Unfair dismissal

Assessment of whether you have a good case

How can we help you?

Unfair dismissal

If you are a senior executive or director and believe that you have been unfairly dismissed or believe that a dismissal is likely, we have the skills to help you. We can tell you if you have a case and if so, give you quick, practical and tactical advice.

Establishing a case for unfair dismissal

We specialise in high value claims arising from unfair dismissal.  It is our expert knowledge of the law and how it is applied in practice which gets you results.  We work with senior executives and directors across a range of sectors and industries and we are always discrete.

Special considerations arise for directors facing unfair dismissal

We find that where a director is being dismissed additional considerations arise.  For example:

  • Fiduciary duties – directors have  responsibilities and fiduciary duties which extend beyond the duties an employee owes to his employer.  These duties can sometimes be relevant in establishing if a dismissal is fair or not which in turn leads to the level of compensation payable on dismissal.
  • Post termination restrictions – the obligations which can be imposed upon a director are generally be more stringent than those that can be placed on an employee.  However, there are constraints.
  • Resignation as a director – directors carry two roles.  A director is an employee providing services to the business and has a separate role as office holder.    Depending upon how the director’s service agreement was structured, termination of employment may not give rise to an automatic termination of directorship.

Qualifying to bring a claim for unfair dismissal

Generally, to claim unfair dismissal, you have to have worked for your employer for at least two years. There are exceptions to the qualifying length of service requirement, for example where the dismissal is for reasons connected to pregnancy, flexible working requests, health & safety, and whistle-blowing. You also have to be dismissed first in order to bring a claim.

There are other instances where you may be excluded from bringing a claim. We can tell you if you qualify to bring a claim for unfair dismissal.

Fair reason for dismissal

Employers should treat employees fairly, justly, and reasonably when terminating employment. Thus, employees should be dismissed for a fair reason. Employment law sets out fair reasons and these are usually based on the employee’s capability, conduct, redundancy or “some other substantial reason”.

Some employers try and twist unfair reasons for dismissal into fair reasons and then claim the dismissal is fair.  It is in the twisting where our employment law expertise is needed. We can tell you what counts as fair for employment law purposes.

Redundancy is a common area where unfair dismissals arise and where employers fail to follow a fair process.

Change in management

Often a change in management or ownership leads to a change in directors or senior managers.  Employers often cite capability and poor performance as reasons for dismissal.

If you are also a shareholder, being dismissed could lead to you receiving only nominal value for your shares.

Does dismissal for poor performance amount to unfair dismissal?

This is probably the most common reason for dismissal but the one that is most likely to attract attention in terms of any termination settlement reached. Unless it amounts to gross misconduct, poor performance is very unlikely in practice to constitute a ground for summary termination for gross misconduct.

If the poor performance is not tantamount to gross misconduct the employer may consider performance management plans. Eventually if performance does not improve the employer can dismiss by serving notice.

Tactics at play behind some performance improvement plans

In practice, many employers decide against performance improvement plans and instead compromise the employee out of the business on grounds that may work out to be more expedient. In some cases even though the employer’s intention is to remove the employee from the business the employer may launch a performance improvement plan to make the employee uncomfortable.

Our team can advise on how to tackle issues which the employer raises and which lack substance. Use of internal grievance procedures may well advance your case.

Redundancy dismissals can be unfair dismissals

Redundancy is one of the fair reasons for dismissal. This means that apart from the entitlement to statutory redundancy pay (which is relatively modest) if there is a genuine redundancy the employee will not have a claim for unfair dismissal. Many employers are concerned about timescales and want to deal with a redundancy situation as quickly as possible. It is possible to act swiftly but the paperwork and evidence of fair selection must be prepared and applied.

There is no automatic right to appeal a redundancy decision.  However, unfair selection for redundancy is one of the most common areas where the Employment Tribunal finds unfair dismissal took place.   For that reason the vast majority of redundancy dismissals are concluded under settlement agreements.

Discrimination

If you have been dismissed for a discriminatory reason, you may also have been unfairly dismissed. You have options and we can help you consider these. You can make a claim for discrimination to an employment tribunal instead of, or in addition to, a claim for unfair dismissal.  There is no requirement to work for a specific length of time to bring a claim for discrimination.

