It’s not me… It’s you! Dismissing Employees

May 11, 2017
 
Wouldn’t it be wonderful if employees came to work to do their job?  And if, after acing the interview, they remained that proactive, engaging individual that you originally employed?

 

Unfortunately, this isn’t always the case and as a business owner, director or manager, you may find yourself trying to come up with the easiest way to part company with an employee when it’s just not working.  Whilst this is possible, it is extremely important for you to assess and reduce the risk of litigation from a disgruntled employee.

There are different types of dismissal, for example, dismissal for capability or conduct; gross misconduct; redundancy; mutual agreement.  There are a number of factors that determine the process that you would follow in order to reach a dismissal.

Employees With MORE Than 2 Years’ Service

There’s often a big difference between dismissing an employee with less than, and more than 2 years’ service.  The risks take on a new shape when dismissing someone with more than 2 years’ service.  There must be a potentially fair reason, it can be time consuming and it is a distraction for you and the business.  However, the risk of any kind of future litigation is significantly lower if a proper process is followed.

Employees With LESS Than 2 Years’ Service

Employees with less than 2 years’ service can be less tricky and less risky to dismiss and in some circumstances can be done without giving any reason whatsoever.  You may be able to just call the employee in and tell them it’s not working and you’re not going to continue their employment.  You can pay in lieu of notice (if this in in their contract) and there is no right of appeal.  The only situations where you must give written reasons is if the employee is pregnant, on maternity/parental/adoption leave.

However, just because an employee has less than 2 years’ service does not make it a completely risk free dismissal and prevent them for submitting a claim to employment tribunal for unfair dismissal.  There are certain rights that employees with no service have such as; working time regulations, statutory rights e.g. national minimum wage, whistleblowing.  They also have the right not to be discriminated against.  If there, or may be any protected characteristics that could give rise to a discrimination claim, a fair process should be followed.

Discrimination

This applies to workers and employees and even job applicants who haven’t even set foot through your door.  There are many cases of applicants filling out two separate applications with names suggesting they were from different ethnic origins to highlight discrimination.  One claimant applied for a number of jobs as a mechanic in his own name which suggested he was from an ethnic minority.  He then applied for the same jobs with the same detail on the forms apart from using a typical white female name.  The female named application was successful in getting to interview stage in most cases however, his own named application was not.  The gentleman submitted several claims to tribunal and was successful in the majority of them with the tribunal agreeing that he had been discriminated against because of his gender and ethnicity.

A protected characteristic will not always be obvious and just because you can’t see a connection between the reason for dismissal and the protected characteristic doesn’t mean that a disgruntled employee couldn’t assert it.  If the matter gets as far as a solicitor, they will be able to pick out an argument where you thought there was no argument to be had.

Even if it is clear to you that there is no connection, keep a paper trail.  Show your reasons for the decision, even if it’s something you file away just in case you need to defend your decision at a tribunal.  You can’t underestimate the importance of keeping records.

Breach of Contract

The contract is there to protect both parties.  It lays out the terms and conditions by which the contract should be carried out.  If you breach the contract, for example by not paying contractual notice or not following a contractual dismissal procedure, this can be classed as wrongful dismissal.

It is worth checking your employment terms and conditions and ensuring that the disciplinary procedure is not contractual.  If it is, it means that you have to follow the procedure in every eventuality, even if the person has one days’ service.  If you have the procedure separate, e.g. in a handbook, you are free to alter the procedure to suit the situation.

So if you breach contractual terms, what are the risks?  If the employee is successful at tribunal the remedy (what you would need to pay) would be the amount that restores the employee to the financial position they would have been in if the contract had have been carried out correctly.  If the contract was fixed term the amount would be equivalent to the earnings for the rest of that period.

The simple way to avoid a wages claim is to pay everything that is owed.  Don’t give the employee a chance to get their complaint under a solicitors nose where more arguments and claims could be found and the risk increased.

It has been known for employees to take out an injunction to force employers to correctly carry out the contract and follow the contractual disciplinary procedure.  This can be a lengthy process and the danger can be that the employee gains the two years’ service needed to claim unfair dismissal which creates a whole new world of risk.

Maybe you decide it’s worth taking the risk and not paying notice.  This can be particularly appealing if, for example, you have found that an employee has been sharing information with a competitor.  If you don’t pay the correct notice, you effectively breach the contract and therefore forfeit the right to enforce any post termination restrictions or restrictive covenants detailed in the terms and conditions of employment, such as not working for a competitor within certain radius of your company and/or for a certain amount of time after termination of employment with you.

Pay in lieu of notice (PILON) and Garden Leave

For senior employees, it is worth having a PILON clause or garden leave clause in their contracts.  PILON enables you to part company quickly and garden leave is useful to prevent employees from gaining employment with competitors for longer but keeps them out of your business.  Although if you’re parting company with an employee so early (within the first two years) they’re probably not that good at their job anyway.

Following Procedure (or Not!)

If the employee has less than two years’ service, you may decide not to follow any procedure.  Call the employee in, terminate employment and pay their notice.  You still need to assess the risk and whether they may be able to assert any discrimination or be able to claim for breach of contract.  However, this is a very quick fix and can get a problem employee out of your business quickly.

Alternatively, you can follow a procedure.  You would invite the employee to a meeting in writing detailing the possible outcomes, meet with them and once a discussion has taken place and you have allowed the employee to have their say, adjourn for a good amount of time so that you can show you are considering the decision.  You would then let them know the outcome, that they have right of appeal and hear this if you get it.  Everything should be confirmed in writing.  It takes time to go through the process properly and it can complicate things because it give the employee chance to raise issues e.g. bullying, that you may feel or would be obliged to investigate.

The manner in which you approach short service dismissals is up to you but when an issue such as bullying is brought to your attention you must deal with it.  Whereas if you just dismiss without any warning you don’t give the employee chance to raise issues.

Employment Tribunal Claims

You can’t stop employees from submitting a claim to tribunal, it is their prerogative.  However there are now more hurdles to get to tribunal.  The employee must first speak to ACAS Early Conciliation, a 30 day period where the ultimate aim is to settle the claim before it gets to tribunal.  This can mean paying some money to make it go away.  If a settlement isn’t agreed, the employee is issued a certificate to process and can then submit their claim to tribunal but they now have to pay for it.  They will need to pay between £160 and £250 to lodge the claim and then a further £230 to £950 to have their day in court depending on the type of claim.  It is also worth noting that when there is an unfair dismissal claim, if the tribunal deem that the ACAS code of practice has not been followed, they will automatically uplift any award by 25%.

Commercial realities will often dictate the way you will deal with an employee.  You may just need them out of the business before they do any more damage but it’s worth assessing the risk and possible pitfalls before you make a decision.

HELP

At HELP we are the experts so you don’t have to be.  We provide outsourced HR and Employment Law advice to businesses, from producing bespoke employment documentation to advising and guiding managers through HR issues, right through to employment tribunal representation.  As a client of HELP you are allocated your own commercially aware consultant who quickly gets to know you and your business.  We do not tie you into long term contracts so if at any point the service is no longer suitable to your business, you are free to leave at any time.

Why not give us a call today on 01543 431 050 or email hattie@helpgb.com to discuss how we can HELP you?

 

This post is in: Employee Relations Blogs, Employment Law Blogs, Featured, General, Honest Employment Law Practice

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