Once the company has established the reason for the employee's dismissal and that it has complied with the minimum dismissal procedure, the focus moves to the central question of whether the company acted reasonably in all the circumstances in treating the reason for dismissal as a sufficient reason for dismissing the employee. The legislation gives little guidance on what an employer must do to act reasonably. It simply states that the question of whether the dismissal was fair or unfair must be decided in the light of 'equity' (that is, general principles of fairness) and the merits of the case.
The previous decisions of employment tribunals and the higher courts are therefore the main source of guidance on the steps that companies should take in order to ensure that they have acted reasonably.
An important general principle that emerges from this case law is that employers must follow a fair procedure before deciding to dismiss. The steps that may be involved in a fair procedure are summarised below in relation to each category of dismissal, though many of these situations are covered in more detail in other sections of this Guide.
A company that does not follow a fair procedure will usually be found to have unfairly dismissed the employee. The dismissal will be fair only if the company has complied with the minimum dismissal procedure and can show that it would have decided to dismiss the employee even if it had followed a more extensive procedure. It is difficult, however, to anticipate when this exception might apply, indicating that it is inadvisable to rely on it. A company that is considering dismissing an employee without implementing a fair procedure should contact its Association for advice.
Although the legislation does not lay down detailed rules on what a company needs to do in order to act reasonably, it does specify that the size and administrative resource of the company's business should be taken into account. This means, for example, that a small employer without a separate personnel function might act reasonably in dismissing an employee for misconduct even if it followed only the basics of a fair disciplinary procedure before deciding to dismiss, whereas a larger company might be expected to follow a more extensive procedure.
The legislation also expressly states that no account can be taken of any pressure that was brought to bear on the company to dismiss the employee by industrial action, or the threat of it.
It is important to bear in mind when considering the broad guidance set out below that there might be more than one reasonable way of dealing with a case. One employer might decide to dismiss an employee for a particular act of misconduct where another would have issued a final written warning; one company might decide to dismiss an employee for poor performance when another would have given the employee a further opportunity to improve. A dismissal is unfair only if no employer acting reasonably would have decided to dismiss.
The focus is, however, on the conduct of the company, not the injustice suffered by the employee. If the company has not acted reasonably, the employee's dismissal will be unfair, even if it could be said that the employee in some sense 'deserved' to be dismissed. However, if the employee contributed in some way to his or her own dismissal, then the employment tribunal that hears his or her unfair dismissal claim is likely to reflect that by reducing any compensation it awards for unfair dismissal.
The reasonableness of an employer's actions is assessed in the light of the circumstances that existed up to the day on which the employee's employment ended. Therefore, if an employee is dismissed with notice, it is advisable for a company to take into account any facts that come to light during the notice period and, if appropriate, to review its decision to dismiss. The company may also need to take into account fresh evidence that comes to light on an employee's appeal against dismissal.
Any facts that emerge after the employee's employment is over cannot be taken into account, either to confirm the reasonableness of the company's actions or to cast doubt on whether it acted reasonably. They may, however, affect the amount of any compensation that an employee is awarded if the dismissal is found unfair.
The statutory minimum procedure requires employees to be given the opportunity to appeal against dismissal. Companies should therefore allow a right of appeal against all types of dismissal.
Wherever possible, an appeal should be heard by a more senior manager who was not involved in the original decision to dismiss. The employee has the right to be accompanied at the appeal hearing by a work colleague or trade union official of his or her choice (right to be accompanied ). Completely rehearing a case on appeal can be a useful way of making good any shortcomings in the way in which the original decision to dismiss was handled, unless those shortcomings related to failure to apply the statutory minimum dismissal procedure.
Companies should ensure that they have a full documentary record of the procedural steps that they took before deciding to dismiss an employee. These can prove invaluable in defending any claim that the dismissal was unfair.
These records are personal data and so must be kept in a way that complies with the requirements of the Data Protection Act 1998. That means that the records must be accurate, they should be no more extensive than is necessary, they must be kept confidential and they should be retained no longer than is necessary. The employee has the right to have access to the records, unless they reveal information about another person who does not consent to disclosure and it would not be reasonable to disclose them without that individual's consent.