UK Law and Practice Contributed by: Phil Linnard, Philippa O’Malley, David Rintoul and Clare Fletcher, Slaughter and May
Where (as is common in the UK) an employer does not have any form of employee representative body, and is required to inform and consult collectively with employees (for example, on a business transfer or col - lective redundancy process), the employer will need to arrange for employee representatives to be elected for that purpose. 6.3 Collective Bargaining Agreements Where an employer and trade union have undertaken collective bargaining and reached agreement, this is recorded in a collective agreement. The agreement may cover a number of matters such as pay, hours and holidays; other terms and conditions of employ - ment; and disciplinary procedures. Under English law, collective agreements are not gen - erally legally enforceable between the trade union and the employer. However, their terms may be incorpo - rated into the individual contracts of employment of employees who are covered by that agreement (known as the bargaining unit). The bargaining unit is not an equivalent population to the organisation’s trade union members; it would typically be defined by job type or location, and may include trade union members and non-members alike. Those employees who have the terms of the collective agreement incorporated into their employment contracts can then enforce those terms against the employer. The trade union mean - while could challenge the employer’s non-compliance with a collective agreement by calling or threatening to call industrial action.
The five potentially fair reasons for dismissal are: • conduct; • capability; • redundancy; • breach of statutory duty or restriction; or • some other substantial reason. The fair procedure that must be followed by the employer – now envisaged in the ERB to be a day one right coupled with a power to make regulations on dismissal during an initial period of employment (IPE) – will depend to some extent on the particular reason for the dismissal; for instance, a redundancy process would typically look quite different from a lack of capability process (which itself could cover ill health or poor performance, both of which would require a different approach). That said, there are a number of common factors in most fair dismissal processes, which include: • conducting a reasonable investigation; • informing the employee of the allegations against them; • holding a hearing; and • providing an opportunity to appeal the employer’s decision. Employees have the right to be accompanied by a colleague or trade union representative at a discipli - nary or grievance hearing. Additionally, the Advisory, Conciliation and Arbitration Service (ACAS) Code of Practice on Disciplinary and Grievance Procedures will apply to dismissals for misconduct or poor per - formance (but not, for example, to redundancy or expiry of a fixed-term contract). Failure to follow the Code may affect the fairness of the dismissal and the amount of compensation awarded. Compensation for unfair dismissal is made up of: • a basic award based on the employee’s age, wages and length of service, but capped at GBP21,570; and • a compensatory award capped at the lower of 12 months’ pay or GBP118,223. Both caps are as at 6 April 2025.
7. Termination 7.1 Grounds for Termination
Under common law, an employee can dismiss an employee for any reason, provided they comply with the contractual termination requirements, including notice provisions. There are, however, a number of statutory protections that may apply, most importantly the right not to be unfairly dismissed. This requires the employer to demonstrate that it has a fair reason for dismissal and has followed a fair process.
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