Guide to Recruitment

This note identifies the potential pitfalls that an employer faces when it decides to recruit a new employee.

In addition to identifying those pitfalls it considers how they may be avoided by following best practice at each stage of the recruitment process.

Protecting the employer: paper trail and training

Good practice throughout the recruitment process should help avoid litigation. By ensuring they keep evidence of this good practice, employers should be better placed to show that they took reasonably practicable steps to prevent unlawful discrimination or harassment.

If they cannot avoid litigation, the employer should be able to bring it to an early conclusion or successfully defend themselves before an employment tribunal.

Creating a paper trail

Employers should ensure that they document the recruitment process so that there is a paper trail in the event of any complaint or litigation. It should be remembered that these documents, which should reflect the decision-making process in relation to the particular applicant, will be disclosed in any tribunal proceedings and so should be written clearly and objectively.

The EHRC Code suggests that every selection decision, from shortlisting to appointment, is equally important and recommends that employers keep records that will allow them to justify each decision, and the process by which it was reached.

These records should also demonstrate that a selection decision was based on objective evidence of the candidate’s ability to do the job satisfactorily, and not on assumptions or prejudices about the capabilities of certain groups of people sharing protected characteristics.

The paper trail should include:

• Applicable recruitment and/or equal opportunities policies (which have been followed throughout the recruitment exercise).
• Job description.
• Person specification.
• Selection criteria.
• Any written test.
• Notes of the shortlisting process (including handwritten notes or score sheets).
• Interview questions.
• Notes of interview.
• Minutes of any interview panel discussions or decisions following interviews.
• Records that show all those involved in the recruitment process had received appropriate training beforehand.

The EHRC Code notes that employers need to keep records to justify decisions, including in response to discrimination questionnaires and legal claims, but must balance this with their obligations under the data protection legislation to keep personal data for no longer than is necessary. This will usually be around 6 months after the closure of the recruitment exercise.

In addition to keeping relevant recruitment records, the EHRC Code also recommends that employers should retain any monitoring information requested for equality purposes as general statistical data.

This can be used to monitor short and long-term trends in the employer’s recruitment process and, provided it does not directly or indirectly identify individuals, there should be no data protection issues in keeping and using this data.

Participants in the interview process

The key points for those involved in interviewing are:

• Recognise when they are making stereotyped assumptions about people.
• Apply a scoring method objectively.
• Prepare questions based on the person specification, and the information in the application form.
• Avoid questions that are not relevant to the requirements of the job.

The recruitment process: practical steps

Consider the role

The employer should also consider whether the job needs to be performed on a full-time basis or whether it is open to job-sharing, part-time working or homeworking and whether the appointment is to be made on an indefinite or a fixed-term basis.

The employer should be confident of explaining any requirement for a job to be performed on a full-time basis (given that such a requirement may be challenged as being discriminatory by those who, for example, need to work flexibly or on a part-time basis because of childcare commitments).

Preparing the job description and person specification

Before advertising its vacancy, the employer should draw up a detailed written job description and person specification.

This will not only focus the employer’s mind on the skills and experience required for the vacant job and that it wants candidates to demonstrate but, in documenting those requirements, the employer will also demonstrate its objective approach (not influenced by any unlawfully discriminatory considerations).

It is good practice for job descriptions and person specifications to be reviewed at regular intervals (and at least before a recruitment exercise) to ensure that they are accurate and up to date.

For more guidance on job descriptions click >>here<<

Person specifications

A person specification describes the skills, knowledge, abilities, qualifications, experience and qualities that are considered necessary or desirable in a candidate, in order to perform all the duties in the job description satisfactorily.

Those criteria must not be discriminatory and one of the best ways of avoiding discrimination claims is by ensuring that any necessary or desirable criteria can be justified for the particular job in question.

Otherwise there is a risk that criteria that may be directly discriminatory unless they are related to occupational requirements or those that are less likely to be met by people with certain protected characteristics may be indirectly discriminatory unless they can be objectively justified.

For some guidance on person specifications click >>here<<

Occupational Requirements and Positive Action

In some limited circumstances it is permissible to treat a group with a protected characteristic more, or less, favourably.

For guidance on occupational requirements and positive action click >>here<<

Advertising the vacancy

An employer must not discriminate in its arrangements for advertising jobs or by not advertising a job. Neither should they discriminate through the actual content of the job advertisement.

