Ending employment

How to go about ending an employment for someone that works for you.

There are four main potentially fair reasons for terminating employment: 

• capability 
• conduct 
• redundancy 
• some other substantial reason. 

An employee may also be fairly dismissed for illegality, where to continue their employment would place the employer in breach of a legal requirement. For example, if their entitlement to work in the UK had expired. 

The protection from general unfair dismissal applies to employees with two or more years of continuous service. If an employee has one year and 51 weeks’ service, they’ll have qualifying service to bring a claim for general unfair dismissal. This is because the required one week of statutory notice must be added to the employee’s actual service to determine length of service for these purposes, even if employment is ended without notice. 

There are some exceptions when this length of service is not required for an employee to be able to claim unfair dismissal. This includes dismissals for reasons connected to pregnancy or childbirth, health and safety activities, whistleblowing, exercising various time off rights, asserting a statutory right or the employee’s political opinions or affiliation. 

In all cases, follow a fair procedure before deciding to terminate employment. 

Notice periods 

The requirement to give notice should be set out clearly in the contract of employment. Failure to give an employee this required notice when terminating their employment is likely to constitute a breach of contract. The notice set out in the contract is subject to the legal obligation on the employer and the employee to comply with the statutory minimum notice periods. Where the statutory minimum notice period is longer than the notice period provided for in the contract of employment, the statutory minimum applies.  Information on notice periods is available on the government website.  

Conduct and capability 

In cases about conduct, a fair procedure involves following a disciplinary procedure. In cases about capability, where the issue is poor performance, you should also follow a fair procedure. If a capability issue is about ill health, it’ll normally be necessary to have an up-to-date medical report providing information about the employee’s state of health and their likely prognosis. A medical report can only be obtained with the employee’s express written consent. If the employee has a disability, consider reasonable adjustments before making a decision to terminate employment. Dismissal of an employee with a disability without making adjustments that could reasonably have been put in place to make sure they can return to work is discriminatory and unfair dismissal. 

Redundancy 

The employer has to consult with any employees at risk of redundancy before making any decision about the redundancy of their post. Consultation should be carried out with a view to avoiding redundancy or mitigating its effects wherever possible. Suitable alternative employment should always be sought for an employee who will otherwise be made redundant. If a selection for redundancy needs to be made between employees, then the selection criteria should be discussed with employees beforehand as part of the consultation, must be non-discriminatory and should be applied as objectively as possible. For further information about conducting a fair redundancy process see the ACAS Guidance on redundancies. 

Employees with over two years’ service are eligible for a statutory redundancy payment. Details of this entitlement can be found on the GOV.UK website, along with a payment calculator. 

If the reason for redundancy is that the work undertaken or the funding for it is moving to another organisation, the employee’s employment might transfer to that organisation under the Transfer of Undertakings (Protection of Employment) Regulations 2006 rather than being made redundant. Legal advice should always be sought in these circumstances. 

Some other substantial reason

Some other substantial reason, or SOSR, only applies in exceptional cases, where it’s impossible for the contract of employment to continue in circumstances and isn’t covered by the other reasons. Examples of SOSR might be if an employee is sent to prison, or where working relationships have completely broken down despite every effort being made to repair them, for example, through formal mediation and other support mechanisms. 

Post-termination issues 

You should ensure that all property is returned to your organisation before the employee’s employment ends. 

If you receive a request for a reference for the departing employee, you’re not legally obliged to give a reference. If you do so, remember you have a duty of care both to the recipient of the reference and to your former employee and the reference should therefore be accurate. Issues that haven’t already been raised with the employee shouldn’t be included in a reference. If references have been provided for other employees, a refusal to provide a particular employee with a reference could be viewed as an act of discrimination or victimisation.