CHAPTER 13 Unfair dismissal (2): Potentially fair reasons and the concept of reasonableness

Unfair dismissal (2): Potentially fair reasons and reasonableness Overview After an employee has established that they are qualified to make a claim, the burden is on the employer to show the reason for dismissal. Some reasons are automatically unfair and others are fair or potentially fair. It is necessary to understand the potentially fair reasons of capability or qualifications, conduct, redundancy, retirement, statutory ban and ‘some other substantial reason’.

Unfair dismissal (2): Potentially fair reasons and reasonableness There are particular rules that apply to dismissals during industrial action. It is also necessary to look at the ACAS Code of Practice on Disciplinary and Grievance Procedures 2009.

Potentially fair reasons for dismissal Unfair dismissal (2): Potentially fair reasons and reasonableness Potentially fair reasons for dismissal Once employees have proved that they were dismissed, the burden shifts to the employer, who must show the reason for the dismissal was admissible if it is not to be unfair.

Unfair dismissal (2): Potentially fair reasons and reasonableness The employer must demonstrate that the reason for the dismissal relates to capability or qualifications, conduct, redundancy, retirement, a statutory ban or ‘some other substantial reason’ of a kind to justify the dismissal. Where no reason is given by the employer, a dismissal will be unfair simply because the statutory burden has not been discharged.

Automatically unfair reasons for dismissal Unfair dismissal (2): Potentially fair reasons and reasonableness Automatically unfair reasons for dismissal There are certain reasons which are automatically unfair, such as those relating to trade union membership or activities or to pregnancy and maternity.

Unfair dismissal (2): Potentially fair reasons and reasonableness Redundancy dismissals will also be automatically unfair if selection was based on any of the inadmissible criteria. Other statutes may offer protection against unfair dismissal – for example anti-discrimination provisions.

Unfair dismissal (2): Potentially fair reasons and reasonableness Section 238A TULRCA states that a dismissal will be unfair if the reason is that the employee took part in protected industrial action. However, employees cannot claim unfair dismissal if they are dismissed while taking part in unofficial industrial action.

Capability and qualifications Unfair dismissal (2): Potentially fair reasons and reasonableness Capability and qualifications According to section 98(3) ERA 1996, ‘capability’ is to be assessed by reference to ‘skill, aptitude, health or any other physical or mental quality’, and it has been held that an employee’s inflexibility or lack of adaptability come within his or her aptitude and mental qualities.

Unfair dismissal (2): Potentially fair reasons and reasonableness ‘Qualifications’ means ‘any degree, diploma, or other academic, technical or professional qualification relevant to the position which the employee held’.

Conduct and misconduct Unfair dismissal (2): Potentially fair reasons and reasonableness Conduct and misconduct Misconduct is a potentially fair reason for dismissal, but the employment tribunal will decide whether dismissal was a reasonable course of action, taking into account all the circumstances.

Unfair dismissal (2): Potentially fair reasons and reasonableness It is not the function of tribunals to decide whether misconduct is gross or criminal but whether the employer has, in the circumstances of the case, acted reasonably in dismissing. There is no necessary inference that because an employee is guilty of gross misconduct in relation to his or her actual employment, he or she must necessarily be considered unsuitable for any employment whatsoever.

Employers must clarify what conduct leads to summary dismissal. Unfair dismissal (2): Potentially fair reasons and reasonableness Clearly, there will be cases where the misconduct is sufficiently serious that an employee can be dismissed without warning. Employers must clarify what conduct leads to summary dismissal.

Some other substantial reason for dismissal Unfair dismissal (2): Potentially fair reasons and reasonableness Some other substantial reason for dismissal Section 98(1)(b) ERA 1996 was included in the legislative scheme so as to give tribunals the discretion to accept as a fair reason for dismissal something that has not been defined by statute.

It covers such diverse matters as: Unfair dismissal (2): Potentially fair reasons and reasonableness It covers such diverse matters as: dismissal for having been sentenced to imprisonment the loss of confidence in a manager because of his manner and management style being dismissed as manager of a public house because a partner has resigned from jointly holding the position

dismissal for refusing to sign an undertaking not to compete Unfair dismissal (2): Potentially fair reasons and reasonableness dismissal for refusing to sign an undertaking not to compete dismissal because the employer’s best customer was unwilling to accept the particular individual dismissal arising out of the reorganisation of a business.

The duty on the employer to act reasonably Unfair dismissal (2): Potentially fair reasons and reasonableness The duty on the employer to act reasonably An employer must act reasonably in treating a reason as sufficient for dismissal.

Unfair dismissal (2): Potentially fair reasons and reasonableness Where the employer has given a valid reason for dismissal (other than retirement), whether the dismissal was fair or unfair depends on whether in the circumstances the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee, and will be determined by the tribunal in accordance with equity and the substantial merits of the case.

Unfair dismissal (2): Potentially fair reasons and reasonableness As a matter of law, a reason cannot be treated as sufficient where it has not been established as true or there were reasonable grounds on which the employer could have concluded that it was true.

Unfair dismissal (2): Potentially fair reasons and reasonableness The Code of Practice In considering whether a reason is sufficient for dismissal, the employer should be guided by the ACAS Code of Practice. It must also follow its own contractual procedures.

Unfair dismissal (2): Potentially fair reasons and reasonableness The ACAS Code of Practice on Disciplinary and Grievance Procedures 2009 does not have the force of law, so failure to comply with it does not make a dismissal automatically unfair. However, it will weigh heavily against the employer if not followed, and tribunals will be able to adjust any awards made in relevant cases by up to 25% for unreasonable failure to comply with any provision of the Code.

Unfair dismissal (2): Potentially fair reasons and reasonableness In addition, ACAS has produced a draft guide to good practice which complements its code.