Managers will need to decide whether to advertise posts internally and/or externally. Many employers, particularly public or quasi-public authorities advertise all posts externally to ensure compliance with their specific equality duties and to ensure that as wide a pool of candidates as possible is reached.

There will be situations where it is acceptable not to advertise externally. For example, during a redundancy exercise, in order to ensure a fair and reasonable redundancy procedure, an employer is obliged to consider alternative employment opportunities for those employees selected for redundancy (see Practice note, Redundancy (3): alternative employment and trial periods).

This obligation is extended in relation to employees selected for redundancy whilst on maternity leave and shared parental leave as they have the right to be offered suitable vacancies.

The practice of recruiting on the basis of recommendations made by existing staff, rather than through advertising, can lead to discrimination. Where a workforce is drawn largely from one racial group, this practice can lead to the continued exclusion of other racial groups. Wide advertising will enable an employer to select staff from a wider, more diverse pool.

Before deciding only to advertise a vacancy internally, an employer should consider whether there is any good reason for doing so. If the workforce is made up of people with a particular protected characteristic, advertising internally will not help diversify the workforce. If there is internal advertising alone, this should be done openly so that everyone in the organisation is given the opportunity to apply.

Those absent from work, including those on maternity leave, long-term sick leave, part-time and remote workers, should be informed of any jobs that become available so they can consider whether to apply.

Inviting applications: application forms and CVs

The EHRC Code recommends that employers should adopt a “standardised process” whether through use of an application form or using CVs, in order to make an objective assessment of an applicant’s ability to do the job, to enable applicants to compete on equal terms with each other and in order to assist the employer to demonstrate that it has assessed applicants objectively.

The EHRC Code gives the following example: An application form asks applicants to provide 400 words stating how they meet the job description and person specification. Applicants are marked for each criterion they satisfy and short-listed on the basis of their marks. This is a standardised application process that enables the employer to show that they have assessed all applicants without discriminating.

Where they are used, application forms (both paper and electronic) should obtain the essential information needed to sift out unsuitable candidates and decide on the best short-list for interview.

Employers should review their application forms periodically, as part of their equal opportunities review of their recruitment processes, to make sure they do not contribute to any significant disparities between the success rates for different groups of people sharing protected characteristics.

Where they are used, recruitment and employment agencies should have copies of an organisation’s equality policy and an understanding of its recruitment policies and the role of its application form in the recruitment process.

Any questions on an application form about protected characteristics should include a clear explanation as to why this information is needed, and an assurance that it will be treated in strictest confidence. These questions should only be asked where they reflect occupational requirements for the post and then should only seek as much information as is required to establish whether the candidate meets the requirement.

The EHRC Code suggests that applicants should not be asked to provide photographs, unless it is essential for selection purposes, for example, for an acting job; or for security purposes, such as to confirm that a person who attends for assessment or interview is the applicant.

Applications and reasonable adjustments

Where written information is provided about a job, it is likely to be a reasonable adjustment for an employer to provide that information in an accessible format where it is requested.

Provide and accept information in accessible formats, such as email, Braille, Easy Read, large print, audio format and other data formats, where this would be a reasonable adjustment.

Where an employer invites applicants to complete and submit application forms, it is likely to be a reasonable adjustment for them to provide forms and accept applications in accessible formats. However, an applicant might not have the right to submit an application in their preferred format (such as Braille) if they would not be substantially disadvantaged by submitting it in some other format (such as email) which the employer would find easier to access.

Since the duty to make reasonable adjustments is not anticipatory, employers do not have to keep stocks of job information, job descriptions and person specifications in accessible formats, unless they are aware that these will be in demand.

However, employers should prepare themselves to be able to react to a request for a document in an accessible format quickly, allowing that candidate to have their application considered at the same time as other applicants. Otherwise, employers may need to make a further adjustment of allowing extra time for that candidate to complete and return the form, if the applicant has been put at a substantial disadvantage.

Criminal Convictions

The employer should only request information about an applicant’s criminal convictions if and to the extent that the information can be justified in terms of the role offered.

If this information is justified, the employer should make it clear that spent convictions do not have to be declared, unless the job being filled is covered by the Exceptions Order to the Rehabilitation of Offenders Act 1974.

