With the rise of the compensatory limit from £12,000 to £50,000 for dismissals on or after 25 October 1999, potential liability for unfair dismissal has become a serious business issue for many employers. So it is vital that all employers are familiar with the concept of what constitutes a fair dismissal, and how to go about it.
To defend a claim of unfair dismissal, an employer will need to show two things - that it had a fair reason for the dismissal, and that it adopted a fair procedure and acted reasonably in treating the fair reason as a sufficient reason for dismissing the employee.
There is, of course, a huge amount of case law on what these statutory provisions mean in particular circumstances. However, it is worthwhile bearing in mind the above two-stage defence is effectively required to resist each unfair dismissal claim and it is for the employer to demonstrate on the balance of probabilities that it has met these requirements.
The fair reasons adopted in the statute are conduct, capability, redundancy, contravening a statutory duty and "some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held". This fifth, residual category - SOSR - will increasingly become a battleground for more unfair dismissal cases as unfair dismissal litigation increases due to the size of the potential awards.
All kinds of reasons have been used to justify a dismissal for SOSR. The most typical scenarios include business restructurings not involving redundancies, third party pressure to dismiss an employee and unacceptable behaviour reflecting upon the employer. In each case, there is a duty on the employer to show that dismissal was effectively the last resort, having consulted thoroughly with all the relevant individuals, and having conducted a reasonable investigation into the situation and all alternative solutions.
One obvious alternative solution will usually be redeployment within the organisation - if it is possible, the dismissal may not be fair. Perhaps more than any other four fair reasons, the SOSR category blurs the distinction between the two stages of the defence above. Some tribunals have distinctly signalled that if sufficient thought has not been given to alternative solutions for the difficulty and/or an insufficient investigation and consultation pr