Termination of Employment
Legislation provides 5 potentially fair reasons for terminating a contract of employment, namely:
1. Conduct
2. Capability (not able to do job for which employed, including through ill-health)
3. Redundancy
4. A statutory ban (e.g. driver unable to do job because licence suspended)
5. Some other substantial reason
Although it is not essential for an employer to give a reason for dismissal it is good practice to do so and employees with appropriate qualifying service can request a reason in writing. To clarify the reason from the outset can only strengthen the employer’s position if subsequently confronted with a claim for unfair dismissal. It is important that the explanation is succinct and confined to the justifiable reasons for dismissal.
If proposing to dismiss a pregnant employee, the employer must give the reason for doing so in writing.
The length of notice terminating an employee’s contract of employment is usually prescribed in the individual contract but where this does not apply then the minimum statutory notice will normally be given. The current minimum statutory requirements are as follows:
Less than 4 weeks service – Nil.
Between 4 weeks and 2 years – 1 week.
Between 2 years and 12 years – 1 week for each full year.
12 years or more – 12 weeks.
Employee to give 1 week.
Where an employee is guilty of gross misconduct there is no entitlement to notice and instant dismissal will normally follow.
In all cases where notice of termination is given, whether by the employer or the employee, the employer can pay wages in lieu of notice provided he has reserved his right to do so in the contract of employment or elsewhere.
If a decision to dismiss is made it is most important that proper procedures are followed, firstly under the Contract of Employment and secondly as required by statute. If there is conflict between the two then, the statutory provisions will prevail. For example the contract cannot lawfully provide for a period of notice less than the minimum periods laid down by statute.
Remember that it can be automatically unfair to dismiss an employee in certain circumstances e.g. where it is related to membership of a Trade Union or the exercise by the employee of statutory rights. Check with The Helpline if in any doubt.
It is important for the employer to act with the utmost good faith, openness and consistency. Consider fairly and reasonably if the circumstances of the particular case justify notice being given.
Firstly, look at the contract. What are its provisions for termination? Would the service of notice give rise to allegations of wrongful or unfair dismissal.
If dismissal action is contemplated as a consequence of the employee’s conduct have the relevant disciplinary procedures been fully and fairly invoked? Have all the proper warnings been given and adequately recorded? Was the employee given the opportunity to be accompanied to disciplinary hearings by a trade union official or colleague of his or her choice? Was he or she advised of right of appeal?
If summary dismissal is contemplated act with extreme caution. Ensure that there is a full investigation and, if necessary, suspend the employee on normal pay until the investigation is complete.
The important thing when contemplating dismissal action arising from a disciplinary offence is to follow the steps indicated in the PBS staff handbooks and its Information Sheets on “Discipline”.
Similarly, if the reason for dismissal is redundancy then follow the policy in the staff handbooks and in the PBS Information Sheet on “Redundancy”.
The Helpline can provide draft letters and other precedents for all cases of termination of employment.
It is important to adopt a fair manner in the way the employment is terminated. To do so in a way that causes unnecessary distress, humiliation, damage to reputation in the community or to family life, might well give rise to an award of compensation. Confidentiality and tact is required.
Where it is the employee giving notice of termination it is important for the employer to consider all the circumstances and act accordingly. There is not likely to be any problem where the employee simply wants to take up another job or leave for family reasons.
However, what if the employee resigns “in the heat of the moment”. The wise employer will leave the matter for a day or two and if appropriate guide the employee into using the grievance procedure. Once an aggrieved employee has left there is a strong possibility of a claim for constructive dismissal assuming they have the relevant qualifying service.
Whether the employment contract is terminated by the employer or by the employee it is important to establish the effective date of termination (EDT) This is sometimes not clear as it can depend on the method used in giving notice (e.g, verbal or by post) but is very relevant for the employer in calculating any outstanding salary and/or accrued holiday pay etc.
Special circumstances arise in cases of summary dismissal for gross misconduct. It is well established that an employee’s knowledge of the summary decision is, in general, an essential element in ascertaining the EDT and the UK Supreme Court has held that the EDT was the date the employee read the letter and not the date it was sent.
The lesson for employers is that whenever possible in summary dismissal cases they should notify the decision verbally at the end of the disciplinary hearing and then simply confirm the decision in writing. To do otherwise might leave the exact EDT in some doubt.
There may be certain situations in which the employment relationship needs to be brought to an end but neither party has a legitimate means of achieving that aim. In such cases and at a cost the parties might agree to bring the relationship to an end with a “compromise agreement” This requires professional advice on both sides and a legally binding contract.
If, despite following all correct procedures the Employer is taken to an Employment Tribunal for unfair dismissal then to successfully defend proceedings it must be shown that the dismissal was reasonable. Even if the Tribunal would have come to a different decision on the evidence than did the Employer, provided the latter’s decision was “within the range of reasonable responses” it will be accepted by the Tribunal. If a fair dismissal procedure was not followed it is for the employer to show that it would have dismissed anyway.
Where a tribunal claim seems likely it might be suitable for pre-claim conciliation. This is a free service provided by
All PBS Information Sheets are designed to provide the detail you need to implement best business and employment practices. They are not a detailed commentary on the current law and where advice is needed in a specific case you should contact PBS for expert consultation.