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Dismissing employees1. What do we need to worry about, if we handle a dismissal badly and get things wrong? 3. What should we include in our disciplinary procedure? 4. Do we have to go through the whole of the disciplinary procedure every time? 5. Can we sack someone for persistent poor time-keeping? 6. Can we sack someone who is just useless at her job? 7. Can we sack someone who has lied about his qualifications or experience? 9. Would a refusal to wear appropriate clothing be an adequate reason for dismissal? 11. What are the penalties likely to be, if someone succeeds in a claim for constructive dismissal? 13. One of our employees recently came up in court, and was sent to prison. Surely we can dismiss him? 15. In which cases is length of service immaterial? 17. What can we do, if people who have been dismissed refuse to work out their notice? 19. How long can a disgruntled ex-employee wait, before filing a claim? 1. What do we need to worry about, if we handle a dismissal badly and get things wrong? Depending on the circumstances, any of the following claims, alone or in combination, might be brought against you for is wrongful dismissal, unfair dismissal or discrimination. This is most likely where you have dismissed an employee without proper notice (either the statutory minimum, or the minimum stipulated in their contract of employment, if longer), or without pay in lieu of notice. This may be a breach of contract, so they may be able to claim damages, calculated so as to put them in the position they would have been if the breach had not occurred (for example, salary payable during the notice period, plus an amount equivalent to any benefits due during the same period). If they believe they are entitled to more than an Employment Tribunal can award in such cases (currently £25,000.00), they can take the claim to a civil court. In most cases employees cannot sue for unfair dismissal unless they have at least 1 year's continuous service with you. But in some cases (see question fifteen) employees
can sue regardless of age or length of service (for example, where the
reason for dismissal is or appears to be 'inadmissible' pregnancy, taking
advantage of statutory maternity rights, or where it relates to assertion
of a statutory employment right). Alternatively, an employee might ask for either reinstatement (to the old job, as though they had not been dismissed), or re-engagement (to a different job with the same employer, or a successor or associated employer). In either case, their employment must be treated as continuous (as though they had not been dismissed at all). Discrimination could happen if the employee claims that the dismissal was discriminatory, because it was related to their sex, marital status, civil status, colour, race, nationality, ethnic origin, disability, sexual orientation, religious or similar philosophical beliefs. Age will be added to this list in October this year. There is no minimum service requirement, and there are no upper limits on the amount of the award in these cases. An employee who wins on a discrimination claim might also be entitled to compensation for injury to feelings (currently capped at £25,000.00). Employees can also bring claims against individuals, which could include
you and/or your managers. 2. What is the best way of ensuring that a disgruntled employee cannot bring a claim for unfair dismissal? Ensure that there was a 'fair' reason for the dismissal, and that you acted reasonably in dismissing for that reason. There are only 5 potentially fair reasons which lawfully justify dismissal, and if you want to prevent a disgruntled employee from bringing an unfair dismissal claim, you must be able to establish at least 1 of these. The reasons are: " the conduct of the employee; " the capability or qualifications of the employee. (For example, sickness, other long-term absence, or where the employee lacks the necessary skills or qualifications for doing the job); " illegality. (For example, someone has been employed to do something illegal, or is not legally entitled to work in the UK); " redundancy (see Redundancy, question twenty); and " 'some other substantial reason'. This means any other substantial reason which justifies dismissal (For example, pressure from a third party customer). You must also be able to establish that you followed fair procedures (see question 3). You must observe the statutory dismissal, disciplinary and grievance procedures brought in in October 2004, and in particular the 3-stage ('standard') procedure to be used in almost all dismissal cases, which requires that: " the problem must be set out in writing and the employee must be invited to attend a meeting to discuss the matter; " there must be a face-to-face meeting to discuss the problem, after which the employer must inform the employee of the decision and confirm the right of appeal; and " an appeal must be arranged, if the employee requests it. In rare cases, a 2-stage ('modified') procedure will apply (see Gross Misconduct, HR 5b). In some very specific cases where the employer can not continue to employ the employee for reasons beyond the employer's control (for example, sudden and unexpected closure of a business or where an employer discovers an employee is working illegally), the minimum procedures do not apply (see Statutory Disciplinary and Grievance Procedures, HR18a). Where the minimum statutory requirements do apply, however, failure to
observe them (or to observe them adequately) could lead to an automatic
finding of unfair dismissal where a former employee with at least 1 year's
service makes a complaint to the Employment Tribunal. It could also lead
to an increase of between 10 and 50 per cent in the compensatory award
