Termination of Employment in the UK

Everything you need to know about termination of employment in the UK

Although we’d love for every employee to be the best hire you’ve ever experience, sometimes things just don’t work out the way you would like, and you find yourself questioning whether termination is the only possible solution. Terminating employment in the UK can be quite difficult, and ACAS (the UK employment governing body) sets out 5 reasons that are deemed acceptable to be able to terminate employment in the UK. They are:

  • Conduct
  • Capability and Performance
  • Redundancy
  • Statutory illegality or breach of a statutory restriction
  • Some other substantial reason

Let’s take a look at each one to understand in more depth what they actually mean.


When an employee violates workplace regulations via improper behaviour or action, this is considered misconduct. Examples of wrongdoing include:

  • Bullying
  • Harassment
  • Refusal to do tasks (insubordination)
  • Being absent without authorisation (sometimes known as “AWOL” or absent without leave).

For wrongdoing outside of the workplace, an employee could also face disciplinary action. For instance, if an employee behaves inappropriately in front of external clients at the office Christmas party, the company may suffer.

It depends on how serious the employer considers the misconduct to be and whether it poses a risk to the company’s operations. It is crucial that the employer conducts a comprehensive inquiry and is able to demonstrate the impact on the firm.

In order to qualify as “gross misconduct,” an action must be extremely serious or have extremely dire consequences. The company could then opt to fire the worker with or without notice.

The following are some examples of serious wrongdoing in the workplace:

  • Fraud
  • Physical conflict
  • Extreme carelessness in performing tasks or interacting with others (also known as “gross negligence”).
  • Serious insubordination, such as persistently defying a supervisor’s authorised and reasonable directives

Capability and Performance

One of the most common reasons for terminating employment in the UK is due to poor performance and capability. An employee’s capability refers to how well they are able to carry out their duties. If the worker is powerless to change the situation, it is likely a problem with their abilities. For instance, if an employee’s illness or handicap prevents them from performing their job duties, and reasonable accommodations and/or additional support do not resolve the issue.

Any time a question of competency arises, an employer must follow either a capability or performance management procedure.

Sometimes it’s hard to tell if an employee’s poor performance is the result of incompetence or bad attitude. But before taking any action, the employer must always follow a thorough and fair approach.

The best course of action for an employer dealing with a capability issue is to have a policy that actively supports the employees ’ skills. This is done so the employee can get better and subsequent issues can be avoided.

Depending on the situation, a company may offer an employee:

  • Help, such as modifying their workload or scheduling counselling sessions
  • Education that will improve their performance on the job

This may involve a performance management process; one of our HR Specialists will be able to guide you through this process.

The employer has a duty to accommodate any employee who has a disability that impacts their capacity to perform their job. After exhausting all other avenues, a company may decide to terminate an employee’s employment.

Even if they are sick, employees are expected to cooperate fully with any investigation conducted as part of a disciplinary or competency process.


Another common way of terminating employment in the UK is redundancy. In addition to legitimate termination reasons like poor performance or repeated absences from work, redundancy is another valid basis for dismissal. This can occur when there is no longer a need for an employee to do a certain task or when the business no longer operates. An employee may still claim unfair dismissal if the redundancy selection process isn’t transparent and fair from the start (this includes a consultation procedure and examination of potential alternative work).

It is necessary to exercise caution because a dismissal on the grounds of a legitimate redundancy will be automatically unfair in some cases, such as if the employee was selected because they are pregnant.

Dismissal for redundancy must only occur if due process has been followed. Redundancy is a process that typically takes at least two weeks to complete.

Just because you don’t like the way someone looks or think they’re acting inappropriately doesn’t give you the right to fire them through redundancy; it’s the position, not the person, that’s eliminated.

Statutory illegality or breach of a statutory restriction

This is a special case that arises only when maintaining an employee’s employment would be illegal. That’s the case, for instance: If you hire a truck driver and they are pulled over or lose their licence: (and you have no other work for them)

  • The employee’s right to work in the UK has expired, and thus, continuing to employ them would be illegal
  • The worker has misplaced or never obtained a necessary certification.
  • The company learns the worker has or has been issued a criminal history record.
Bear in mind that violating the law is not a valid excuse to avoid following the proper termination steps. There is still an official procedure that must be followed when firing an employee.

Some other substantial reason (SOSR)

This is somewhat of a grey area when it comes to terminating employment in the UK as it’s not defined by law what kinds of terminations fall under this umbrella, but common ones include:

    • The end of a fixed-term employment arrangement, or the need to let go of temporary workers (such as those filling in during an absence or maternity leave) so that the original worker can come back to work


    • In the event that a client refuses to work with an employee and there is no other work for that employee to do.


    • Employees who refuse to accept revised terms and conditions may be terminated and rehired under different terms and conditions (after undergoing consultation and exploring all the options of course).


    • The business is being seriously hampered by a personality conflict.


  • If there is a major conflict of interest, such as when a high-level employee has a significant other who is employed by a competitor and poses a threat.

Know that if you dismiss on the basis of SOSR, your method, logic, and reasonableness will be put to the test in the event of a claim to a tribunal. Avoid relying too heavily on this “dustbin” category or moving on if you don’t have a solid enough case to justify it.

Important Information

Does the employee have less than 2 year’s service?

If an employee has less than two years of service, then terminating employment in the UK can occur without having having to provide a just cause for termination or undergo an impartial disciplinary or dismissal process. This is due to the fact that an employee is guaranteed protection from unfair dismissal only after working for the same company for two years.

When terminating an employee who has been with your company for two years or longer, however, you must adhere to the fair reasons outlined in the Employment Rights Act of 1996 or risk an unfair dismissal claim.

When an employee files a claim of unfair dismissal, you must additionally demonstrate that you acted fairly when you deemed any of the aforementioned statutory reasons to be grounds for termination.

In some cases, a dismissal of an employee with less than two years of service will be automatically unfair, regardless of the length of time the individual has been with the company. This is so because employees have legal recourse if their dismissal goes against their fundamental employment rights.

An employee can file for automatic unfair dismissal in more than 50 different situations, including those involving pregnancy and maternity, asserting statutory rights like the right to annual leave or the national minimum wage, making a protected disclosure about wrongdoing in the workplace, or raising a health and safety concern.

If an employee is dismissed for a reason related to a protected characteristic, this could amount to both unlawful discrimination and automatically and unfair dismissal. Under the Equality Act 2010 protected characteristics include age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation.

Our HR Specialists are on hand to answer any queries you may have with terminating employment in the UK, and where terminating is necessary, we will be able to hold your hand through every stage the process.

Scott Winter

Scott Winter

HR Director

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