Let’s face it, terminating employment isn’t something that any employer necessarily wants to do. In an ideal world, you’d recruit the perfect people and you would never have to dismiss them. Unfortunately, we don’t live in an ideal world and terminating employment could be something you come face-to-face with as an SME owner. So how can you get rid of an employee without breaking any laws?

Below, we give you four legal reasons for terminating employment. If you’re dealing with any of the things we list below, remember that you don’t need to do it on your own! We have a team of HR consultants who are ready to help you deal with any employee issue that comes your way. Pick up the phone and give us a call on 0330 333 4997 to speak to our team or email info@smeadvisor.co.uk.


One of the first reasons for terminating employment that comes to mind is if the employee continually breaks the code of conduct. Although conduct issues can begin as minor issues like not turning up on time if they persist or escalate they can begin to make real issues.

You should have processes in place to deal with these types of issues, like giving the employee a series of warnings. Once all the processes have been followed and the employee is not changing their behaviour, it’s probably time to start the termination of employment process.


There are two different reasons for dismissal under this section.  The first is that, in some unfortunate cases, employees could develop ill-health which makes it difficult for them to fulfil their job role. If this does happen, you’ll need to make sure that you explore all the ways that the employee could be supported. You’ll also need to allow time for the employee to get better and, as this is ongoing, you’ll need to continue to monitor the situation.

As the employers, you’ll also need to consider other employment options such as a part-time position or allowing the employee to work flexibly. If all options have been exhausted, dismissal may need to take place.

The other reason for dismissal under ‘capability’ is poor performance from the employee. As the owner of the business, you’ll of course want to make sure that the employee is performing the best that they can. Measuring the performance of your employees is a crucial part of being an employer/ manager and so when you begin to notice a decline in performance, it’s time to take action.

At first, you’ll need to have a meeting with the employee to discuss why their performance has faltered. You’ll also need to make them aware of the disciplinary warnings and make sure that at every stage of the performance management process, you give the employee time to improve and support them. As you follow this process, you may find that the employee has gaps in their knowledge and may need training to make sure they can fulfil their job role.

Once you have done everything you can to help the employee improve with their performance and things aren’t improving, the dismissal process can then start.


Business owners, directors and managers facing the daunting tasks of making staff redundant need to be aware that redundancy procedures are very complex. They must understand their obligations including employees’ rights and the correct procedures to follow to avoid ending up in an Employment Tribunal.

If your business requires fewer employees, or if, unfortunately, it’s closing down, we can help you. We can ensure that you follow a meaningful redundancy consultation process should redundancies prove unavoidable.

Statutory Ban

If an employee’s job is reliant on them holding a qualification and they lose that qualification, then you may choose to consider terminating their employment. Before doing so, you need to consider what reasonable steps the employee could take to avoid having to terminate.

One of the ways to avoid dismissing the employee is to look at available positions elsewhere in the business. There are exceptions where to continue employing them yourself it will mean breaking the law and therefore termination might be unavoidable.

Examples of this could be if a work visa is revoked/ expires, financial and regulatory bodies prohibiting them from practising their profession. Another example could be that security clearance is no longer held (if this is the result of a criminal offence then this may entitle the employer to use another reason for terminating).

If you’re facing any of the reasons for dismissal with an employee within your organisation, we can help you. Our team of HR consultants have years of experience dealing with employee issues; including dismissal. Give us a call now on 0330 333 4997 to speak to our team about how we can help you. Or email us at info@smeadvisor.co.uk.

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