subject to the statutory cap (currently £58,400.00) to the employee
and a minimum basic award of 4 weeks' pay. 3. What should we include in our disciplinary procedure? You need to demonstrate that you have been fair and reasonable in your treatment of any employee subject to disciplinary action. Your procedures must be equivalent to or better than the statutory minimum (see question two), but provided that you observe the guidelines set out below, you will comply with these requirements. Your procedures should include: · a commitment by you, to investigate any offence that gives rise
to a disciplinary action; 4. Do we have to go through the whole of the disciplinary procedure every time? It is advisable to do so. It is particularly important that employees have an opportunity to state their case at a meeting. Do not assume that you can afford to be more casual with employees with less than one year's service. They are entitled to the same minimum disciplinary standards (a written statement of the problem, a meeting, and an opportunity to appeal) as everyone else. They will not be entitled to sue for automatically unfair dismissal because of a breach of the minimum disciplinary standards, unless they have at least one year's service. However, they may be able to sue for automatically unfair dismissal if one of the exceptions to the general rule requiring a year's service applies (see question fifteen), and there is no minimum service requirement for a claim of discrimination. 5. Can we sack someone for persistent poor time-keeping? Poor time-keeping is likely to constitute either a performance or a misconduct issue, and both are potentially fair reasons for dismissal. But you must still apply a fair procedure, which might include regular appraisals (with time-keeping issues being addressed), early warnings, providing the employee with a timescale for improvement, and obtaining medical evidence if there is any risk that the problem has a medical cause. If there is a genuine reason for poor time-keeping, such as a disability, you may be obliged to make 'reasonable adjustments' to accommodate the employee. 6. Can we sack someone who is just useless at her job? Poor performance is one of the potentially fair reasons for dismissal. However, to demonstrate that you have behaved in a fair and reasonable manner you might well have to show you conducted regular appraisals (to identify weaknesses at an early stage), issued early warnings with a set time to improve, set realistic targets and if necessary offered training and/or supervision to address problem areas. 7. Can we sack someone who has lied about his qualifications or experience? If the employee has knowingly misstated details about his qualifications or experience, this would be likely to count as 'some other substantial reason' to justify dismissal. However, if the qualifications are desirable rather than necessary, and particularly if the employee has been doing the job satisfactorily without them, it may be unfair to dismiss. So if you want and need an employee to have qualifications and/or a certain type of experience, make your job offer conditional on them, and check up on them before you confirm the employment. As in any other disciplinary case, you need to ensure that your procedures
are equivalent to (or better than ) the statutory minimum (see question
2) and that you observe the guidelines set out at question
3. 8. We have an (excellent) American employee who has failed to produce a work permit despite repeated reminders. Do we have to dismiss her? Providing that you are satisfied that she does not have a work permit, yes. It is illegal for you to continue to employ her, and you risk a criminal conviction for which the penalty is a fine and potential imprisonment if you do so. However, she may still have protection against unfair dismissal (if either her contract states or a court finds that the governing law is English, and she meets the qualifying conditions under English law). So make sure your procedures are equivalent to (or better than) the statutory minimum (see question 2) and that you observe them before dismissing her. You might also try consulting the Overseas Labour Service, to see if any steps can be taken to rectify her illegal status. Whilst it is a criminal offence to employ a person who is not entitled to work in the UK, you will have a defence if you have checked and retained copies of the documents of all potential employees, to ensure they have the right to work in the UK. But do not try to avoid prosecution by refusing to consider for a job anyone who looks or sounds foreign. That might count as unlawful discrimination on the grounds of colour, race, nationality, ethnic origin or religious beliefs. Checks to ascertain whether potential employees are entitled to work in the UK must be carried out in a consistent and non-discriminatory manner, and all job applicants must be treated in the same way. 9. Would a refusal to wear appropriate clothing be an adequate reason for dismissal? It depends on the circumstances. If the employee is representing the company in dealings with customers or suppliers, or appropriate clothing is required for health and safety reasons, probably yes; if he or she is working behind the scenes, possibly no. You need to think through your reasons for requiring particular forms of dress. Is it a legal or contractual requirement? What are the employee's reasons for objecting? How do you go about enforcing the requirement? Are you being discriminatory on the grounds of sex (for example, by requiring men to wear a shirt and tie while women may wear T-shirts), or on the grounds of race, ethnic origin, religious belief or sexual orientation (for example, by requiring formal business dress and refusing to allow employees to dress according to their race, ethnic origin, religious belief or sexual orientation)? Can your requirements be justified on either health and safety grounds or out of necessity to protect the reputation of an employer (for example the need for short hair for hygiene reasons in places where food is prepared)? In any case, follow normal disciplinary procedures before dismissing