For more information on Disclosure and Barring Service (DBS) checks click >>here<<

Equal opportunities monitoring

Equal opportunities monitoring forms should be separated from application forms prior to the shortlisting process so that the information provided by applicants has no influence on the process.

Selection: shortlisting and interviewing

Once an employer’s deadline for the submission of applications has passed, the next stage of the recruitment process is to select a preferred candidate from the group of people who have applied for the job.

The selection process may involve a number of stages depending on the nature of the vacancy and the employer’s size and administrative resources. Those stages could involve:

• Shortlisting
• Selection tests
• Assessment centres
• Interviews

Whichever selection process it decides on, an employer must ensure that its process is fair, consistent and results in the appointment of the best person for the job.

Employers should ensure that, as far as possible, arrangements for holding tests or interviews, or using assessment centres, do not put any candidates at a disadvantage in connection with a protected characteristic.

To ensure consistency the same staff should be responsible for selection decisions in any given recruitment exercise and they should be trained on the employer’s equality policy and its application in the recruitment exercise.

Shortlisting: undertaking a shortlisting exercise

Many employers, particularly in the public sector, appoint a panel of managers to sift through applications by applying objective selection criteria (based on the job specification and person specification) to each application.

Using more than one person to consider the applications reduces the risk of one person taking an unbalanced or overly subjective decision about an applicant. It also permits debate amongst the panel on borderline candidates.

This can be time-consuming and possibly not feasible or practical for smaller employers which may only be able to allocate one manager to the sifting of applications.

The panel should agree in advance the weighting to be given to each criterion (and/or answer to questions from the application form). It is also advisable to agree on what would constitute a minimum score in order to qualify for an interview and a maximum number of candidates to be interviewed (although this may be open to review once the scores have been ascertained).

All applications should be marked consistently, and each panel member’s scores can then be added together and an overall score awarded. Care should be taken that shortlisting criteria are not indirectly discriminatory.

• Wherever possible, more than one person should be involved in shortlisting candidates, to reduce the chance of one individual’s bias prejudicing an applicant’s chances of being selected.
• The marking system, including any cut-off score for selection, should be agreed before the applications are assessed, and applied consistently to all applications.
• Where more than one person is involved in the selection process, each person should mark the applications separately, before agreeing to a final mark.
• Selection should be based only on information provided in the application forms (where one is used), or in any formal performance assessment reports, in the case of internal applicants.
• The weight given to each item in the person specification should not be changed during shortlisting; for example, in order to include someone who would otherwise not be shortlisted.

Using written or psychometric tests

Employers are increasingly using psychometric testing, which tests aspects of personality and intelligence, or biodata which tests biographical data.

Thought needs to be given to whether tests such as these are necessary and proportionate, will involve any invasion of privacy, how feedback may be given, and how the data generated is to be stored.

Unpaid work trial periods

The length of time that a trial lasts should be limited to that reasonably necessary for the employer to assess an individual’s ability to do the job on offer.

The government takes the view that in all but very exceptional circumstances an individual undertaking work in a trial lasting more than one day is likely to be entitled to the NMW (NLW).

Interviews

Once a shortlist has been produced, the employer should consider whether it is going to have an interview panel or whether an individual manager will interview on their own.

With a smaller employer, a panel may not be practical or feasible and with a junior role may not be necessary.

The EHRC Code suggests that by conducting interviews strictly on the basis of any application form, job description, person specification, the agreed weight to be given to each criterion and the results of any selection tests, an employer will ensure that all applicants are assessed objectively, and solely on their ability to do the job satisfactorily.

Arranging for interviews to take place

Employers should try to be flexible about arrangements made for interviews and should consider in advance where the interviews are to take place and whether, for example, they have wheelchair user access or they need to arrange facilities to assist candidates with sight or hearing impairments.

The timing of interviews may also need to be considered for example for a candidate with a medical condition which means that particular times of the day are better for them or a candidate who needs to pray or be home at certain times for childcare or religious reasons.

Indirect sex discrimination issues can also arise, for example, in the case of the timing of an interview for a candidate who has to drop off children on the way before she can attend for interview.

Asking questions at interview

An interview is likely not only to be the decisive stage of the selection process but also the stage when it is easiest to make judgments about a candidate based on instant, subjective and sometimes wholly irrelevant impressions. If assumptions about the capabilities or characteristics of people from a particular group of people sharing protected characteristics contribute to an unfavourable impression, this could lead to an unlawful discriminatory selection decision.

