Employment Law

Dismissal Law

Constructive Dismissal
Under UK employment law, if an employer fundamentally breaks an employee's contract of employment in a way that indicates that the employer no longer intends to be bound by the terms, the employee can consider that they were forced to resign – this is called constructive dismissal.

Unfair dismissal
It is possible to validly dismiss an employee under UK employment law provided that the reason is 'fair' and the dismissal was dealt with 'fairly'. One of the most common claims brought by employees against employers in the employment tribunal is for unfair dismissal.

The following is the list of fair reasons for dismissing an employee an employment tribunal will consider:

• Capability – in general terms, an employee may be regarded as incapable of performing the services required under his contract of employment because he does not have the necessary qualifications for the job, or he is incompetent or his health renders him incapable.
• Conduct – many situations can give rise to good reasons for dismissal on conduct grounds; for example, theft, abusive behaviour, absenteeism, taking holidays without consent.
• Redundancy – this will be a fair reason for dismissal providing that the selection methods are fair.
• Breaking the law
• Any other reason – this is a catch all provision and specialist advice should be sought before an employer seeks to rely on this as a fair reason for dismissal.
  

If an unfair dismissal claim is successful in an employment law tribunal the employee may be entitled to compensation for which the maximum award is currently more than £57,000.

Wrongful Dismissal
Wrongful dismissal is where the employee is not in breach of his contract of employment but where the employer decides to terminate the contract of employment by dismissing the employee without notice. The claim by the employee is for damages for breach of contract.

Redundancy

In order to claim a redundancy payment from your employer you must have been "dismissed", and this must have been "by reason of redundancy". In the majority of employment law cases this will be obvious, but sometimes disputes arise as to whether someone has been dismissed or left of their own volition, and if they have been dismissed if this was because they were being made redundant.

Employment law says that an employee is dismissed by reason of redundancy if the dismissal is attributable wholly or mainly to:-

• the fact that his employer has ceased, or intends to cease (i) to carry on the business for the purposes of which the employee was employed by him, or (ii) to carry on that business in the place where the employee was so employed, or
• the fact that the requirements of the business (i) for employees to carry out work of a particular kind, or (ii) for employees to carry out work of a particular kind in the place where the employee was employed by the employer have ceased or diminished or are expected to cease or diminish"

In other words an employee is redundant if the whole business closes down, or if the business continues, but there is no longer a need at that particular place for workers of the employee's kind (note it is the class or type of worker, rather than the individual, who should no longer be required).

Who Qualifies?
In order to qualify for a redundancy payment the dismissed employee must have been continuously employed by the employer for at least 2 years at the date of the dismissal.
However employment law states that there can be some workers excluded from making a claim. These are:-

• People under 20, or past normal retiring age for the post (or, if there is no such age, 65)
• Employee's dismissed for misconduct
• Redundant employees who refuse suitable alternative employment (see below)
• Fixed term contract workers of more than 2 years, who have renounced their redundancy rights
• Share fishermen, people ordinarily working abroad, employees of foreign governments, civil servants and certain public officials.

What am I entitled to?
The procedure for calculating statutory redundancy pay is clearly laid down in employment law, and this is detailed below, but it should not be forgotten that many employers have their own private redundancy schemes which are often much more generous than the statutory scheme.

The statutory scheme calculation is made by reference to the number of completed years service by the employee. They will then receive:

• One and a half week's pay for each year in which the employee was over 41 years of age;
• One week's pay for each year in which they were over 22, but under 41;
• Half a week's pay for each year over 18, but under 22
• The maximum number of years which may be counted is 20
• The employment law statute lays down how "a week's pay" should be calculated (ie what is or is not included), but this is subject to a maximum figure, which is currently only £270 (01/02/04). The current maximum payment is therefore £8,100. Both statutory and non-statutory redundancy payments up to £30,000 are exempt from income tax.

If you are in your last year of working with your employer, or 64 if there is no normal retirement age in your employment, at the time of your redundancy then the amount of compensation is reduced by 1/12th for every month of that last year in which you have worked.

All employee's are entitled to a written statement showing how the amount of their redundancy has been calculated.

What if I do not receive my proper redundancy payment?
If you believe you are entitled to a redundancy payment you should make a claim in writing to your employer or to an Employment Tribunal within 6 months of your redundancy, or your claim may be lost. If you delay beyond this time limit, but make a claim within the next 6 months, the Employment Tribunal can consider your claim, but any award is at the Tribunal's discretion.

What if my employer offers me another job?
In order to overcome a redundancy situation an employer would have to offer an employee "suitable alternative employment". If this is offered and is "unreasonably refused" by the employee then the employee cannot make a claim for a redundancy payment. The question of suitability will depend entirely on the job the employee did before and what is now on offer. Important questions relate to pay, prospects and location, as well as the type of job itself.

Even if the alternative job is deemed to be suitable the employee may still refuse to accept it and claim their redundancy payment, if they can establish that their refusal was reasonable. This relates much more to their own personal circumstances eg health, family commitments, status of the new job.

To help an unsure employee decide whether to accept the new job on offer there is a trial period of 4 weeks in the new job allowed, during which time they can leave and still claim redundancy.

Covenants & Confidentiality

A business needs to protect its rights in confidential matters such as client databases, intellectual property and production techniques.

The business also needs to safeguard against directors, employees and workers setting up in competition with the company using the company's confidential information, its employees or clients.

This can be employment law enforcement of restrictive covenants and the implications arising on breach for a company, director, senior executive or employer.

A breach of the contract of employment by the employer in such as way as to breach a fundamental term of the contract of employment, for example:

• failure to pay wages
• failure to pay a bonus to which the employee is contractually entitled

can be regarded by the employee as a repudiatory breach of contract.

UK employment law now incorporates EU working time regulations and provides protection to employees and workers against long hours.

To find out more about what counts as hours for employers and how some of the rules can be avoided with the consent of the employee or worker click here to find out more...

UK employment law requires that part-time employees are not treated less favourably than comparable full-time employees, unless it is objectively justified.

This means part-timers are entitled, for example, to:

• The same hourly rate of pay
• The same access to company pension schemes
• The same entitlements to annual leave and maternity/parental leave on a pro rata basis
• The same entitlement to contractual sick pay
• No less favourable treatment in access to training

Employees with young children are entitled to request an alteration in their terms and conditions of employment which can include their hours, times when required to work and whether to work at home.

There are circumstances in which the request can be denied by an employer but, caution is required because the employer has to be prepared for a challenge in the employment law tribunal if it fails to comply or fails to give adequate reasons for refusing a request for flexible working.

Employment law dictates that employers have a strong tax capability and seek profess