There is a feeling out there noticeable in my work particularly with small and medium sized employers that it is just about impossible to dismiss staff if they are not working out for whatever reason. This is really not the case, and as long as this is done in a fair and justifiable way you need have no fears.
The fair reasons in law for dismissal
1. Conduct – where an employee breaks the terms of their employment contract through such things as continually missing work, poor discipline or theft / dishonesty etc. In order to dismiss using conduct, you really need to demonstrate that you have properly followed a fair procedure, and so it is important that you have a disciplinary procedure, which should be in line with the ACAS Code of Practice. Often the difficulty is in deciding whether the misconduct merits dismissal or not. Generally it is safest to apply a warning – either a first warning, or where the misconduct is more serious (or where a first warning already exists) a final warning. However for gross misconduct where the act is so serious it obviously warrants dismissal, it is ok to do so; just be sure you properly investigate and go through your disciplinary procedure first.
2. Capability – where an employee is unable to perform to the required standard for reasons such as inability to deal with new technology, inability to get along with fellow workers, or long-term persistent illness. (However if the long-term illness relates to a disability you have a legal obligation to make ‘reasonable adjustments’ to help the individual to work). This can be a tricky one to get right, and it is advisable to ensure you have a Capability Procedure in place which meets best practice. This will ensure that you have properly defined the problem, outlined the required improvements, and given the individual time and opportunity to improve. These timescales do not need to be elongated if the individual’s capability is seriously impacting on the business.
If you have an employee giving you conduct or capability problems – our book may be of some help: “How to Deal with Staff who Can’t or Won’t Perform”
3. Redundancy – where there is no longer any, or enough, work for the employee in your workplace. Although not as difficult as some think, it is important to get the process right, in particular selection for redundancy. If you are moving to a situation where you will be making staff redundant, you really must implement a Redundancy Policy, and agree this if possible with any recognised trade unions. You will need to decide whether you wish to offer voluntary redundancy, or whether you need to move to making staff compulsorily redundant. There is useful guidance on making staff redundant on the Government Business Link site.
If you plan to make 20 or more employees redundant in one place of work within a 90-day period – a collective redundancy situation – you must:
- Notify the Department for Business, Innovation & Skills (BIS) using form HR1.
- Consult with workplace representatives. These may be either trade union representatives and/or, elected employee representatives for those employees not represented by a union. If your employees choose not to elect employee representatives, you must give the relevant information directly to each individual.
5. Illegality or contravention of a statutory duty – you can fairly terminate if continuing to employ would break the law, for example you employ a driver on driving duties who loses his licence, or you find an individual does not have an appropriate visa to work in the country. If possible, you would be expected to look for alternative employment before dismissal.
6. Another Substantial Reason – this is a general catch-all of other reasons – these can be such things as imprisonment of the employee, an unresolvable personality conflict etc. Generally this reason for dismissal should not be relied on where possible as it is often more difficult to prove a ‘substantial’ reason.
Please Note: Retirement – The Default retirement age came to an end in 2011, and so there is now no automatic age when you can insist your staff retire. There is more information from ACAS here.
If you end up at an Employment Tribunal, what are your risks?
If an employee decides to claim unfair dismissal, ACAS will contact you to see if things can be worked out by conciliation. This is a first chance to look at the circumstances of the dismissal; if you feel you have got things wrong, ACAS can help to sort it out. If however you decide you have made a justifiable decision, you can defend your decision at the Employment Tribunal. This is not something to be unduly worried about, and you do not need to employ an expensive lawyer or HR consultant to do this for you. The Tribunal will make allowances for your lack of experience.
Where an employment tribunal decides that an employee has been unfairly dismissed, it must award a basic award and may also award a compensatory award.
Basic Award
For each year of employment (subject to a maximum of 30) those employees deemed unfairly dismissed:
– over the age of 41 are entitled to 1.5 weeks pay;
– between the ages of 22 and 41 are entitled to 1 weeks pay; and
– under 22 are entitled to 0.5 weeks’ pay.
The current weekly maximum (from April 2018) is £508 with a total maximum basic award of £15,240. This multiple may be increased (higher basic awards) where employers fail to comply with an employment tribunal order as to reinstatement or re-engagement. If an employee contributes to their own dismissal or refuses reinstatement, the basic award can be reduced or extinguished.
Compensatory Award
In addition to the basic award, the employment tribunal can also award a compensatory award to take into account loss of net earnings (immediate and future), pension rights and other fringe benefits e.g. company car, and expenses. The current ceiling on any compensatory award (from April 2018) is £83,682. An employer’s failure to follow proper disciplinary and dismissal procedures as set out in the ACAS Code of Practice on dismissing an employee can lead to an increase of up to 25% in the amount of compensatory award which would otherwise be payable.
Conclusion
If you implement and follow proper procedures it is unlikely an Employment Tribunal will find against you. If they do, demonstrating responsible use of proper procedure will help to minimise any costs against you.
(Article updated March 2018)
Leave a Reply