anyone. 10. We moved someone to an alternative job, because their performance was unsatisfactory. Now they are threatening to bring a claim against us for constructive dismissal. What does this mean, and do they have a case? Constructive dismissal arises when you as employer commit a 'fundamental breach' of the contract of employment - so fundamental that it looks as though you no longer intend to be bound by an essential part of it. Such a breach entitles the employee to resign. It might arise, for example, if you cut an employee's pay, or made it very obvious that you were demoting or undermining a manager, or appointed someone to work in one place and then unilaterally demanded that they move to another. A change of function would not necessarily imply a fundamental breach in the employment contract, particularly if you had exhausted all other avenues in trying to help the employee improve their performance. Much would depend on the facts. Any employee who now makes a complaint about constructive unfair dismissal
to an Employment Tribunal is likely to have it blocked, unless he (or
she) has first raised the matter, in writing, as a grievance, and then
waited at least 28 days for you to respond. If you fail to respond to
the grievance, the claim may proceed, and any award against you may be
increased by between 10 and 50% (see Discipline
and grievance). 11. What are the penalties likely to be, if someone succeeds in a claim for constructive dismissal? The remedies available to an employee who is claiming constructive unfair dismissal are: 1) reinstatement; If the employer/employee relationship has broken down, however, the employee is unlikely to ask for his (or her) job back, and will probably seek compensation (see question one). 12. We have an employee who has been off sick for almost six months, and shows no sign of recovering. Can we dismiss him? Possibly. Incapability is one of the potentially fair reasons for dismissal. But first you need to consider whether the employee's ill health amounts to a disability under the terms of the Disability Discrimination Act 1995. If so, you must be able to show that your treatment of him was for reasons unconnected to his disability - unless such treatment can be justified because the reasons for it are material to the case, and substantial. You also need to show that the reason for the dismissal cannot be removed by a 'reasonable adjustment' to the employee's working conditions. Otherwise it is discrimination. If the employee is not disabled, but suffers from long-term ill health,
an Employment Tribunal would certainly expect you to do everything you
can to keep him on, if necessary including an offer of alternative employment.
However, if - after consultation with the employee and a medical investigation
- there is no prospect of him returning to work, and you cannot keep the
position open indefinitely, you may be able to dismiss on the grounds
of 'incapability'. To avoid a successful claim for unfair dismissal, you
must be able to show that you acted reasonably in treating the absence
as a reason to dismiss, and that you acted fairly before dismissing. Take
legal advice before you do anything. 13. One of our employees recently came up in court, and was sent to prison. Surely we can dismiss him? Be careful. Even though your employee has been convicted, you should still carry out such investigations as are reasonable in the circumstances before making any decision. Such investigations must be carried out promptly to ensure that any dismissal is fair. If the employee's offence was related to his (or her) work, a dismissal would probably be fair on grounds of conduct. Alternatively, the circumstances of the imprisonment might be such as to reflect adversely on the image of your business, and/or destroy trust and confidence in the employee, which might count as 'some other substantial reason' for dismissal. But great care should be exercised, and legal advice should be sought. The fact that the employee is in prison and therefore cannot do his job
is not in itself enough: it may 'frustrate' the contract, but as a general
rule Employment Tribunals are reluctant to decide that the contract of
employment has ended because of the employee's inability to perform it. 14. We have a new employee who is demanding expensive modifications to some machinery on safety grounds. Can we just tell him to pack up and go? No. If you sack someone for pointing out an imminent risk to health and
safety, it is automatically deemed to be an unfair dismissal, regardless
of his length of service. You should take his comments seriously, take
such steps as are reasonable (for example, asking the opinion of the Health
& Safety Executive), and ensure that the statutory minimum disciplinary
procedure is followed (see Discipline
& Grievance). 15. In which cases is length of service immaterial? There will automatically be a finding of unfair dismissal against you, if you sack anyone of any age or length of service for any of the following reasons: · taking leave for family reasons including pregnancy, maternity
leave and pay, paternity leave and pay, childbirth and parental leave; There will also automatically be a finding of unfair dismissal against you, if an employee can prove to an Employment Tribunal's satisfaction that you selected him (or her) for redundancy for any of the above reasons. These are the main problem areas, although this list is not exhaustive.