It is therefore important to avoid irrelevant questions at interview that relate to protected characteristics. For example, questions about childcare arrangements, living arrangements or plans to get married or to have children. Where such information is volunteered, selectors should take particular care not to allow themselves to be influenced by that information.

A woman is under no obligation to declare her pregnancy in a recruitment process. If she volunteers that information it should not be taken into account in deciding her suitability for the job. An organisation only needs to know if the person can do the job and if they are willing to do the job. Assumptions should not be made about who will and who will not fit in with the existing workforce.

Giving feedback to unsuccessful applicants

The EHRC Code recommends that, having secured a preferred candidate, it would be good practice for employers to offer feedback to unsuccessful shortlisted candidates if this is requested.

Feedback can be written or oral and should be provided in a sensitive manner, with any negative comments or criticisms relating directly to the applicant’s failure to meet the requirements of the role or the person specification.

A feedback response could prove to be a critical document in an employment tribunal claim and so feedback should also be capable of being supported objectively before a tribunal panel.

An employer’s failure to give feedback following a request by an unsuccessful applicant can give rise to an implication that the reason for rejection is a discriminatory. Therefore managers should ensure that they respond to requests for feedback promptly and in accordance with any relevant policy.

Making an offer of employment

Once it has identified the successful candidate, the employer is likely to write to make an offer of employment or, where they have initially spoken to them, to confirm the offer. In doing so the employer is likely to address the following matters:

• The job title of the job that is being offered, any particular features of the job such as it being for a fixed-term or a part-time position, and the starting salary.
• The terms of employment either as set out in the offer letter and/or in an enclosed contract.
• If there have been any discussions or negotiations about the job, in order to avoid any confusion, the employer may wish to state that the offer on the terms provided supersedes any previous discussions.
• Any conditions to which the offer is subject, for example, receipt of satisfactory references.
• Any time scale within which conditions need to be satisfied and the employee needs to confirm acceptance of the offer (often by returning a signed copy of the letter and/or enclosed employment contract).

The legal status of an offer letter

The employer needs to consider whether the offer letter will form part or all of the contractual terms (once accepted by the employee) or whether the employer intends to have a separate, more detailed contract of employment which will be provided to the employee for acceptance (usually confirmed by signature).

If the offer letter is to comprise the entire contract then it is important to check that the offer letter contains all the relevant terms of employment and expressly incorporates any other documents which may contain contractual terms, for example, a staff handbook.

If the offer letter is to be superseded by a more detailed written contract of employment once the employee starts work, then the employer may wish to make the offer of employment conditional on the signing of the full contract and acceptance of its terms (by marking the offer letter “subject to contract”).

This will prevent an employee arguing that the employer is unilaterally trying to change the terms agreed in their offer letter. An employee is likely to want to see the full contract before they start work (or resign from existing employment).

A common problem occurs when there are inconsistencies between an employee’s offer letter and their terms of employment. The contract should make it clear that in the event of any inconsistency, it is the contract terms which will prevail.

It may also be useful to include an “entire agreement” clause in the contract which records that the document contains the entire agreement as to the employee’s terms of employment (if this is the case) as this will prevent an employee subsequently arguing that they are entitled to contractual terms other than those set out in the offer letter or contract.

For the same reason it may be advisable to include a provision in the offer letter or contract which states that the employee has not relied on any oral or written representations which are not contained in the offer letter or contract, to head off a misrepresentation claim that, for example, they were promised a particular promotion at interview and that was the reason they accepted the offer of employment.

Written particulars of employment

The offer letter/contract needs as a minimum to contain the written particulars required under section 1 of ERA 1996.

Setting pay

When identifying the starting salary for a new employee, an employer must ensure they meet the requirements of the following:

• Equal pay and contractual terms. Employers must comply with the requirements for equality of pay and other terms of the contract, avoiding direct or indirect discrimination between men and women when setting pay and other terms for like work, work rated as equivalent or for work of equal value, as set out in the Equality Act 2010.
• Pro-rata for part-time positions. Employers should also ensure that they comply with the Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000 (SI 2000/1551) and apply the pro rata principle when setting the pay of part-time workers so that, for example, someone working two days a week should get 2/5 pay.
• National minimum wage. The national minimum wage (NMW) was introduced by the National Minimum Wage Act 1998 and gives workers the right to a specified minimum hourly rate of pay, which is regularly updated.

