Dismissing an employee can be rough, especially the first time around. It is really important that you do it correctly and ensure that you are in the right by dismissing them in the first place. Failing to follow the correct protocol could land you in hot water – something no small business needs is a dismissal claim made against them.

Three Types of Dismissal

There are three types which fall under the dismissal umbrella: wrongful, unfair and constructive. They all differ from one another, but all have the potential to cost your business money and damage your reputation.

Wrongful Dismissal

If you are found to have breached an employee’s contract, you could be sued for wrongful dismissal. An example of this might be terminating the employees’ contract without giving them the agreed notice period.

Any breach of an employee’s contract by you or your company during a termination process lays the groundwork for them to pursue a wrongful dismissal claim against you and your business.

In order for an ex-employee to successfully claim for wrongful dismissal they must prove beyond doubt that their contract was breached and provide evidence of losses incurred as a result.

Legal advice should be sought by employers whose ex-employee is attempting to claim for wrongful dismissal, since contracts of employment can be complex, and simply misreading a clause could end up costing you thousands.

Unfair Dismissal

As it sounds, unfair dismissal refers to terminating an employment contract without a fair and justified reason. Unlike wrongful dismissals, unfair dismissals are those which breach an employee’s statutory rights rather than their contractual rights.

Examples of justified reasons for dismissal might be:

  • Poor conduct in the workplace
  • Incapability to carry out contractual obligations
  • Long term illness which prevents the employee from doing their job

If you feel like you need to dismiss an employee for one of the above examples, you must remember to follow the disciplinary process outlined in their employment contract. Failure to do so will enable the employee to initiate a claim for unfair dismissal, even though the initial reason for their dismissal was legitimate.

Under certain circumstances a dismissal will be classed as ‘automatically unfair’.

Some examples of reasons for dismissal which would be classed as automatically unfair are:

  • The employee is pregnant or on maternity leave
  • They raised concerns over a health and safety issue
  • They asserted their statutory/legal rights, such as being paid minimum wage

Constructive Dismissal

A constructive dismissal claim differs from the above two types of dismissal because it can only be made upon the employee’s resignation, rather than you – the employer – dismissing them.

If an employee believes that you have treated them unfairly to the point that they had no other choice left than to resign, then it is possible that they may attempt to start a constructive dismissal claim against you.

Examples of constructive dismissal might be if the employer:

  • Changes the working hours or duties of an employee with the deliberate intention of forcing them to resign
  • Changes the terms of contract without the consent of the employee
  • Demotes an employee without reason
  • Reduces working hours without justification

As with wrongful dismissal claims, a successful constructive dismissal claim must consist of proof of an employer’s breach of contract.

Constructive dismissal claims will only be successful if there is proof that the employee has followed the correct grievance procedure as outlined in their contract. If they do not do this, it is less likely that they would be able to claim for constructive dismissal since they are not resigning as a last resort.

If the employee continues to work for you after a breach of contract on your part then this is known as ‘affirming the breach’, which stops them from pursuing a constructive dismissal claim.

Employer’s Rights

Like employees, as an employer you have rights too. It is always a good idea to seek legal advice as soon as you catch wind that an ex-employee is looking to make a claim for wrongful, unfair or constructive dismissal against you. Even if their claim is unsuccessful, if it goes to court then that could cost you your reputation as well as money: you could avoid this by seeking the advice of expert employment solicitors.