What is Unfair Dismissal?
Employees have a right not to be unfairly dismissed.
There are a number of circumstances in which an employee may complain they have been unfairly dismissed. This could be because they consider the specific reason for the dismissal is not a fair reason or because they consider that their employer has not followed a fair procedure in reaching its decision to dismiss them.
In either circumstance, the employee may be entitled to remedies including reinstatement, reengagement, and compensation. In the case of compensation, this will usually consist of a ‘basic award’ (calculated in a similar manner to a statutory redundancy payment – taking account of age, length of service, and the amount of a week’s pay) and a ‘compensatory award’ (which takes account of the financial loss caused to the employee as a result of the employer’s actions).
Current position
Although there are some circumstances in which an employee may bring a claim for unfair dismissal from day one of employment, ordinarily, an employee will need to have worked for their employer for at least two years to obtain that right.
In practice this means that employers do not have to be as careful when they are considering dismissing someone who has been an employee for less than two years. Employees with less than two years’ service are more vulnerable to being dismissed for arbitrary reasons and without ordinary policies being adhered to.
Employees have a right to request written reasons for dismissal. However, in most cases, the need for two years’ service similarly applies.
What will change?
The Employment Rights Act (‘ERA’) will reduce the required length of service that employees have before they are entitled to bring a claim for ‘ordinary’ unfair dismissal or request written reasons for dismissal from two years to six months.
A ‘statutory probation period’ will be introduced, after which the employee will be entitled to written reasons for dismissal on request. Prior to entering into consultation on the point, the government has expressed a preference that the statutory probation period last 9 months and has expressed that, during this period there will be a ‘…a less onerous process with lighter touch standard…’ which will allow employers to ‘…more easily dismiss someone who is not right for the job…’.
Details of the compensatory award regime for dismissals during the statutory probation period may become clearer during proposed government consultation on the matter.
What does this mean?
This is a significant change for employees and employers.
Employees will be afforded greater protection against dismissal from their first day of employment.
In order to reduce the risks of litigation, employers will need to review their policies and ensure that they have followed due process before dismissing any employee, even those for whom it becomes apparent very early on that they are not suitable for the role. Accordingly, we may see employers implementing more robust recruitment processes to improve the chances of any issues being identified before an individual is hired.
With the two years’ service requirement currently filtering out many claims that may otherwise have been brought, it is likely that we will see an increase in the number of complaints being brought in the Employment Tribunal.
It may be advisable for employers to consider any contractual probationary periods in place and performance review during this time.
If you would like to discuss anything related to unfair dismissal or indeed anything else affected by The Employment Rights Act, please contact a member of the Employment team.
To find out what other aspects of employment law are affected by the Employment Rights Act, read our blog “The Employment Rights Act – When to expect change”.
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