Employed or self employed: who can be unfairly dismissed?
A person must be employed under a contract of service, rather than self-employed under a contract for services.
There is no single test that determines whether a person is employed or self-employed. There are a number of important factors to be considered, but all the relevant circumstances can be taken into account including mutuality of obligation (an obligation to provide work and an obligation to do it), the parties’ intention, the degree of control exercised and whether services must be provided in person.
What amounts to a dismissal?
To bring a claim for unfair dismissal the employee must be dismissed. This takes place if (for example):
- there is a dismissal by the employer (with or without notice)
- a compulsory or voluntary redundancy
- a fixed term contract is allowed to expire by the employer
- the employee resigns in response to a serious breach of contract, or cumulative breaches by the employer (constructive dismissal)
- the employee resigns under pressure from the employer (‘resign or be dismissed’)
- the employer refuses to allow an employee on maternity leave to return
- the employer incorrectly treats the employee as having resigned
- the employer refuses to allow a striking employee to return to work
This does not include withdrawing an offer before employment has begun, whether or not the offer has been accepted.
When is there a dismissal by the employer or a resignation by the employee?
The most common form of dismissal is termination by an employer, either with or without notice, and either by words or conduct.
If the employer’s words or conduct are ambiguous then a Tribunal will look at the purpose and effect of those words as well as all the surrounding circumstances to decide how a reasonable employee would have interpreted the employer’s words.
If an employee resigns using ambiguous words, or appears to resign, then the Tribunal will apply a similar test to decide how a reasonable employer would have interpreted the employer’s words.
In some circumstances where a dismissal or resignation takes place in the heat of the moment, this can be unilaterally withdrawn if the employer or employee acts promptly. Once accepted however a dismissal or resignation cannot be withdrawn except by agreement.
An employer may also be expected to write to confirm an employee’s intentions if these are unclear, for example a failure to attend work without excuse or explanation. Depending on the circumstances, disciplinary action may be more appropriate.
When is there a termination but no dismissal?
Very occasionally an unforeseen event makes future performance of the employment contract impossible or very different, in which case the contract is frustrated and the employee cannot claim to have been dismissed.
The employment relationship can also terminate by mutual agreement, for example retirement on reaching an agreed qualifying age.
If there is a dispute over whether a dismissal has occurred, the onus is on the employee to show that it is more likely than not that a dismissal has taken place otherwise a claim will fail.
Who can claim unfair dismissal?
Any employee (ie regardless of service) who has been dismissed for a discriminatory reason (see Discrimination) or for some other protected reason which can result in an automatically unfair dismissal (including):
- whistleblowing (see Public Interest Disclosure)
- seeking to enforce a legal right
- health & safety reasons
- trade union activities
- pregnancy, maternity leave or some other related reason
Any other employer must be continuously employed (ie. without a significant break) for 2 years at the effective date of termination. In some circumstances this can include consecutive fixed term contracts. In order to calculate the date of termination the employee should add any statutory (but not contractual) notice entitlement that was not given by the employer.
When is a dismissal unfair?
If an employee has two years’ service and is dismissed on the transfer of a business (TUPE) or for failing to declare a spent conviction, then the dismissal can be automatically unfair.
Whether or not a dismissal is unfair in other circumstances where the employee has 2 years’ service depends on the reason for dismissal (see above) and the procedure the employer followed.
The employer must show that that reason was a fair one because it related to one of the following reasons:
- work-related misconduct, including gross misconduct
- non-performance at work
- medical illness or some other incapacity
- some other substantial reason which makes it inappropriate to continue to employ the employee
In addition the employer must also show that it has adopted a fair procedure in dismissing the employee by following the ACAS Code of Practice on disciplinary and grievance procedures, which covers investigation, representation, the hearing and appeal. If a Tribunal finds that the unfairness relates to procedure alone, but that there was, or was potentially a fair reason for dismissal, then this may affect the compensation awarded.
When should an unfair dismissal claim be brought?
A claim for unfair dismissal must be brought within 3 months of the date of dismissal (eg, dismissal on 24 June 2014 up to 23 September 2014). The date of termination (or EDT – effective date of termination) is the date the dismissal actually took place, or was notified to the employee or employer. A verbal dismissal or resignation takes place when communicated, or in the case of a written communication, when received and read. The date of termination is not affected by any payment in lieu of notice.
It should also be noted that ACAS conciliation is a compulsory precursor to any proceedings and that the time limit for issuing a claim will usually be affected by this process (see Early Conciliation).