Once you have shown that a dismissal was for a permitted reason, the employment tribunal must then decide whether you have acted reasonably. In practice it is usually relatively easy for you to show the reason for the dismissal, but persuading the tribunal that you have acted reasonably may be a little more difficult.
The employment tribunal will have to consider each case on its own facts. There are a number of principles that the tribunal must follow in determining reasonableness:
The tribunal is also entitled to take into account the size and administrative resources of the business. If you have a small workforce, you may find it more difficult than a larger firm to find other employees to do the work of a particular employee if they are absent through sickness for a long period. This might justify the employee's dismissal and replacement in circumstances where a larger firm would not be acting reasonably.
A small firm is also less likely to have suitable alternative employment if a job is lost through redundancy. A small firm may also have less formal disciplinary and consultation procedures than a large one.
You may be justified in dismissing your employee, but the dismissal may still be unfair if there are procedural defects, for example if the employee is dismissed for misconduct without being given an opportunity to explain his or her actions. The same applies if the employee is made redundant without any consultation.
In deciding what is reasonable or unreasonable, the tribunal will also look to whether there was an alternative to dismissal, for example, suspension or demotion.
Where industrial action was taken or you were threatened with industrial action, the tribunal cannot take into account any pressure put on you by way of such action.
The fact that a dismissal is a breach of contract will not of itself render it unfair. The test is whether you acted reasonably.
A long-serving employee may well deserve more consideration regarding sanction before dismissal.
A particular reason for dismissal may require a particular application of certain principles. For example, an employer may move premises and request that its employees travel a reasonable distance to the new offices. If an employee decides to refuse to travel because it is less convenient for him or her, the employee's dismissal can be reasonable because there is a sound business reason for the dismissal.
Dismissals on the grounds of capability are based on whether the incapability is due to incompetence or sickness.
Before dismissing your employee for incompetence, you should normally have warned them about the standard of work and given them the opportunity to improve. Where appropriate, you should provide adequate training. For example, where your employee has been moved to a job beyond their capabilities, you should consider whether it is possible to move them to a job within their capabilities.
In the case of long-term illness, it may well be fair to dismiss your employee. The nature and likely duration of the illness and the length of service will be relevant, as are your business needs and requirements.
You can replace an employee in a key position or in a small business more quickly than if the employee was in a less vital position or in a much larger firm. Ultimately, the test is whether you could reasonably be expected to wait any longer for the employee to return.
It is advisable to consult with your employee about the nature and likely length of their illness. You should seek medical advice relating to their condition and consider whether suitable alternative employment can be offered. You will, however, require written consent from your employee before you can obtain any medical reports from a specialist or doctor.
In the case of permanent disability, the contract may be frustrated. It is most likely that in these circumstances dismissal is no longer an issue.