Avoiding Discriminatory Dismissal Claims

Introduction

Where an employer dismisses an employee with less than two years’ employment (and provided the dismissal is not for an automatically unfair reason) the employee will have insufficient service to bring an unfair dismissal claim under the Employment Rights Act 1996 (the ERA). However, there is no qualifying period of employment needed to bring a claim under the Equality Act alleging that a dismissal was discriminatory. In some cases, an employee may have a claim for both discrimination and unfair dismissal. There is no limit to the amount of compensation that may be awarded for a successful claim of discrimination, unlike for unfair dismissal which is capped.

What is Discrimination in the workplace?

Under the Equality Act anyone contracted to do work personally is protected from discrimination because of one of the nine protected characteristics: age, disability, gender re-assignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation under the Equality Act 2010 (the Act). The types of discrimination relevant to each protected characteristic include direct, indirect harassment and victimisation. In the case of disability, discrimination may also be “arising from” a disability and the employer must comply with its duty to make reasonable adjustments for a disabled employee.

What is unfair dismissal?

An employer may only dismiss an employee lawfully if it is for one of the five potentially fair reasons under the ERA and it follows a fair procedure acting fairly and reasonably.

What are the 5 fair reasons for dismissal?

The five potentially fair reasons for dismissal are conduct, capability or qualifications, redundancy, illegality and some other substantial reason (a sweep-up category).

How Discrimination risks can be avoided

We look below at some of the fair reasons under the ERA where employers should be alive to potential discrimination issues:

Capability - Ill health (Medical Capability Dismissal)

When considering dismissal for ill health capability, whatever the type of absence, whether frequent and short-term, persistent and intermittent or long-term the first step for an employer is to investigate the reasons behind the absence. If it fails to do this and proceeds ultimately to dismiss under its procedure it could put itself at risk of a successful claim of discrimination. This is because absence could relate to issues in the workplace such as bullying and harassment because of one of the protected characteristics (in which case legal advice should be sought) or there could be an underlying health condition which may constitute a disability in which case the employer is under a duty to make reasonable adjustments.

Dismissing an employee with a disability

Where the employee is disabled, this does not mean an employer cannot dismiss the employee for ill health absence, but it needs to be able to show that it has complied with the duty to make reasonable adjustments and gone through a fair procedure. This involves ensuring that the employer has the up-to-date medical position, it has consulted with the employee, and it has considered the availability of alternative employment. If the tribunal is satisfied that the employer has followed a fair procedure, it will then consider whether the employer can be expected to keep the employee’s job open any longer. The length of time is a fact-sensitive question depending on the nature and context of the employee’s job and illness. The employer may also be required to make reasonable adjustments to the procedure for managing sickness absence such as having meetings at the employee’s home and the employee might need more time to prepare for the meeting.

Capability - Poor Performance (Dismissal due to poor performance)

As for ill health, where an employer has an under-performing employee, it should be aware that performance may not be the issue and that there might be other reasons such as disability or harassment or bullying which has led to performance issues. If the employer proceeds to dismiss without investigating, listening to the employee’s explanation or without taking these factors into consideration it could be liable for a discriminatory dismissal. Legal advice should be sought on how to handle these issues.

Employers should not avoid addressing performance concerns because an employee is disabled but should instead ensure that it considers what adjustments may be needed such as additional support or training before and when reviewing performance.

Conduct

Where dismissal for misconduct is a likely disciplinary sanction, special care should be taken where there are potential allegations of discrimination. It is essential that the correct disciplinary procedure is followed to help minimise the risk of any such allegations succeeding. The employer must be able to show that the dismissal or any disciplinary proceedings are not related in any way to a discriminatory reason but instead are solely connected with the individual’s conduct.

In addition, an employer must not discriminate against or harass an employee during the dismissal process and must also avoid victimising someone by dismissing them because they have complained about discrimination or harassment or supported someone else in a discrimination or harassment complaint.

Redundancy

In a redundancy situation, the employer needs to ensure that its selection criteria do not directly or indirectly discriminate against employees with protected characteristics. Criteria that have an indirectly discriminatory effect are also likely to be unfair unless the employer can show an objective justification for using those criteria. One example is “last in first out” which used to be a common method of selection for redundancy. The issue with this is that if it is the only criterion, it is likely to result in claims of indirect age and/or sex discrimination as younger employees and/or women are likely to have less continuous service.

Using attendance records as a selection criterion could make the employer open to disability discrimination claims if an employee’s absence is connected with a disability. Therefore, the employer will need to make reasonable adjustments to this so that disability-related absence is discounted. Similarly, if absence is due to gender reassignment this should also be discounted.

Employers should ensure that they do not select on the basis of age alone which will be unlawful direct discrimination. Although age is the only protected characteristic which can be potentially justified in very limited circumstances, it is unlikely that selection on that basis will be successful. Employers should also not pressurise older workers to opt for redundancy or retirement to help reduce an organisation’s headcount. They should also not select younger staff because this will involve lower redundancy payments.

Employers should also not select on the basis of part-time or fixed-term employee status as this is likely to be indirect sex discrimination as more women than men work part-time or on fixed-term contracts.

Diversity Equity and Inclusion and Anti-Harassment Policies

Employers should ensure that they have and implement an equal opportunities policy or diversity, equity and inclusion policy and an anti-harassment and bullying policy and that they make all staff aware of these policies and their implications.

Employers must also provide adequate training to all staff on equal opportunities and discrimination as well as taking steps to deal effectively with any complaints, including taking appropriate disciplinary action.

Our Expertise

We advise on all aspects of employment law including on issues relating to discrimination and dismissal and advice on how to prevent issues arising and how to handle them if they do.

We use our exceptional breadth and depth of experience to give clients personalised advice to help manage risk and resolve issues as well as bespoke training tailored to your needs together with the use of our independent HR consultants to help put in place systems to monitor and review to minimise the risk of claims. Please contact Ben Smith or your usual Charles Russell Speechlys contact if you would like to get in touch.