Recruitment and dismissal mark the start and end of the employment relationship and invoke various aspects of employment law that employers must apply when carrying out these processes. Handling these processes in accordance with legal requirements helps employers avoid potential discrimination and unfair dismissal claims; as well as potential reputational damage.

 

Hiring: fair and lawful practices

When recruiting, employers must avoid discrimination on protected grounds such as race, sex, disability, and age. Employment tribunals have highlighted that even seemingly subconscious factors that influence recruitment decision-making, such as cultural stereotypes, can lead to discrimination claims if they influence hiring decisions.

 

For example, in 2024, an employment tribunal awarded £95,000 to two mixed-race women after finding racial bias in an internal recruitment process. The tribunal criticised the employer for relying on “gut feelings” rather than objective criteria, which led to inconsistent and discriminatory outcomes. The judgment emphasised that subjective decision-making in recruitment increases the risk of unconscious bias and breaches the Equality Act 2010.

 

For this reason, employers are advised to follow structured interviews, and criteria, such as clear scoring systems, as well as documented reasons for recruitment decisions to avoid similar discrimination claims. Employers are advised to always base external recruitment and internal promotion decisions on objective criteria relevant to the role.

 

Dismissal: The importance of process

Dismissal can be fair if it falls under one of the potentially fair reasons set out in law:

• Conduct


• Capability or performance


• Redundancy


• Statutory restriction


• Some other substantial reason

 

However, the fairness of dismissal depends not only on the reason but also on the dismissal procedure followed. Employers must:

• Carry out a reasonable investigation where required prior to dismissal, documenting the evidence relied on and providing this to the employee, giving them an opportunity to respond.


• Follow the ACAS Code of Practice on disciplinary and grievance procedures if based in England, Scotland or Wales; or the disciplinary and grievance procedures issued by The Labour Relations Agency, if based in Northern Ireland.


• Consult adequately in redundancy situations and consider alternative roles.

 

Caselaw, i.e. decisions of the employment tribunals and courts, has highlighted the importance of consistent disciplinary procedures and evidence-based decisions in misconduct cases. Failure to follow a fair process can lead to an uplift of up to 25% in compensation awards for breach of the ACAS Code; or an uplift of up to 50% in compensation awards in Northern Ireland.

 

When dismissing employees due to redundancy, caselaw has established that, as part of a fair dismissal procedure, redundancy processes must include proactive redeployment efforts where alternative vacancies exist. Simply listing vacancies is insufficient; employers must assist at-risk employees in securing alternative roles, where these are available.

Sham redundancies (i.e. dismissing employees under the cloak of redundancy when in fact their role is not redundant) and lack of consultation breach fairness requirements resulting in findings of unfair dismissal in the event of a tribunal claim.

 

Length of Service and Automatically Unfair Dismissals

Ordinary unfair dismissal claims generally require two years’ continuous service in England, Scotland, and Wales and one year’s employment service in Northern Ireland. However, certain dismissals, such as those linked to whistleblowing, discrimination, or asserting a statutory right, are automatically unfair and do not require any minimum length of employment service.

 

Practical Steps for Employers

To reduce risk when carrying out these processes:

• Document all recruitment and dismissal decisions and the reasons for them.


• Train managers (such as employee line managers) who are involved in these processes on the employer’s procedures to ensure they are aware of them and understand how to apply them.


• Offer appeal rights and keep contemporaneous records of meetings and decisions.

 

Upcoming Changes

Among other changes, the proposed Employment Rights Bill for England, Scotland and Wales currently working its way through Parliament may introduce a “day one” right to protection from unfair dismissal, significantly altering the current employment landscape.

 

Resources for NABAS members

Markel’s Business Hub, which members have access to as part of their member benefits, offers practical guidance, templates, and fact sheets on topics such as:

• Dismissing short-serving employees


• Redundancy processes and template letters


• Best practice for recruitment and avoiding discrimination


• Guidance and updates on the Employment Rights Bill

 

Business Hub gives members access to vital documents such as Terms and Conditions, contracts, and website policy templates, saving members additional expenditure on legal and other digital resources.

 

Visit https://businesshub.uk.markel.com for downloadable templates and expert guidance. New visitors will need to register first using the NABAS token code.

 

Members can also access Markel Law’s 24/7 legal advice line for telephone advice on employment issues, as well as other business and tax advice, by booking a callback via the Markel Business Hub using the ‘Get advice’ facility, or by telephoning the advice line on 0333 321 1787.