If an employer wants to dismiss an employee with the necessary length of service to enjoy protection under the Act, the employer needs to be able to show that they had a good reason to take that action and that they did so in a fair manner.   

For employees who started their employment on or after 6th April 2012, they must have accrued at least two years’ continuous service before they are eligible for protection against unfair dismissal. Employees who began employment before that date only need one year of continuous service. 

If an employee enjoys protection under the law, the employer needs to be wary when considering dismissal.  

Potentially fair reasons for dismissing an employee

There are five of these:   

  • the conduct of the employee; 
  • the capability of the employee to do the job;  
  • redundancy; 
  • a statutory duty or restriction which stopped the employee continuing in their job (for example, those working in the security industry must hold an SIA-approved qualification); or  
  • Some other substantial reason (SOSR) 

What is ‘some other substantial reason’?  

SOSR covers any reason not falling within the first four categories, provided it is substantial enough to justify dismissal. The reason must be genuine and not trivial or frivolous. 

Some situations in which SOSR may well apply are as follows:  

Personality clashes

Sometimes, employees just don’t get on with each other. The results of such a situation can range from mild unpleasantness to serious disruption to the workplace, depending on who the employees are and the roles they fulfil. If the disruption is significant, dismissal may be justified under SOSR. 

However, it is important that the employer can show that the disruption caused was serious enough to be causing real harm to the business. 

They will also be expected to show that they have done all that they reasonably can, short of actual dismissal, to solve the problem.  

Such actions could be:  

  • Moving one of the affected employees to another department or section 
  • Altering work patterns so that the affected employees are kept apart 
  • Instigating mediation to try and resolve the situation to everyone’s satisfaction 

Refusal to accept changes to terms and conditions 

An employment contract can only be varied in accordance with its terms or with the parties’ agreement.  

However, an employee is contractually entitled to resist unilateral changes to their terms. There are certain situations in which the change amounts to a breach of contract. When this happens, the employee can resign and claim unfair constructive dismissal.  

To be able to unilaterally change the terms and conditions of the employment contract, the employer needs to be able to show that they imposed the changes for a ‘sound business reason’.  This does not mean that the changes were vital to the survival of the business but the business should put forward evidence to show that the reasons for the change were not trivial.  

If it can be shown that the overwhelming majority of the employees (or an involved union) have decided to accept the change, an individual employee who has been dismissed for refusing to accept the change may have a hard time proving that the dismissal was unfair.   

Business re-organisation

If the employer is restructuring the business but no redundancies are being made, they may be able to rely on SOSR as a potentially fair reason for dismissal.  

It is often the case that during a re-organisation, employees’ terms and conditions can be changed. If an employee refused to accept the changes to those terms and conditions, their dismissal may be covered by SOSR.  

Conflicts of interest

There are situations in which an employee finds themselves in a position where their personal circumstances may conflict with the interests of the business. If this is the case, the employee’s dismissal may well be covered by SOSR.  

As with other dismissals for SOSR, the business will need to prove that the employee poses a risk to its interests. For example:   

  • If the employee was able to access commercial information 
  • If the employee had a personal connection to a competitor or somebody who worked for a competitor 
  • If the employer was genuinely afraid that commercial information might be leaked (although they would have to prove that such a fear was real) 

Pressure from third parties

Sometimes, a third party can take a dislike to – or raise an objection against – an employee continuing to be employed by the business. If a third party, perhaps a customer or supplier, calls for an employee to be dismissed, the employer can use SOSR to justify it, provided that the business can demonstrate that the third party’s business is crucial to its own and that the third party is serious about its intention to leave if the employee is not dismissed.  

A major client insisting that an employee’s dismissal is essential to maintaining the business relationship may be given more weight than a minor client whose demand carries no significant consequence. Again, however, evidence of the fallout and effect on the business is key. 

Breakdown in Trust and Confidence

One of the implied terms in every employment contract is the duty of mutual trust and confidence. From an employee’s perspective, this means agreeing to act loyally and in good faith toward the employer, refraining from actions that undermine the interests of the business. Breaching this duty can result in significant disruption, and employers need to be aware that some breaches could constitute misconduct or gross misconduct. 