Failing to follow a fair procedure for dismissal

With dismissals, it is important to consider the procedure that was followed. It is not uncommon for employers to be so incensed by alleged behaviour, proven or otherwise, that they dismiss employees without due regard to the correct process. Regardless of conduct or alleged conduct, an employer must follow a fair procedure which includes an employee being entitled, amongst other things, to have an opportunity to attend a disciplinary hearing and to appeal against a dismissal.

We can quickly work through the details for you and identify if and how the employer has failed on a technicality. If it has this can lead to a successful claim for unfair dismissal or being able to negotiate a better settlement.

Time limits for claiming unfair dismissal

A claim for unfair dismissal must be made to an employment tribunal. It is important to act quickly in these circumstances as any claim to an employment tribunal needs to be made three months less one day from the date of the dismissal. Before making a claim to the employment tribunal the case must first be referred to ACAS for early conciliation. We can help you navigate through this complex process.

Negotiating with the employer to increase the compensation paid for unfair dismissal

There are many ways we can help you handle unfair dismissal with your employer, including:

  • Responding to and defending allegations put forward by your employer;
  • Drafting employment grievances and managing disciplinary, performance management claims, appeals and processes;
  • Dealing with announcements to the market of your departure

Settlement Agreement

Employers will usually require you to agree to a settlement agreement (previously known as a compromise agreement), where you agree not to make a claim for unfair dismissal. Signing this means that you will not be able to bring a claim to the employment tribunal.

We tell you if the settlement offer is appropriate and are skilled at negotiating improvements to the offer, based on:

  • A legal and commercial analysis of the agreement and the case for unfair dismissal; and
  • Our experience of similar scenarios.

We will also review any employment restrictions applying after termination to see if they really are enforceable.

 A robust response

Often a robust, well argued response that lays out a clear case for unfair dismissal results in an employer quickly offering a more generous settlement. Most employers consider the management time involved, and that the case is a distraction from generating profits.

Bringing a claim to the Employment Tribunal for unfair dismissal

We offer cost-conscious advice that is practical and creative. We can advise you throughout your claim and often represent clients in the tribunal. Our experience and skill at dealing with employment matters means that we always advise you your best course of action and chance of success before you commit to bringing your claim in an employment tribunal.

Procedure & fees

The procedure for bringing a claim to an employment tribunal is complex and involves registering the claim with ACAS for early conciliation first. In most instances fees are payable by the employee when bringing a claim in a tribunal. We provide you with tactics to cost-effectively manage your unfair dismissal claim.

Time limits

Claims to an employment tribunal are subject to a three month less one day time limit so it is important that you act quickly.

We are happy to talk through the process with you and advise you on your options. If you wish to pursue the claim we have the expertise and experience represent you.

Remedies

If the tribunal finds that you were unfairly dismissed it may consider:

  • Re-instatement;
  • Re-engagement; or
  • Compensation.

The tribunal may make an award for costs to be paid by the employer although this is not guaranteed. Having a strong, well prepared and executed case will reduce your exposure to the risk of losing the claim and paying the costs. We can help you with all aspects of a claim.

Calculation of compensation

There is a cap on the maximum award an Employment Tribunal can make.

Basic award

The basic award for unfair dismissal is calculated according to a formula based on the employee’s age, length of service and weekly pay. The current maximum basic award to 5 April 2017 is £14,370.

Compensatory award

The compensatory award is not based on a formula but takes into account the financial loss suffered by the employee as a result of the unfair dismissal. The tribunal will consider loss of immediate and future wages, benefits, bonuses and pension rights. In most cases there is a cap on the maximum compensatory award. To 5 April 2017 the maximum is just under £79,000. However, there are instances were the cap will not apply.

Employment Tribunal Annual Tables for 2014/15, below, indicate median and average compensation awards.

 

AwardMaximumMedianAverage
Unfair Dismissal£238,216£6,955£12,362
Source: Employment Tribunal Annual Tables 2014/15

 

If you consider legal costs and tribunal fees, you might conclude that if you are low-paid, it is not worthwhile pursuing a claim. However, if you are highly paid, and the circumstances are identical, it may be worth pursuing a claim.

Evidence of for example immediate and future losses and steps taken to mitigate are required to support your claim, we are able to advise you on what you need.

Reductions to compensation

We can tell you before you make a claim to the Employment Tribunal if your compensation may be subject to a reduction. A compensation award may be reduced for certain reasons, including any contributory fault of the employee.

