Association of Chartered Certified Accountants (ACCA) Certification Practice Test

What may qualify as fair dismissal according to employment legislation?

1. Incompetence

2. Personal grievances

3. Unfavorable comparison with peers

4. Preference for a different employee

The correct answer is: Incompetence

In the context of employment legislation, fair dismissal refers to circumstances under which an employer is justified in terminating an employee’s contract without facing legal repercussions. One of the recognized grounds for fair dismissal is incompetence. This implies that an employee is unable to perform their job duties to the required standard, which can be substantiated through performance reviews, feedback, and documented warnings. When an employee consistently fails to meet the necessary job performance criteria despite receiving appropriate training and support, an employer may rightfully engage in a dismissal process. For this to qualify as fair, it typically involves a fair disciplinary process that includes clear communication about the performance issues and an opportunity for the employee to improve. On the other hand, personal grievances, unfavorable comparisons with peers, or preference for a different employee do not constitute fair grounds for dismissal. These reasons are often subjective and could reflect biases or personal conflicts rather than objective performance-related issues. Employment legislation seeks to uphold standards that protect employees from unfair treatment, meaning dismissals must be based on clear, justifiable evidence related to the individual's job performance.