Summary Dismissal

Summary dismissal is the immediate termination of an employee's contract. In most cases, the reason for summary dismissal is gross misconduct on behalf of the employee. 

The Difference between a Dismissal and Summary Dismissal

The regular dismissal process includes prior notice from the employer to the employee. According to current legislation, the period amounts to one week for each year the employee has been with the company, up to twelve. On top of that, the employer owes payment for the dismissal. In the case of summary dismissal, the employer doesn't need to give  notice for the termination. They don't owe payment either.

Employer's Obligations Regarding Summary Dismissal

Every employer needs to describe in detail the reasons for potential summary dismissal in the employee handbook. They have to do the same in the employment contracts they sign with team members. If the employer fails to do it, the employee can protest their summary dismissal. In some cases, such disputes can escalate and even end up in court. 

Lawful Reasons for Summary Dismissal 

In many cases, it is up to the employer's discretion to determine which zero-tolerance behaviors lead to summary dismissal. Federal and most current state legislation mentions the following lawful reasons for summary dismissal:

  • Disregard of safety protocols and health regulations
  • Damage of company property
  • Attendance while under the influence of alcohol or drugs
  • Instances of discrimination, harassment, or violence towards co-workers and clients
  • Acts of theft, bribery, fraud, or sabotage
  • Substantial insubordination

Actions like discrimination or harassment are pretty straightforward. Other items on the list may fall into a grey area. For instance, in addition to going to work intoxicated, many businesses prefer their employees not to engage in drug and alcohol use, even off duty. They require employees to go through drug and alcohol tests before signing their contracts. Frequent drug tests during work hours aren't an exception as well. It is up to the business owner to specify the reasons for the summary dismissal of their employees. That is why contracts need to describe at length the potential scenarios in which such drastic measures can occur.

Other Potential Reasons for Summary Dismissal

The type of business may determine other potential lawful reasons for summary dismissal. For instance, in an IT company, the disregard of software security protocols may lead to immediate termination. Stockbrokers who use company information and resources to trade on the side face immediate termination as well. Some companies implement a morality clause in their contracts. This clause may feature various sub-clauses, like a prohibition of viewing pornographic materials while on duty. Tarnishing the company's reputation is often deemed as a just cause for summary dismissal, as well.

Unlawful Summary Dismissal

When the reason for summary dismissal doesn't qualify for gross misconduct, the procedure may be unlawful. There are actions that some employers use as a justification for summary dismissal, like:

  • Performance below the company's standards
  • Regularly coming in late for work
  • Bad personal hygiene
  • A high number of absences
  • Wearing distracting outfits or having a "loud" personality

According to the current legislation, none of these are grounds for summary dismissal. Employers who try to justify the immediate termination of an employee with one of them face lawsuits. There is a high chance that the employee wins in court. 

Proper Summary Dismissal Procedures

Employers who plan on resorting to immediate termination of an employee's contract need to follow certain guidelines to make sure they are on the right side of the law. 


They should establish the facts of the gross misconduct and check for potential mitigating circumstances. Summary dismissals are generally urgent matters. It is best to start the investigation as soon as the suspicion for gross misconduct arises. The process involves taking statements from the employee, as well as their coworkers. Any documentation, video, and other evidence need to be considered. 


The employee facing a summary dismissal has to be suspended, pending the outcome of the investigation. Any other disciplinary processes should happen only under extreme circumstances. All suspensions, including payment, need a written explanation to the employee. 

Disciplinary Hearing

The employee has to receive a written invitation to the hearing. They also have the right to be accompanied by a legal representative. During the hearing, the employer has to inform the employee about the reason for the procedure and the evidence collected. The employee or their companion has the right to plead their case. 

The employer makes their decision for summary dismissal based on the evidence and the explanations the employee gives.


The employee should receive a written notification about the outcome of the hearing. They have the right to appeal any summary dismissal because they:

  • Feel the investigation has been unfair.
  • Have new evidence to present.
  • Consider the summary dismissal an unjust punishment for their misconduct.

Keeping a detailed and accurate record of all procedures is the responsibility of the employer. The written accounts may act as evidence should the employee protest their summary dismissal in court.

Related terms

Employer Value Proposition

The employer value proposition (EVP) represents the culture and value of a company. It also states the benefits employees get while working at the company. Growth opportunities, chances for learning, and development are all part of the employer value proposition. The EVP is crucial to any business's brand. Studies show that organizations with a well-tailored employer value proposition are five times more successful in attracting talent. 


SDI tax is short for State Disability Insurance tax. A few select states have implemented this payroll tax. SDI tax money collected goes into a state fund. This fund is set up to support individuals who can no longer work due to disability, which can be either physical or mental disability unrelated to their profession.

Imputed Income

Imputed income is any taxable non-cash compensation an employee receives. The imputed income is considered a "fringe" benefit. The term encompasses any taxable addition to an employee's regular salary. Because the benefit was received in another form, the imputed income isn't a part of the net income. Unless specified, the imputed income becomes part of their gross income instead. There is a section in the W-2 tax form reserved for imputed income. 

Making Announcements

Having a new employee start work in your business is a big day, not just for the new employee but for everyone else in the organization. An introduction email for a new employee is a great way to get the ball rolling and plays a critical role in the onboarding process.