One of the NHS Band 6 Administrator's duties could be terminating and disciplining employees. If that will be one of your duties, that should have been mentioned in the job announcement. The interviewers ask this question to see if you have experience with terminating employees and, if so, how it went. They want to know you can handle this job duty professionally and compassionately.
Focus on being honest with the interviewers. If you have terminated employees, describe your experience. If you have not let an employee go, explain the steps you would take when that time comes. If you have specific training on terminating employees, highlight that in your response. If you have not directly released an employee but were present as a neutral third party during the termination, describe your role in that experience.