Unfair Dismissal and Redundancy - Outline Example

?Unfair Dismissal Definition As discerned from the Employment Rights Act 1996 (ERA), a dismissal is fair if it fulfils these two conditions; the reason for dismissal is fair and the process of dismissal is fair and reasonable. Thus, unfair dismissal is the termination of an employee’s contract by an employer based on unjustifiable reasons and through an unfair and unreasonable process. Definition of an ‘employee’ One of the most significant considerations in the fairness of a dismissal is the legal definition of an employee. An employee is one who has entered into, or works under a contract of employment. The law also requires sufficiency of service as proof of being an employee; one must have worked continuously for over a year to qualify as an employee. Thus, this definition leaves out workers and the self employed. Definition of ‘dismissal’ The next aspect that needs definition is dismissal itself, with the importance of defining the term exemplified by the Futty v D & D Brekkes 1974. Legally, a dismissal takes place on three occasions; first, when the employer terminates employment with or without notice; secondly, when the employee resigns with or without notice and where the employer constructively dismisses them; and lastly, when the employer does not renew a fixed term contract. Hence, independent resignation, mutual contractual termination and operation of law in termination do not qualify as dismissals under the law. Fair Reasons for Dismissal The s.98 of the Employment Rights Act (ERA) 1996 maintains that an employer must prove fair grounds of dismissal based on five categories: The first ground for fair dismissal is the lack of capabilities or qualifications in execution of tasks and responsibilities. Of note is the legal definition of capability and qualifications where: capability refers to an employee’s “skill, aptitude, health or other physical or mental quality”; and qualification refers to “any degree, diploma, or other academic, technical or professional qualification relevant to the position which the employee held” (s.98 Employment Rights Act (ERA) 1996). Misconduct is another ground upon which the employer argues the fairness of a dismissal. The triviality/seriousness of the said misconduct is of importance in this case as only gross misconduct can qualify fairness of dismissal. This includes drug abuse, disclosure of confidential information, theft, violence, unauthorised absence and breach of contract among others. Redundancy is also a ground for fair dismissal when conducted in a fair manner. The recent global financial crisis places much focus on redundancy; hence, the issue is detailed later as an independent topic. The fourth reason upon which the fairness of a dismissal rests is statutory restriction, where the employer would be in contravention of a statutory provision if the employment continues. The considerations for this ground include situations where a breach of immigration rules may occur, loss of a driving license and presence of a criminal record among others. The fairness of a dismissal may also be argued based on “some other substantial reason” (s.98 Employment Rights Act (ERA) 1996) due to the impossibility of capturing all grounds under the law. Here, examples include conflict of personalities and relationship breakdowns, resistance to necessary changes in employment terms and legitimate commercial reasons among others. A valuable consideration which arises here is the reasonableness of the dismissal, where the law expects the employer to act reasonably at all times. Automatically Unfair Dismissals Certain circumstances qualify a dismissal as unfair without question according to the law. These include unlawful discrimination; for having asserted a statutory right; when an employee raises issues of health and safety; whistle-blowing; trade union activities/membership; pregnancy, maternity or childbirth; working time regulations; National Minimum Wage; and information and consultation rights. Redundancy The recent global financial downturn saw many employees around the world dismissed on one particular ground; redundancy. According to s.139 Employment Rights Act (ERA) 1996, reasons for redundancy involve situations where the dismissal is wholly or mainly attributed to; cessation or intent of cessation of carrying on the business for which the employer contracted the employee; cessation due to workplace closure; and reduced requirement for employees due to diminishing work. Several considerations arise in determining whether a dismissal is redundant, including the temporary cessation, change of business, transfer of business, place of work, changes in terms and conditions, mobility clauses and diminished requirements of a particular kind of employees. Once redundancy proves as defined in the law, the employees should receive their appropriate entitlements including the statutory redundancy payment (SRP) for employees with over two years of service, capped at ?400 per week and ?12,000 maximum payment depending on age. Other entitlements include any contractual entitlements, the right for paid time off to attend interviews during the notice period and compensation when the redundancy is unfair. Reasonableness in Dismissal based on Redundancy s. 98 Employment Rights Act (ERA) 1996 provides that a redundancy dismissal must be reasonable taking into consideration the employer’s size and resources. The considerations to determine the fairness of the redundancy dismissal include forewarning the employees or their representatives of the impending redundancy, fair selection, and consideration of alternative employment. Considerations in Redundancy Dismissal First, the employer must allow for consultations, undertaken properly and at an appropriate stage. Open-mindedness and meaningfulness should be encouraged at all times during such consultations before arriving at decisions. Selection of individuals to be dismissed is another significant consideration, involving identifying the correct pool and the selection criteria followed. Considerations for the pool include the work that is disappearing, the employees doing that work, interchangeability and agreement with trade unions. The selection criteria include performance and ability, attendance records, length of service and disciplinary records. The criteria should be objective rather than subjective. The criteria should then be fairly applied. Discriminatory criteria include sex, fixed term contracts, part time status, racial backgrounds, sexual orientation, and issues of disability and religious background which amount to unfair and unlawful discrimination. In terms of alternative employment, the law does not oblige the employer to create it for redundant employees but to take reasonable steps to look for alternative employment, including where relevant within other group companies. This should continue during any notice period. A number of alternative to redundancy exist, including voluntary redundancies, early retirement, part-time working or flexible working, sabbaticals or time off for other training, short time working or lay off. The last consideration is when the redundancy is collective (involving 20 or more employees within 90 days). Collective consultation should be undertaken to discuss how to avoid dismissals, how to reduce the number of employees affected and mitigation of the consequences of the dismissal. Reference The National Archives 2011, Employment Rights Act 1996, viewed 11 January 2004, . Read More