Taking the decision to terminate an employee can be a stressful one. How do you make sure you have a legitimate case? What’s the correct way to dismiss them to avoid being landed with an employment tribunal hearing? In this week’s blog we aim to shed some light on the factors you need to consider and will also explain the correct procedure to dismiss an employee safely.
What is dismissal?
Firstly, let’s look at the term dismissal. Dismissal is when you end an employee’s contract. There are many different kinds of dismissal including:
• Fair: You have a valid reason for dismissing someone such as redundancy, they committed gross misconduct, they are incapable of, or something prevents them legally being able to, do their job, e.g. they have lost their driving licence.
• Unfair: An employee can claim unfair dismissal and take you to an employment tribunal if they think the reason was unfair, you acted unreasonably or the reason you gave for dismissal wasn’t the real one. There are many reasons that are automatically deemed unfair: these include any discrimination over age, gender or race, pregnancy, acting as a trade union representative, joining or not joining a trade union and many more. You can find out more about unfair dismissal here
• Constructive: When an employee resigns because you’ve breached their employment contract. This could be because you cut their wages without agreement, unfairly increase workload, make them work in dangerous conditions for example.
• Wrongful: Wrongful dismissal is when you break the terms of an employee’s contract during the dismissal process. For example, dismissing someone without giving them propert notice.
What’s the difference between fair and unfair dismissal?
The difference between a fair and unfair dismissal rests entirely on two points; the reason for dismissal and how you act during the dismissal process. You must act ‘fairly’ and ‘reasonably’ and the law has very specific ways of defining these terms. To dismiss fairly you need a ‘fair’ reason such as conduct, behaviour, capability redundancy, breach of statutory restriction or some other substantial reason, such as a restructure. Even if you terminate via a fair procedure, if the reason isn’t ‘fair’ then the dismissal will be deemed unfair.
If your reason is fair, you must then act ‘reasonably’ before you terminate someone. This means you must investigate properly, consider alternatives and be consistent with how you have treated other employees. If you are dismissing an employee because of misconduct, you must conduct a thorough investigation before holding a disciplinary hearing and ensure they have the right to appeal your decision.
How to stay safe
To terminate an employee should be considered as a last resort. You should consider all possible alternatives before taking the decision to terminate. These alternatives will differ based on the particular issue you have with the employee. For example, if you are considering dismissing because of ill health, you should consider how you could get the employee back to work. You may need to consult their doctor, arrange an occupational health assessment or make adjustment to their role/work space if they are suffering from a disability. If on the other hand performance is the issue, then the employee must be warned about their short comings and given the time and support to improve.
If you make sure you act fairly and reasonably at all stages of the process, and have a legitimate reason for termination you should be safe from the penalties you may be concerned about from an employment tribunal. The ACAS (Advisory, Conciliation and Arbitration Service) code of practice has set out clear advice to business owners on how to dismiss someone properly. You can download the full code of practice here.
The implications of getting it wrong
If you are taken to an employment or industrial tribunal for unfair or wrongful dismissal the penalties could be considerable. You may be ordered to reinstate the employee into their previous position or ‘re-engage’ them, (re-employ them in a different job). You may have to pay compensation which varies depending on the employees age, gross weekly pay and length of service. The compensation a tribunal can award is limited unless you are penalised for unfair dismissal in cases relating to health and safety or whistleblowing. In these cases, compensation can be particularly severe.
If you are considering terminating an employees contract be sure to obtain professional advice to ensure you are working to the correct procedures. The team at Crosse HR are here to help whether you are looking for advice or a professional intermediary to ensure you get the resolution you desire whilst staying on the right side of the law.
A tribunal is not a pleasant experience for anyone involved, except perhaps the lawyers of course, it means a dispute between the employer and employee has gone beyond the point where it can be resolved between them. Tribunals are akin to courts which will look at all the material facts of an employment dispute and make a decision either in favour of the employer or the employee. This week we will explain just how a tribunal works and explore the legal side of employment.
