What are the five fair reasons for dismissal?

Employees who have been employed for two years or more are protected against unfair dismissal and, if they are dismissed they may bring a claim in the employment tribunal.

An employer may defend a claim for unfair dismissal by showing that it had a potentially fair reason for the dismissal and that it acted fairly in dismissing for that reason.

The five fair reasons

The first step therefore is to identify a potentially fair reason for the dismissal. If an employer cannot show that it had a fair reason then the dismissal is unfair. The five potentially fair reasons are:

misconduct
capability (this includes medical capability as well as ability to do the particular job)
redundancy (this has a specific legal meaning)
illegality (i.e. the employment is unable to continue without breaching the law e.g. due to change in immigration status or loss of driving license)
some other substantial reason (this is a “catch all” category for any other legitimate reason such as a break down in the relationship between the parties.)

Note that previous categories such as dismissal for retirement are no longer valid.

Even if the employer can point to one of the five potentially fair reasons for dismissal this does not mean that an employer will not win their claim for unfair dismissal. The employer must still have acted fairly in dismissing the employee for that reason, both in terms of following a fair procedure before the dismissal (procedural fairness) and in dismissing for the reason given in the particular circumstances (substantive fairness).

Background

Before legislation was introduced in the 1970s, an employer could dismiss someone for any reason, or no reason without any legal consequences. Parliament decided that this imbalance of power should not be allowed to continue as people’s jobs were so important to them, both economically and socially. Legislation to protect employees against being dismissed unfairly was passed and today the relevant statutory protections can be found in the Employment Rights Act 1996.

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