Making an offer subject to conditions

The employer needs to consider whether the offer of employment should contain any conditions precedent. Any matters that an offer of employment is made conditional upon must be made clear to the employee. They are usually included in the offer letter and commonly include:

• Receipt of references which are satisfactory to the employer
• Confirmation that the employee is free to work in the UK or has the appropriate immigration approval to work in the UK
• Receipt of a medical report or completed medical questionnaire which is satisfactory to the employer (but see below)
• Confirmation that the employee holds the qualifications they claim to have…
• that they are free from any restrictions from previous employment that would prevent them from starting work as proposed by the employer and,
• where they are to hold office as a director, confirmation that they are not subject to any restrictions that would prevent them from doing so
• Receipt of background checks required professionally or due to the nature of the job that is being offered

If the employment contract includes an entire agreement clause then the employer must ensure that the conditions are satisfied before entering into the contract.

Employees from overseas

For guidance on employing those from overseas click >>here<<

References

Offers of employment should usually be made conditional on receipt of a references which are satisfactory to the employer, so that no employment contract exists until the satisfactory reference is received.

If this condition is not included and an unsatisfactory reference is received, the employer may, if it wants to rescind the offer, be obliged to give contractual notice to the employee or make a payment in lieu of notice (see Withdrawing an offer, below).

The EHRC Code recommends that references should not be obtained and circulated to members of the selection panel until after a selection decision has been reached.

This can help ensure that the selection decision is based strictly on objective criteria and is not influenced by other factors, such as potentially subjective judgments about a candidate by referees.

It also recommends that an employer should send the referee copies of the job description and person specification, requesting evidence of the candidate’s ability to meet the specific requirements of the job. This is more likely to ensure that the reference focuses on information that is relevant to the job (paragraph 16.65).

The information requested in a reference varies. It is common to ask for information such as the:

• employee’s dates of employment,
• role (including any past roles),
• salary,
• sickness record and
• disciplinary record.

It may also be useful to request confirmation of the dates of any parental leave taken (since the employee’s statutory entitlement to parental leave of 18 weeks per child is aggregated across employers.

However, employers may be unwilling to give all of this information. Some employers have a policy of only confirming dates of employment and role.

Generally an existing employer is under no general legal obligation to provide a reference (or to include specific information).

While following up on references from previous employers is an important precaution, it may not always produce a completely satisfactory explanation about an employee’s reason for leaving a previous job.

For example, the employee may have left their previous employment under the terms of a settlement agreement, which may include an agreed reference and a prohibition on the employer saying anything further about the employee’s history or the reason for departure.

Medical reports and questionnaires

Depending on the nature of the role, an offer of employment may be conditional on receipt of a satisfactory report or medical questionnaire.

Employers may need medical evidence to be sure that a job applicant is physically able to undertake the role, to avoid the risk of employing someone who may be or may become unable to work because of ill health or for the purposes of admission to an employer’s health insurance scheme.

There may be fitness requirements for a strenuous role, or a need to test vision for a role which requires a particular level of eyesight. More generally medical evidence may be required to test the general health of an applicant for a very senior management appointment.

These tests may give rise to data protection issues as asking for and obtaining any medical information will involve processing special category data (see Data protection issues).

The candidate will need to give their consent under the Access to Medical Reports Act 1988 if a medical report is requested from their own doctor.

In addition, section 60(1) of the EqA 2010 provides that, other than in limited circumstances set out in section 60(6),

• a person (A) to whom an application for work is made must not ask about the health of the applicant (B) either
• before offering work to B or,
• where A is not in a position to offer work to B, before including B in a pool of applicants from whom A intends (when in a position to do so) to select a person to whom to offer work.

Alcohol and drugs testing

For guidance on testing for alcohol or drugs click >>here<<

Verifying the content of an applicant’s CV

As well as checking references, an employer may also wish to verify other factual data provided by the employee such as academic qualifications.

The employer may wish to ask to see original certificates, for example either before an offer is made or as a condition of the offer.

Restrictions from previous employment

The employer may wish to check that there are no restrictive covenants in the employee’s existing contract of employment that would prevent the employee starting work with the employer.

The likelihood of this being the case will often depend on the industry in which the employer operates.

If the employee is subject to restrictive covenants and breaches them by starting to work for the employer, the employer could be the subject of a claim for inducing a breach of contract.