One of the top reasons tribunals take place is for unfair dismissal, this is where the employee believes they have been dismissed illegally for a reason which the law defines as ‘unfair’. These claims can be split into two categories; dismissals which are ‘automatically unfair’ and all other unfair dismissals. In next weeks blog we will discuss both of these categories in more detail.
This article does not cover all aspects of tribunals and employers should seek the appropriate advice if they are being taken to tribunal or believe it is likely they will be.
CrosseHR specialises in providing consultation to employers before, during and after a tribunal and can advise on all aspects of proceedings. For more information contact us on 0330 555 1139 or email firstname.lastname@example.org. You can also follow us on Twitter and connect to us on LinkedIn for regular HR insights.
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St Patrick’s Day is once again upon us and this Thursday people around the world will be dressed in green and gold, Guinness in hand and post probably having a good’ol time. Whilst not a public holiday in most of the world should workers be given the day off anyway? Would this increase productivity?
A recent survey by the Chartered Management Institute suggests that a majority of workers are cancelling out their own statutory leave every year owing to the advent of handheld devices. Smartphones and tablets were responsible for 4 out of 5 of the 1,500 managers surveyed working an extra hour a day answering out-of-hours emails and going over documents. The extra hours equate to just over 29 days per year cancelling the 28 statutory days leave. The study also suggested that putting in too many hours leads to work related injury, both physical and mental, and may result in burnout.
Recruitment giant Reed.co.uk found that 54% of workers forgo an average of 3 days leave a year and a quarter of Brits would rather forfeit the occasional day of than leave work unfinished or fall behind. There are many reasons workers choose not to take annual leave days and often this is attached to company ethos around the matter; many employees feel guilty about taking statutory leave, further they dread returning to an overflowing inbox and an intensified workload. Studies also suggest that staff who don’t want to take their statutory leave, rolling it into the next year, end up taking sick days which balances the figure out in any case.
The average French worker clocks 1,500 hours per year and can expect to receive 30 days paid vacation. Traditionally the french working week equals 35 hours and any hours worked after this are be considered overtime. The Office of National Statistics released a report in 2013 showing that on average the British worker is 27-31% less productive per hour than their French and German counterparts. Whilst this cannot be attributed to annual leave alone the figures certainly suggest a less is more approach has been paying off on the continent. French companies spend more on labour saving practices rather than recruiting meaning they get more for their money out of their workers per hour.
Some firms have started to adopt unlimited holiday policies which allow employees to take off as much time as they want provided their work gets done. Global giant Virgin is one such company, CEO and magnate Richard Branson notes in his book ‘The Virgin Way’;
“It is left to the employee to decide if and when he or she feels like taking a few hours, a day, a week or a month off, the assumption being that they are only going to do it when they feel a hundred percent comfortable … that their absence will not in any way damage the business — or, for that matter, their careers!”
The model is results focused and companies who also adopt a similar system, such as Netflix, expect employees to be high performing rewarding performance with holiday. At Netflix nobody tracks employee’s time; instead of micromanaging how employees do their work the employee is given autonomy over how they manage their time, this is said to promote a more efficient and responsible workforce. A focus is placed on results and managers are kept in the loop though effective communication and accountability policies. It is believed that unlimited holiday attracts talent and pays off in terms of retention and reduced sickness.
However there has been growing concern that this does more harm than good as the lack of a clearly defined annual leave policy makes employees question; how much is too much holiday? Employees are reluctant to take up leave as they feel their asking for leave will have an impact on their career prospects. The lack of clear guidance can lead to employee’s over working themselves which can have the opposite effect on their health and well-being that unlimited holiday is supposed to promote.
Annual leave policies are extremely important for any business given the potentially damaging effects of getting it wrong. It seems that company culture towards leave can have a real impact on employee wellbeing and of course productivity and sickness.
CrosseHR provides consultancy services to businesses and can help address policy issues, managing leave and sickness as well as improving employee relations. Call 0330 555 1139 or email us at email@example.com, you can also follow us on twitter for HR highlights, insights and updates.