dealing with an actual or threatened dismissal without recourse to litigation. Still, where an unfair dismissal claim cannot be avoided, it is important for employees to understand the basis of these types of claim and the time limits within which a claim can be brought.

Contact our employment lawyers for advice and guidance on any aspect of unfair dismissal claims.

 

Unfair dismissal claim FAQs

What is the average payout for unfair dismissal UK?

Payouts for unfair dismissal can vary significantly depending on the reason for the dismissal and the circumstances surrounding this. The maximum basic award is £16,320, with a cap on most compensatory awards of £89,493, with average awards of around £10,000.

How much money do you get for unfair dismissal?

The amount of any basic award of damages for unfair dismissal will depend on your age, gross weekly pay and length of service. You may also be entitled to a compensatory award to reflect, for example, any loss of earnings.

What qualifies as unfair dismissal?

A dismissal will qualify as unfair if, for example, the reason the employer provides for the dismissal was not genuine, the reason was unfair (or automatically unfair) or the employer acted unreasonably in all the circumstances.

How do you prove unfair dismissal?

To prove unfair dismissal, you must show that you’re an employee with the qualifying period of service and you've been dismissed. It’s then for the employer to show that the dismissal was fair and reasonable in all the circumstances.

Last updated: 2 April 2021

Unfair Dismissal Claim

If your employer has dismissed you unfairly, you may be able to make a tribunal claim.

Our employment law specialists can help.

Unfair dismissal

Employees have a statutory right not to be dismissed unfairly, or they may be able to bring a tribunal claim against their employer.

The legal process of challenging your employer’s dismissal decision can be daunting and stressful for employees, adding to existing pressures of financial loss, finding new employment and dealing with the upset of losing your job in unpleasant circumstances.

If you think you have been unfairly dismissed, you will need to act quickly. Unfair dismissal claims have to be brought within three months of being dismissed. 

Making an unfair dismissal claim

Whether a dismissal was fair and lawful is dependent a number of factors, including the employer’s reason for dismissal, whether the employer was reasonable in relying on this reason to justify the dismissal and whether the employer followed a fair procedure in dismissing the employee.

In most cases you will only be eligible to claim for unfair dismissal if you are classed as an employee and you have worked for the employer for more than two years. 

We can help

If you think you have been unfairly dismissed, DavidsonMorris’ team of specialist employment lawyers can help.

We work with employees from across the UK to help them understand their rights and support them in making a claim for unfair dismissal compensation.

We will assess your eligibility to bring a claim and the merit of your case, examining your employer’s reason for dismissal and the process they followed in dismissing you.

We will support you at every stage, managing the claims process on your behalf and dealing with your employer, their representatives and the tribunal to minimise the impact on you and to help you seek legal redress for the unfair treatment.

In most cases, employees want to settle the matter quickly and avoid going to tribunal. We have extensive experience in negotiating settlement agreements to bring the matter to a close on terms favourable to you.

 

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