Therefore, the employer may want to see a copy of the employee’s current contract and take advice on the effect of any restrictions or it may ask the employee to warrant that they are free from any restrictions that would prevent them from accepting the job offer.

Industry requirements

Depending on the nature of the employer’s business there may be specific industry requirements which the applicant must meet before they start work.

Credit checks

Pre-employment credit checks are not prohibited by law but should be proportionate to the role applied for.

Credit checks are considered by the Information Commissioner to be “vetting” which should only be used where there is no less intrusive and reasonably practicable alternative.

It is likely to be appropriate to carry out credit checks for a role that involves the prospective employee handling cash or accounts or working for a financial institution (where a bad credit rating could compromise organisational integrity) but not otherwise.

Withdrawing an offer

The employer may wish to withdraw an offer of employment for a number of reasons, for example, because:

• Its business requirements have changed
• It has unexpectedly received information about the applicant which casts doubt on the desirability of employing them
• One of the matters on which the offer was expressed to be conditional, such as receipt of satisfactory references, has not been fulfilled

However, if it withdraws an offer, the employer should be prepared for the disappointed applicant to allege that the employer’s reason for doing so was unlawful (for example, that it was an act of discrimination).

Therefore, employers should document their reasons for withdrawing an offer and retain documentary evidence that supports the reasons for its decision.

Unless the employee has previous relevant continuous service (for example with the same or an associated employer) they will not have sufficient continuous service to bring an ordinary unfair dismissal claim.

However there are exceptions, for example, claims for automatically unfair dismissal where an employee does not need to fulfil any qualifying period of service to bring an unfair dismissal claim. Employers must also be careful not to terminate the contract for a discriminatory reason.

The withdrawal of an offer may also have implications in contract law since an employee may have a claim for breach of contract if the offer is withdrawn after it has been accepted.

Before acceptance by the employee

Applying normal contractual principles, an offer of employment can be withdrawn at any time before it has been accepted by the employee. The employer will need clear evidence that it withdrew the offer before the employee had purported to accept it.

After acceptance by the employee

Once any conditions to which the offer was made subject have been satisfied and the employee has accepted the offer, a contract of employment will be in existence. In these circumstances, the only way for the employer to terminate the contract is to give the employee the notice to which they are entitled under the contract.

Failure to do so will be a breach of contract, for which the employee can sue either in an employment tribunal or in the civil courts.

The employee’s loss in respect of such a breach of contract will normally only begin to accrue after the date on which their employment was due to start (because the employee will not generally be entitled to any benefits before they start work). Therefore, if the employee has a four-week notice period, but the employer wrongfully terminates the contract one week before the employee was due to start work, damages will normally be limited to three weeks’ earnings.

The situation may be more complicated if the contract makes provision for a probationary period during which employment can be terminated on shorter notice.

Withdrawal by the employee

As discussed above (see After acceptance by the employee), once an employee has accepted an offer of employment, and any relevant conditions have been satisfied, a contract of employment will be in existence.

If the employee changes their mind and decides to retract their acceptance of the offer, they will be required to terminate the contract by serving the minimum period of notice under the contract. A failure to do so will mean that the employee is in breach of contract, and the prospective employer will have a potential claim against the individual.

However, it is rare for an employer to bring a claim against an employee in this situation, since the employer is likely to find it hard to show what loss it has suffered as a result.

In some cases, prospective employers may try and guard against the possibility of an employee’s withdrawal by including a “no show” clause in the contract of employment.

Discovering an employee has lied during the recruitment process

If an employer makes an offer of employment or enters into a contract of employment and subsequently discovers that the employee lied on their CV, job application or in other pre-employment information provided, it may wish to retract the offer or terminate the employment contract.

On the basis that the employer makes this discovery after the employment contract has started, it may be able to dismiss in one of the following ways:

Dismissal without notice. This will be justifiable where the dishonesty is significant enough to amount to a repudiatory breach on the part of the employee, entitling the employer to treat the conduct as a breach of trust and confidence which brings the employment relationship to an end

Dismissal with notice. The employer could terminate by serving notice in accordance with the terms of the contract (or statute if the contract is silent regarding notice). In practice, it is likely the grounds for such a dismissal would be misconduct.

An employer should bear in mind that if it dismisses in breach of contract it will be liable for damages for that breach.