Where an employer has failed to follow a fair procedure when dismissing an employee and this results in a dismissal being found to be unfair, the Tribunal may reduce the amount of compensation. This is to reflect the fact that had the employer followed a fair procedure, the decision to dismiss would be unchanged. This does not mean that the dismissal was fair.

Constructive dismissal analysis

Comparison of unfair dismissal with constructive dismissal

Employees often want to resign and claim the unfair treatment they received forced them to resign – this is known as constructive dismissal. Constructive dismissal claims can be more challenging to prove than claims for unfair dismissal. Once you have resigned you will not be paid and will often be forced in to bringing a claim in an Employment Tribunal.  Any litigation, including employment law litigation in an Employment Tribunal, is risky and potentially expensive.  We always recommend you speak to us before resigning and claiming constructive dismissal.

Constructive dismissal overview

You may be able to claim constructive dismissal if you resign in a situation where you are entitled to terminate the employment as a result of the employer’s conduct.  You may then be able to claim that the employer acted unfairly and fall within the entitlements afforded to unfair dismissal.

Establishing a constructive dismissal claim

To establish a constructive dismissal, the employee must prove that:

  • There was a breach of a term of the employment contract by the employer (examples are below);
  • The breach was sufficiently serious to justify their resignation;
  • The employee resigned in response to the breach; and
  • The employee did not “affirm” the employment contract following the breach (for example, by delaying too long in resigning).

 1. Repudiatory breach

A repudiatory breach is where the employee claims that the employer, through its actions, has terminated the employment contract unlawfully.  What amounts to a repudiatory breach is often uncertain. It is often a question of fact and degree and often the facts of the case are in dispute. In each case it will be a matter of evaluating the evidence in light of its context including the contractual term that it is alleged has been broken. We look at the effect that the breach has on the employee concerned.

2. Breach of an express term of the employment contract

A breach of an express term in the contract of employment could amount to a constructive dismissal, such as a reduction in pay. A fundamental change in the nature of the job will amount to repudiation if there is no term allowing the employer to make such a change.

3. Breach of an implied term of the employment contract

A major breach of an implied term by the employer will entitle the employee to treat himself as constructively dismissed. There is a duty of mutual trust and confidence implied into the contract of employment.

Under the “last straw” doctrine, an employee can resign in response to a series of breaches of contract or a course of conduct by their employer which, taken cumulatively, amounts to a breach of the implied term of trust and confidence. Earlier breaches are reactivated. This doctrine is complicated by the issue of whether the employee has waived the earlier breaches by continuing to work for the employer.

Waiver of breach of an employment contract

Any delay from the employee resigning from their job and claiming constructive dismissal can be used by the employer as evidence that the employee has elected to affirm the employment contract and waived the breach. However, there is case law to suggest that delay is not always fatal to a claim of constructive dismissal. Each case will depend on its facts.

Damages following either an unfair dismissal or constructive dismissal

An employee who is constructively dismissed will be entitled to damages for breach of contract. Employees will be expected to mitigate their loss and any money they do earn during the period equivalent to their notice period will reduce their damages.

An employee who is constructively dismissed will also be entitled to compensation for unfair dismissal if they fulfil the eligibility requirements to bring a claim for unfair dismissal and the Employment Tribunal finds that the constructive dismissal was unfair.

Unfair dismissal recent track record

The costs levied by Employment Tribunals and our legal costs mean that it is usually not in your best interests to take your employer to a full trial at an Employment Tribunal.  Virtually all of our cases settle outside of the Employment Tribunal which is a sign of our effectiveness and attention to practicalities. Examples of our recent successes include:

  • Advising a software developer placed on a performance plan following a heart attack – dealing with the impact of disability.
  • The settlement of an unfair selection for redundancy where cronies of the employer were not considered for redundancy.
  • Drafting a robust grievance to defend our client’s dismissal planned unfairly to avoid the payment of an annual bonus.

If you are facing dismissal it can be difficult to work out if it is fair or not – we can guide you. We find employers often know when they are trying it on or soon become aware once we are in the background. In many cases a robust response achieves settlement of an unfair dismissal dispute.  We will always consider alternatives to litigation and seek out ways to resolve problems in a practical fashion.

Click to read a recent case study where we were successful in an unfair dismissal claim for a city trader