Can an employer dismiss an employee because they are in prison?

If an employee is in prison, it may be fair for the employer to dismiss the employee by reason of their conduct, or because they are unable to perform the job.

The employer should consider factors such as the nature of the offence, the length of the sentence, the nature of the employee's job, the effect of the employee's absence on the business and the damage (if any) to the employer's reputation.

The employee's conduct could be a potentially fair reason for dismissal if, for example, they have been convicted of an offence that relates to their job, or the employer's reputation is likely to be damaged by the employee's conviction. The employer should carry out an investigation and conduct a fair disciplinary procedure, as far as possible in the employee's absence, before deciding whether or not it would be reasonable to dismiss them.

If the employee is likely to be in prison for a long time, it may be fair for the employer to dismiss them on the grounds that they will be unable to perform the contract of employment (this could fall under the category of "some other substantial reason" for dismissal"). The employer must carry out a fair procedure and act reasonably in dismissing the employee for that reason.

Alternatively, the employer may be able to argue that the contract of employment has been frustrated. Frustration occurs where the contract comes to an end due to unforeseen circumstances that make it impossible for the parties to perform the contract. This is unlikely to apply for a relatively short prison sentence. Employers should be cautious of relying on the contract being frustrated rather than carrying out a fair procedure in dismissing the employee.

If the employee is imprisoned for a short time, for an offence that is unrelated to their work, it may be reasonable for the employer to hold the employee's job open until they return.