Firing Employees Lawfully in the UK

​Firing employees is a necessary part of running a company in the U.K., but it's important to do it in accordance with the law. There are certain things to keep in mind when navigating the process of lawfully firing an employee. 

"The key thing employers need to pay attention to is how much service the employee has, because if they have over two years of service, then they have unfair dismissal protection," said Laura Kings, legal director at Clyde & Co LLP in London.

If an employee has under two years of service, employers still need to pay attention to whether there may be a risk that the employee is a whistleblower. Additionally, it's never lawful to fire someone for discriminatory reasons, regardless of the length of their service.

"An example of that would be if a woman is dismissed because she is pregnant, then that woman would not need two years of service to be able to argue that her dismissal was unfair," said Emma O'Connor, director and head of HR training at Boyes Turner in Reading.

Appropriate Reasons for Firing

According to the Employment Rights Act 1996, there are five reasons that are appropriate for firing an employee:

• Capability—an employee not having the qualifications for their job.
• Conduct.
• Redundancy or layoff.
• A duty or restriction imposed by a law—for example, limitations in place due to immigration law.
• A catch-all category that allows for some other substantial reason. 

If redundancy is the reason for dismissal, there's an added layer of scrutiny required.

"If an employee's role is no longer required, employers should carry out a redundancy consultation, particularly if the employee has more than two years of service," Kings said.

With small-scale redundancies—less than 20 employees—this would usually involve explaining to the employees that their role is at risk of redundancy and then consulting with the employees to explain why they are being made redundant, how they were selected and discussing alternatives to the redundancy—including, for example, alternate roles that are available.

"If there are 20 or more employees being made redundant, collective consultation is required, which is a more prescriptive process," Kings said. This is necessary to make sure that redundancy is the real reason for dismissal.

Follow a Fair Process

It's important to follow a fair process with dismissals to avoid employees bringing unfair dismissal claims. There are two kinds of awards that can be given as compensation to wrongfully dismissed employees: a basic award, which is based on years of service and has a cap, and a compensatory award, which is calculated based on how long the tribunal decides it would take the worker to find a similar job. There are no statutory caps for employees who were dismissed for whistleblowing or who were discriminated against.

Employees should be made aware of why they are being fired and understand the reasons for the dismissal, legal experts say.

"If, for example, it's due to their conduct, employers should go through an appropriate disciplinary process. Employees should ensure the employer has listened and taken into account their version of events and side of the story," Kings said. "For employees, understanding why they are being dismissed and engaging in any process is important. If the employer isn't following a fair or appropriate process or doesn't have a fair reason for the dismissal, then the employee should consider their protections under law—including the right not to be unfairly dismissed."

Companies should make sure they are training managers in the skills they need to follow the proper processes for firing an employee.

Ultimately, it's important to make sure the reasons for firing are clear and appropriate and don't violate anti-discrimination laws.

"Be very clear on the reason why you are making the decision. … Does it fall within those five potentially fair reasons to dismiss an employee under statutory unfair dismissal laws? Don't use a reason to mask another issue that may be going on, and don't use a scattergun approach," O'Connor said.

Katie Nadworny is a freelance writer in Istanbul.