If you are considering dismissing anyone who might be able to attribute
your action to any of the above causes, you are strongly advised to take
legal advice first. 16. What do we do about an employee who is on her final warning, and whose conduct merits dismissal, but who is claiming to be pregnant? You cannot sack her for being pregnant, but in theory at least the fact that she is pregnant should not stop you from sacking her for one of the five fair reasons (see question two). But be very careful. You need to be very certain that her behaviour cannot be attributed to the pregnancy (which might be a cause, for example, of poor timekeeping - because of morning sickness - or absenteeism). You should conduct a thorough investigation and ascertain the facts before taking any action against her. Take advice. 17. What can we do, if people who have been dismissed refuse to work out their notice? You could bring a claim for breach of contract, but to succeed you would
have to prove you had incurred financial loss because your employees did
not work out their notice. Even if your claim was successful, your ex-employee
might not be able to reimburse you for the loss and the legal costs you
have incurred. Commercially, would it be worth it? 18. If we tell people who have been dismissed to leave immediately, do we always have to give them pay in lieu of notice? You will not have to give an employee pay in lieu of notice if you are dismissing him (or her), fairly, for gross misconduct. In other circumstances you will either have to let employees work out their notice or - if you want them to leave immediately, rather than hanging about disgruntled - pay them in lieu of it. If you do want them to leave immediately, ideally you should have a provision in the contract of employment that entitles you to pay them off in lieu of notice. Without such a provision, if you dismiss employees with pay in lieu, then technically you are breaching their contract, and this may prejudice you in enforcing any contractual obligations (such as restrictive covenants). Where you are not dismissing for gross misconduct, and you neither pay
money in lieu of notice, nor allow the employee to work his notice out,
he is likely, following termination, to have grounds for a claim for wrongful
dismissal (see question one). This could result in an
award of damages (ie financial compensation). Ex-employees would be expected
to do all they could to limit their losses by seeking alternative comparable
employment. In establishing the level of damages an Employment Tribunal
would take into account (and if appropriate deduct) any money that they
had earned from new employment during the notice period. 19. How long can a disgruntled ex-employee wait, before filing a claim? If the claim is 1 that can be brought to the Employment Tribunal, it must be brought within 3 months of the date of dismissal. The Employment Tribunal has the discretion to extend time if the employee can show that it was not reasonably practicable to present the claim within the 3 month period. In addition, a 3 month extension of time is automatically granted if: " the statutory dismissal and disciplinary procedure applies and the employee reasonably believes, at the time the normal time limit expires, that the employer is following a dismissal or disciplinary procedure; or " the statutory grievance procedure applies; and (i) the employee presents a complaint to the Employment Tribunal within the normal time limit, but either the employee has not complied with the requirement to set out the basis for his (or her) complaint in writing, and send a copy of it to the employer (the step 1statement), or the employee has complied but has not waited the required 28 days before presenting their complaint to Employment Tribunal; or (ii) the employee has presented a complaint to the Employment Tribunal after the expiry of the normal time limit, but has also sent the step 1 statement initiating the statutory grievance procedure. This could happen where the employer is still investigating, or has not notified the employee of the result of any appeal hearing within the normal 3 month time limit. If the claim can be brought in the civil courts (for example, breach of contract, see question 1), an employee has 6 years to claim. The court has discretion to extend time in some situations. Time can also be extended in discrimination cases, when to do so would
be 'just and equitable'. 20. What do we do about requests for references, if we have sacked someone for incompetence or disciplinary offences? It is best just to give a factual reference, with the dates of employment and the position of the employee. If you give more information, however, make sure that the reference is fair and accurate, and not misleading. You are not required by law to give any reference at all. However, a refusal to give a reference (for example, where the employee has raised issues of sex discrimination during employment) could in itself give rise to a claim for victimisation. You owe a duty of care to the ex-employee, to ensure that the reference
is not prepared carelessly or negligently. However, you also owe a duty
of care to the prospective employer. You could have a liability to either
party, if they suffered loss because the reference was misleading or inaccurate. Although these FAQs highlight some key issues relating to employment law, it should not be considered comprehensive and is not a substitute for seeking professional advice on a specific issue. Disclaimer Although we have made every effort to ensure that the information contained in these FAQs is accurate, Business Hotline Publications and the named experts disclaim any liability for any errors or omissions. © Business Hotline Publications Ltd
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