As an employer, you never want to have to write a dismissal letter. Dismissing someone is a thankless part of the remit for anyone managing staff, but it’s important to get it right.
Failing to follow a fair process or stumbling on your documentation could easily mean your business faces litigation. Luckily, Employer Advice has a free, pre-constructed template for business owners to utilise to help ease the stress of dismissing employees.
This article covers everything you need to know about writing and handling a dismissal letter. You can skip straight to the download here. Of course, if you need more immediate support, why not contact our expert team at Employer Advice.
When should I produce a contract termination letter?
If one of your employees is found to have committed gross misconduct, following an investigation and fair process, then as an employer, you are within your rights to dismiss them.
Dismissing an employee is simply ending that employee’s contract of employment with your organisation.
That said, even if you have conducted a thorough investigation and you’ve got ample evidence backing your decision to dismiss your employee, it can still be a stressful experience.
Once a decision has been reached to dismiss an employee then it is good practice to notify them in writing using a dismissal letter.
To reduce the stress of a dismissal, we’ve put together a sample employee dismissal letter and included an example scenario.
Firstly, let’s examine what behaviour would constitute a dismissal.
What is a dismissal?
Dismissal is a disciplinary action whereby an employer chooses to terminate an employee’s contract of employment.
There are instances where an employee can be dismissed with immediate effect, but employers must be aware that there are certain procedures to follow. Failure to do so could lead to a potential claim against your organisation for unfair dismissal.
In order for an action to be considered a serious breach of contract, employers must remember to provide sufficient evidence. This is both for the action itself and the fair consultation process that has been conducted.
What is a dismissal letter?
A dismissal letter is a formal document explaining the decision to dismiss an employee. The document should be handed to an employee within a reasonable timeframe following their dismissal and should be concise, outlining factual circumstances.
The letter will include a date, and you may choose to outline any appeals procedure.
Are dismissal letters a legal requirement?
Although it is not always a legal obligation to produce a dismissal letter, it is important that you follow the terms of your employment contracts. Often an employment contract will include terms stating that notice of termination needs to be in writing.
Despite this, a dismissal letter is an important document for many reasons. The biggest of which tends to be the fact that a letter provides a level of certainty for both employer and employee that the dismissal is going to take effect. In effect, the letter helps avoid misinterpretations.
Is there fair and unfair dismissal?
If you take the decision to dismiss an employee you must make sure you have followed fair process, utilising the ACAS code of practice. There must be fair reasons, based on any or all of the following:
Conduct
Not all conduct-related dismissals are gross misconduct. Conduct covers a range of issues such as:
- Poor attendance with regular absenteeism.
- Failure to follow instructions from line management.
- Behaviour which causes a negative impact on the team and business.
- Disclosing private company information.
If you have a member of staff who falls into any of those categories then dismissal might be an option. You need to ensure that the whole process is fair if you decide on contract termination.
Capability and poor performance
Dismissing someone for capability means that a member of staff doesn’t have the ability, skillset or qualifications to undertake the role they were hired for.
A tribunal might deem a dismissal unfair if you haven’t proved two things:
- Can you evidence that the employee is incapable of performing their role? This may be through regular performance appraisals, KPI tracking, and looking at the employee’s consistent poor performance against their job description.
- Can you show that the company has taken steps to help? This may be through training, development, and support.
Redundancy
Sometimes a decision to let go of an employee has nothing to do with their performance of conduct. Redundancy could be due to their job no longer being required because of the business downsizing or departmental closure.
One thing to be aware of as an employer is you will leave yourself open to litigation if you make an employee redundant and then hire someone else for the role. Redundancy means that the job is made redundant, not the person.
Summary dismissal
You would summarily dismiss an employee when you terminate their employment instantly, without a notice period or pay in lieu of notice. This is normally because of gross misconduct such as theft of company property, fraud or violence.
Statutory Restriction
A statutory restriction is when an employee isn’t able to continue working due to statutory restrictions, such as restrictive covenants. For example, if the employee is working with children and they haven’t passed a DBS check.
Some other substantial reason (SORS)
Although there is some ambiguity here, this is intentional. SORS refers to any situation where an employee is dismissed on grounds that don’t fit into any of the above categories.
Can I dismiss an employee during their probation period?
In short, yes you can, as long as there is a fair reason. Employers are able to dismiss a member of staff whilst they are in a probationary period. The only time an employment tribunal may rule in favour of an employee is in an instance where the reasons are automatically unfair.
Otherwise, an employee would need to have been in continuous employment for two years to bring an unfair dismissal claim against you.
As you would expect, your dismissal letter must inform the employee why their contract has been terminated.
How can I avoid wrongful dismissal?
Wrongful dismissal is a common claim at an employment tribunal. As an employer, you need to be vigilant when it comes to your processes. You can face litigation if you break the terms of your employment contract when dismissing an employee.
Often, the breach is related to notice period terms, whether they are contractual or statutory requirements by UK law.
There are, however, many things to be wary of when it comes to wrongful dismissal. These include:
- Any breach of contractual redundancy procedures.
- Choosing summary dismissal for gross misconduct when the issue is only misconduct.
- Not meeting contractual terms for a temporary contract (especially if it’s a temporary to permanent contract).
- Breaching contractual disciplinary procedures (for example, treating a small performance issue as gross misconduct).
You should also make sure that once an employee has been dismissed you adhere to any contractual terms. This might include things like making sure they are paid holiday pay, giving them the right to appeal, giving them a dismissal letter, or allowing them to work any notice.
How can Employer Advice help with a dismissal letter?
Employer Advice is an expert advice service dedicated to supporting UK businesses. We only offer support to employers so you can be assured that we uphold your organisation’s best interests.
If you have challenges in your business with producing a dismissal letter then why not contact our team of dedicated HR and employment law experts or download our dismissal letter template.
With over 80 years of experience in helping employers take the stress of handling their HR and employment law obligations. Get in touch with one of the Employer Advice experts on 0800 470 0613.