From time to time dismissing an employee is necessary. It is never a pleasant task and rarely undertaken lightly. The risk of Tribunal claims being brought for unfair dismissal is often a worry.
What do businesses need to do?
In the most, fair dismissals involves employers being reasonable with any procedure and decision making.
Very briefly, to dismiss an employee fairly you have to:
- conduct an investigation
- follow a fair procedure
- have a fair reason to dismiss
- ensure the decision is in the ‘band of reasonable responses’
- decide that there is no reasonable alternative
Compensation for unfair dismissal, in an Employment Tribunal, is usually only available to employees who have worked for their employer for at least two years (there are exceptions including discrimination and whistleblowing).
What is a fair reason to dismiss?
Well there are five reasons. These are:
- capability (this includes poor performance/ill health/qualifications)
- statutory illegality
- some other substantial reason
What is a fair procedure?
The ACAS Code of Practice on Disciplinary and Grievance Procedures (ACAS Code) applies to disciplinary situations and is a useful guide for dismissals. This Code must be taken into account by the employment tribunal when deciding if you have followed a fair procedure. A failure to do so not only potentially leads to unfair dismissal, it can also result in compensation being increased by up to 25%!
What if they resign but claim unfair dismissal?
This is called constructive (unfair) dismissal and is where an employee argues the employer broke the implied term of mutual trust and confidence, forcing them to leave. This usually arises where a contractual term is broken, such as reducing their pay or where an employee argues bullying or mistreatment.
What if I get it wrong?
Compensation is the most common remedy and is broken down as follows:
- a basic award – calculated using their age, salary and length of service
- compensation for loss of their statutory rights
- compensation for their loss of ongoing and future earnings
- other compensation for injury to feelings or aggravated damages, where there is for example, discrimination or whistleblowing involved
- recovery of their claim fee and hearing fee
As mentioned, you may also have to pay an uplift of up to 25% if you do not follow the ACAS Code.
Even where an Employment Tribunal agrees that there has been an unfair dismissal we might be able to argue for a reduction of any compensation you are liable for.
Whilst this rarely happens, an employment tribunal can also make an order for reinstatement (returning the employee to their original job) or re-engagement (returning the employee to another suitable job).
What next? How can we help you?
We will provide you with legal advice and we will work together to help you manage the situation, so to reduce the risk of litigation from an employee in the Employment Tribunal, limit the likelihood of compensation being payable and minimise any impact on staff morale.
If litigation is unavoidable we can help you defend or negotate any claims. Please contact us to help you further. If you want advice from an employment solicitor in Guildford, Godalming & the surrounding area, or want us to visit you at your offices (including London) do let us know.
You may find the ACAS Code and Guidance useful to familiarise yourself with.
To provide some useful information for employers, whilst online, we have employment law checklists available. You can also sign up for regular updates.
Sign up to our Newsletter
If you are an employee and are worried about being dismissed or having to attend a disciplinary hearing, please see here.