Employees must have two years’ service continuous service with an employer to bring a claim.
Many clients are concerned about taking action against an employee because of the risk of a claim but employees must have the requisite service to take a case to tribunal.
Employees who have a right to bring a claim must then be able to establish that a two limb test has not been satisfied by the employer. The first limb relates to the five fair reasons for dismissal listed under the Employment Rights Act, these are: capability, conduct, redundancy, statutory illegality and ‘some other substantial reason’ a difficult and catch-all criterion. If an employee has not been dismissed for one of these reasons, their dismissal will be deemed unfair.
The second limb relates to the employer’s conduct and whether the employee’s dismissal was fair and reasonable in the circumstances, taking into consideration the size and resources of the employer. The tribunal will establish whether a fair procedure was followed and whether the decision to dismiss fell within a band of reasonable responses available to the employer.
If either of these limbs fails, the dismissal will be found unfair. So even if a potentially fair reason is established; the first limb e.g. conduct, a dismissal will still be unfair if it fails the second limb; e.g. a fair procedure was not followed or the response was not reasonable in the circumstances.
The basic award for unfair dismissal is capped at £14,670. The award is calculated using age, length of service and salary in a similar way to redundancy pay. The award is there to compensate for loss of job security. A compensatory award is awarded in addition to the basic award and this reflects immediate and future loss of earnings. This is also capped but the limit is £80,541. When looking at the figure to be awarded tribunals will consider; net loss suffered to the date of the hearing and ‘future loss,’ the estimated loss after the hearing. They will also take into account issues such as the employee’s personal circumstances, the economy, and local labour markets. Any loss of statutory rights and pension rights are also examined.
Protecting against a successful and potentially costly claim of unfair dismissal is now more important with the removal of tribunal fees but employers should not be fearful of taking appropriate action if the circumstances require it. Having a fair reason for dismissal, following good employment procedures, acting reasonably considering the circumstances and being within the band of reasonable responses available to you as an employer should prove an appropriate safeguard.
For more information or advice on unfair dismissal and good employee relations practice contact Halcyon HR Consulting Ltd.