50 years of unfair dismissal: a look at how far we’ve come

It is now just over 50 years since the UK introduced statutory protection for “unfair dismissals”. This is such a cornerstone of UK employment law protection that it is hard to imagine a time without it.

Of course we are now all familiar with the idea that, once an employee has protection from unfair dismissal, they may only be dismissed for one of five potentially fair reasons:

• capability or qualifications;
• conduct;
• redundancy;
• contravention of a duty or restriction imposed by law; or
• the old (generally unhelpful) chestnut “some other substantial reason”.

Alongside having a potentially fair reason, an employer must have acted reasonably in deciding on the potentially fair reason for dismissal, which often means following an appropriate fair process.

There was nothing so familiar prior to the 1970s, when the employment relationship was managed with reference to contract and the common law only. This meant that for employees employed on contracts of indefinite termination (which was the majority), the employer could lawfully terminate for any or no reason upon giving the requisite (and often short) period of notice. This is probably familiar to some of our US friends but now sounds extraordinarily freewheeling to UK employers and employment lawyers.

However, it wasn’t as freewheeling as all that, especially in some sectors. Collective agreements, which contained terms and conditions of employment and provisions to settle disputes, would often be negotiated between trade unions and employers. For many workers, however, these collective agreements did not contain effective provisions to deal with grievances as we see today. This meant that the only way to challenge a dismissal or disciplinary action was by industrial action, which resulted in an increase in the number of strikes during the 1960s. The negative economic impact of this caused concern in Government and Parliament.

As a result, in 1968 Lord Donovan led the Royal Commission on Trade Unions and Employers' Associations to look for a solution to this large-scale industrial action. The Commission recommended a statutory system of remedies for unfair dismissal with the aim of decreasing strike action and protecting employees who may not otherwise be protected from collective bargaining against unfair dismissal. This led to an employee’s statutory right not to be unfairly dismissed coming into force on 28 February 1972 under the Industrial Relations Act 1971.

There have since been a few clarifications and additions to the statutory right not to be unfairly dismissed, which is now set out in the Employment Rights Act 1996 (itself nearly 30 years old, which makes me feel old). These include the amendment of the definition of dismissal to include constructive dismissal, the introduction of the basic award and the qualifying period for employees to claim unfair dismissal increasing from one year to two years on 6 April 2012. This last development was a great surprise to me on my return from my first maternity leave (TUPE changed during my second maternity leave but that’s another story). However, the general principles and structure of the statutory protection from unfair dismissal otherwise remain largely similar to the legislation that came into effect on 28 February 1972.

If I had had a third baby, no doubt that maternity leave would have coincided with the introduction in March 2015 of the ACAS statutory Code of Practice on discipline and grievance procedures. This was surely one of the most helpful and accessible guides to non-lawyers, whether employers or employees, when considering a misconduct or poor performance dismissal and wondering how to comply with the second statutory limb of how to act reasonably when treating poor performance or misconduct as a sufficient reason for dismissing the employee.

As it says on the tin, the ACAS Code “provides basic practical to guidance to employers, employees and their representatives and sets out principles for handling disciplinary and grievance situations in the workplace”. It also modestly says “A failure to follow the Code does not, in itself, make a person or organisation liable to proceedings. However, employment tribunals will take the Code into account when considering relevant cases” but foolhardy is the employer (or lawyer) who suggests deviation from these basic principles without good reason. The sting in the tail of course being that “Tribunals will also be able to adjust any awards made in relevant cases by up to 25 per cent for unreasonable failure to comply with any provision of the Code”.

There are all sorts of top tips to ensuring a misconduct or poor performance dismissal or disciplinary process is fair but the simplest one I know is simply to go back and read the ACAS Code.

With special thanks to Annisa Khan, a current trainee in our Employment team, for her help in preparing this blog.

If you require further information about anything covered in this blog, please contact Kathleen Heycock, or your usual contact at the firm on +44 (0)20 3375 7000.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, March 2022