Many thanks for your patience. The most important thing to consider in these circumstances is the employee's length of service.
If an employee has been continuously employed with their employer for at least 2 years they will be protected against unfair dismissal. This means that to fairly dismiss them the employer has to show that there was a potentially fair reason for dismissal and that a fair dismissal procedure was followed.
According to the Employment Rights Act 1996 there are five separate reasons that an employer could rely on to show that a dismissal was fair: conduct, capability, redundancy, illegality or some other substantial reason (SOSR). The employer will not only need to show that the dismissal was for one of those reasons, but also justify that it was appropriate and reasonable to use in the circumstances. In addition, they need to ensure that a fair dismissal procedure was followed and that the outcome was one that a reasonable employer would have come to in the circumstances.
In this case you are most likely looking at using misconduct or performance as a reason to dismiss. However, be careful not to jump at dismissal straight away, unless you are confident he has committed an act of gross misconduct. That has to be something very serious and I am not 100% confident you can use the incidents so far. However, if things continue they way they are you can proceed to a more formal disciplinary action and for example issue him with formal written warnings, which can eventually result in dismissal.
The alternative is that you offer to pay him off to leave but you have to agree on a mutually acceptable deal for that to happen. However, if you make it clear that the alternative is eventual dismissal he may be more willing to consider it.
Does this answer your query?