Having to dismiss an employee is something many employers dread, due to the possibility that the dismissed employee may take them to an employment tribunal if they feel they weren’t treated fairly. This is why you should take care to act reasonably towards employees throughout the dismissal procedure.
So if you have a member of staff that you feel you may have to dismiss, this guide will hep you to understand how you can do this legally and without the unwanted fear, distraction or costs of appearing before an employment tribunal.
An employee must have two years or more of continuous service to be entitled to make an unfair dismissal claim (unless dismissed for a reason which is ‘automatically unfair’ – see below for more). There are, however, other claims – such as wrongful dismissal, where you breach a term of the employment contract – which can be brought however long an employee has worked for you.
To minimise any risk, you should have a legally fair reason to dismiss someone, and should follow the right procedures.
Reasons for dismissal
One of the mistakes employers often make when dismissing staff is not giving a fair reason. You will need a clear reason for dismissing an employee, and must be able to back this up. There are a number of reasons potentially considered an acceptable justification.
If an employee is unable to do their job to the standard required, you could dismiss them on capability grounds. However, you shouldn’t simply try and get rid of them the first time they don’t meet expectations.
Sometimes, an employee may end up unable to legally do their job – for example, if someone employed as a delivery driver loses their driving licence. However, even in these cases you should follow a fair procedure in dismissing the employee and consider whether there is a suitable alternative role within the business they can be given.
Another reason to dismiss an employee is poor behaviour at work. Whether this is reasonable depends on the seriousness or frequency of their misconduct. An issue like lateness would generally not constitute a fair reason if it happens just once or infrequently, but persistent misbehaviour of this sort, or more serious incidents, could be grounds for dismissal.
If changes to your business mean an employee’s role is no longer required, you can dismiss them on redundancy grounds. This article does not cover getting rid of staff through redundancy, as there are specific rights and processes for this situation.
Although the above reasons are the most common, other valid grounds for dismissal do exist. It is considered acceptable to dismiss someone for ‘some other substantial reason’ in addition to the above, though this has a specific legal meaning (it is not just a catch-all) and you should still follow a fair process.
There are some reasons for dismissal which are automatically unfair, including anything relating to:
- Pregnancy or maternity
- Taking parental leave, paternity leave, adoption leave or time off for dependants
- Pay or working hours, or status as a part-time or fixed-term employee
- Joining or not joining a trade union, or acting as a trade union representative, employee representative or occupational pension scheme trustee
Discrimination claims may be brought by employees who do not have two years’ service, so employers should beware any potentially discriminatory reason for dismissal.
The dismissal procedure
There aren’t technically any laws that tell you how to conduct dismissal proceedings; you are only expected to act “reasonably” throughout the process. However, ACAS has set out a Code of Practice on Disciplinary and Grievance Procedures for these situations – which you can access and download from ACAS here.
You are well advised to follow this code, if you don’t, 25% could be added to any compensation received by the employee as the result of a successful employment tribunal claim. You must also ensure that you follow your own published policy on disciplinary action, especially if this forms part of the employment contract.
The following approach is suitable when dismissing staff for being unable or unwilling to do their job to the standard required, or repeated misconduct issues such as persistent lateness which fall short of being gross misconduct.
Aim to tackle the underlying issues
Don’t approach this procedure as merely a formality for getting rid of an unwanted member of staff – it should be aimed at genuinely trying to tackle the issues at hand. An employee may bring a claim for unfair dismissal against you if they believe that the reason you gave for dismissing them wasn’t the real one.
You may want to talk to an employee informally about the issues you have with them before starting the formal procedure.
To begin the formal procedure, the first step is getting the facts of the case straight. This may just involve gathering pre-existing evidence, such as timesheets showing lateness or examples of the employee’s poor-quality work.
However, if an employee has, for example, been accused of misconduct by another employee, the investigation may be more in-depth – you should hold an investigatory meeting with the employee before beginning the proceedings properly, and potentially interview any witnesses.
Once you have investigated the issue and have solid justification for taking action, you need to notify the employee in writing of the situation, and arrange a meeting to discuss it.
Allow staff to give their opinion at disciplinary hearing
This disciplinary hearing should let them give their side of the story – if you conclude that they don’t have a good reason, you can issue them with a ‘first written warning’ stating the problem, the improvement you expect (particularly in relation to performance issues), and a deadline to meet these expectations.
If they don’t improve within the specified period, or there is further misconduct or poor performance, you should meet with them again about it, after which you can issue a ‘final written warning’ (if this is the next stage in your policy), giving them another opportunity to improve and explaining that they may be disciplined further if they fail to do so within the stated timescale.
If you are considering dismissing an employee due to a serious misconduct issue – for example, one which has harmed the company, or could do so – you can jump straight to the final warning stage if your policy allows this.
If there is still insufficient improvement, you should arrange another meeting to investigate the issue and consider appropriate sanctions. Let them know in any disciplinary meeting invitation that they could now be dismissed. You do not have to dismiss them after this meeting – you could give them another opportunity to improve – but it is an option.
Staff must be able to appeal at each stage of the procedure
The employee should be able to appeal at every stage of the process if they feel they are not being treated fairly. They also have the right to be accompanied to the disciplinary meetings by a colleague or a trade union representative or official.
If an employee commits an extremely serious act of misconduct, like theft or violence in the workplace, you may be able to dismiss them immediately for ‘gross misconduct’.
You will still need to investigate the incident in a formal meeting and allow them to defend themselves, but if you are satisfied that it was gross misconduct you can dismiss them without a notice period or opportunity to improve.
Make sure you have specified what constitutes gross misconduct in a company policy or your employment contracts so your employees are clear on this.
Many business owners are afraid that dismissal will be difficult and dangerous, but by following the right procedures, you can take all reasonable steps to protect yourself against the risk of a successful employment tribunal claim.
About the author
This guide has been written for ByteStart by James Watkins who is part of the team at Law on the Web
More help on managing and motivating and staff
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- How to prepare for and handle an employee grievance
- Health & Safety compliance for small businesses – where do you start?
- Disability in the workplace – what small businesses can do to manage it
- Can you fire an employee and get thanked by them for doing it?
- Employers liability insurance – if you employ anybody you are legally required to have cover
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- How to design an effective incentive scheme for your small business
- How to ensure your employees are engaged with your business
- Using staff benefits to motivate and retain employees
- How setting up a salary sacrifice scheme can reward staff and mean lower tax bills for employers and employees
- How to motivate employees and create a loyal workforce on a budget
- 5 tips to help you create a great team at your start-up