Examples of breaches of the duty of trust and confidence include: 

  • Misusing the employer’s property or resources 
  • Poaching the employer’s customers or clients after leaving the business 
  • Directly competing with the employer’s business 
  • Taking deliberate actions that disrupt the employer’s business operations 
  • Acting in a way that damages the employer’s reputation 

In situations where an employee has breached their duty in this way, it could be grounds for dismissal. While such breaches might justify dismissal under SOSR (Some Other Substantial Reason), it’s important to recognise that sometimes it’s not immediately clear and that there can be a fine line between a SOSR dismissal and a dismissal for conduct-related reasons. For example, breaches of the duty of trust and confidence could be considered serious misconduct, or even gross misconduct in the most serious cases. This means that instead of relying on SOSR, employers may need to address these breaches through their disciplinary process, especially if the contract and policy make reference to such breaches being responded to in this way. 

Employers should carefully assess the nature of the breach before deciding on the appropriate grounds for dismissal. If the breach is clearly linked to an employee’s conduct, using SOSR may not be the most suitable or justifiable approach. A tribunal is likely to scrutinise an employer’s decision if SOSR is used in circumstances where a more straightforward reason, such as conduct, would be more appropriate. Using the correct dismissal reason is crucial, not just from a legal perspective, but also to demonstrate that a fair and reasonable process was followed. 

Employers must ensure they follow the correct process for dismissal, whether under SOSR or another potentially fair reason. This includes conducting a thorough investigation, offering the employee a chance to respond to the allegations, and applying appropriate procedures.  

Even if SOSR is the chosen reason, employers still have the responsibility to prove that the dismissal was fair, both substantively and procedurally. 

Fire and rehire

There is currently a new statutory Code of Practice on fire and rehire.  

Specifically, the provisions of the new Code will apply when the prospect of dismissing employees and re-engaging them on the new terms has not yet been raised by the date of implementation. 

The Code sets out parameters and obligations. Where it suggests that an employer ‘should’ follow a certain rule, they will have to show why they didn’t. In situations where the Code says “you must”, then the employer will be expected to follow it regardless.  

The code is relevant to the fairness of the dismissal. If it has been followed, then it’s a good way for the employer to show that the dismissal was within the band of reasonable responses. If it is not followed then not only does it open the employer up to potential arguments of unfair dismissal but also an uplift of up to 25% compensation in the event that there is evidence that their refusal to follow the rules was unreasonable.  

The Code can be found here https://www.gov.uk/government/publications/dismissal-and-re-engagement-code-of-practice  

New laws

There are also new laws to be aware of; specifically in this case, the Employment Rights Bill. This is not expected to become law until at least mid-2025, and many of its provisions will not come into effect until additional regulations are established by the Secretary of State – likely no earlier than 2026. Reforms related to unfair dismissal are projected to be implemented by Autumn 2026 at the earliest. 

According to the Bill, a dismissal will be considered unfair if the main reason for it was the employer’s request for a change to the employee’s contract, which the employee refused. Additionally, the dismissal will be deemed unfair if the employer replaces the employee with someone who is willing to accept the new terms and performs the same duties. 

However, an employer may avoid a finding of unfair dismissal in very specific situations. To do so, they would need to demonstrate that the reason  for the variation was to eliminate, prevent, significantly reduce or mitigate ‘financial difficulties which at the time of dismissal were affecting, or were likely in the immediate future to affect the employer’s ability to carry on the business as a going concern or otherwise carry on the activities constituting the business’, and in all the circumstances the employer could not reasonably have avoided the need to make the variation 

If these conditions are met, whether the dismissal is fair or not would depend on a variety of factors outlined in the Bill and any regulations from the Secretary of State. 

The use of terms like “going concern” suggests that the threshold for justification is extremely high, approaching insolvency or liquidation. 

If the Bill is passed as currently drafted, it would severely limit an employer’s ability to impose changes to the terms and conditions of employment. What stands out is that the requirements for making these changes would be far stricter than those for dismissing employees due to redundancy or restructuring.  

A final word

Remember, even when SOSR justifies dismissal, employers must follow a fair procedure. Dismissal must be proportionate and procedurally sound to avoid an unfair dismissal claim. 

How can we help?

As you can see, the law on dismissals is complex and liable to change in the coming months. You need to make sure you have access to the most up to date and accurate information in order to avoid possible tribunal claims.  

That’s where rradar’s employment law experts come in. Our advice and guidance can help you navigate this tricky area of law. Why not call them if you have anything that is causing you concern?