Once the employment tribunal has established you can bring a claim it must go on to decide if your dismissal was fair or unfair. It will decide this using a two stage test.
It is for the EMPLOYER to show what was the reason (or, if there was more than one, the principal reason) for the dismissal and that it was one of five potentially ‘fair reasons’ set out in Section 98 (2) of the Employment Rights Act 1996 (‘ERA 1996’).
Next, the employment tribunal must then decide whether in all the circumstances the employer acted reasonably in treating the given reason (or reasons) as sufficient to justify the dismissal.
Stage 1 | The reason for the dismissal
Your employer can rely on one or more five potentially fair reasons for your dismissal. These are:
- Your conduct,
- Your capability by reference to your skill, aptitude, health or any other physical or mental quality,
- Your redundancy,
- Your breach of a statutory restriction, ie where your continued employment would contravene a duty or restriction imposed by law;
- ‘some other substantial reason’ of a kind such as to justify your dismissal (this is catch all category).
Stage 1 | Legal issues
The employment tribunal will look to your employer to show the reason for your dismissal and that the reason falls within one (or more) of the potentially fair reasons. In other words your employer has the ‘burden of proof’. The following principals apply to this stage 1 test:
- Your employer can rely on one or more of the potentially fair reasons for your dismissal.
- It is normally difficult for your employer to argue successfully that the reason for your dismissal was different to the reason given to you at the time of your dismissal.
- Your employer can only rely upon facts it knew at the time of your dismissal to establish the reason for your dismissal.
- The employment tribunal will investigate the real reason(s) for your dismissal relied upon by your employer.
- If your employer can’t establish the reason(s) relied upon for your dismissal was for a potentially fair reason your dismissal will be automatically unfair and there will be no need to deal with the Stage 2 test.
Stage 2 | Fairness in the circumstances
It is not enough for your employer to simply show the reason for your dismissal was a potentially fair reason. The employment tribunal must decide if, in the circumstances, the decision to dismiss you was fair taking into account the reason for your dismissal.
The employment tribunal has to apply the statutory test of fairness as set out Section 98 (4) of the Employment Rights Act 1996. This provides:
“the determination of the question whether the dismissal is fair or unfair (having regard to the reason shown by the employer) –
(a) depends on whether in the circumstances (including the size and administration resources of the employer’s undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee; and
(b) that question shall be determined in accordance with equity and the substantial merits of the case.”
Stage 2 | Legal issues
- This time nobody has the burden of proof. It is neutral.
- The tribunal must consider whether your employer acted reasonably or unreasonably in treating the reason for your dismissal as a sufficient reason to dismiss you.
- If the reason or part of the reason was not sufficient your dismissal will be unfair.
- The size and administrative resources of your employer’s business or organisation will be taken into account by the employment tribunal when deciding whether the decision to dismiss was fair or unfair.
- The law recognises that different employers may reasonably react in different ways to the same situation (including not dismissing!). The employment tribunal will ask whether your employer’s decision to dismiss fell within a ‘band of reasonable responses’ which a reasonable employer could adopt. If it considers other employers in the same situation would have dismissed your dismissal will be fair.
- The employment tribunal must not ask whether your employer did the right thing.
- An employment tribunal must not substitute its own decision for your employers.
- If your employer’s decision to dismiss you was inconsistent compared with how other employees were treated in the same or similar circumstances your dismissal may well be unfair (this is an example of a dismissal not being equitable).