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How not to dismiss an employee

10/01/2013

3D Judges Gavel StockMonkeys.com

Case dismissed

We were reading recently – today in fact – about how small-business owners are not following correct procedures when sacking staff.

The main reason for this is, apparently, that it's too much effort. The red tape involved in dismissing someone is frustrating and employers would much rather look for a quick option.

Fair enough. At a time when businesses are doing everything they can to cut losses and keep their heads above water, a clean break can seem like the best thing for everyone.

But employees these days are more pessimistic than ever, and aware that they're more vulnerable than ever. With one eye on self-preservation, they're making sure they know their employment rights.

Taking a former employer to tribunal for unfair dismissal, for example, is easy. And if you can't prove you've ticked every box you should've when you got rid of them, it's likely the tribunal will rule in favour of your disgruntled former employee.

That's bad news for all sorts of reasons. Mostly, of course, because that ruling is going to cost you money and give you a bad name.

Case closed

To give you an idea how much money, here are some unflinching stats from last year:

Number of tribunal cases: 110,800

Highest unfair dismissal award: £173,408 (far above the cap of £72,300)

Average unfair dismissal award: £9,133

Highest race discrimination award: £4,445,023

Highest disability discrimination award: £390,871

Highest age discrimination award: £144,100

That brilliant plan to cut costs by ditching staff doesn't seem like such a great idea now, does it?

Case for the defence

There are things you can do to limit your risk, however.

As always, prevention is better than cure. It might be tempting to just get rid of underperforming staff, but you need to make sure you have policies and procedures in place to monitor and address shortcomings first. And then follow them.

You should also pay attention to these things:

Contracts. Verbal employment contracts aren't a good idea so make sure everyone has a written (and signed) contract in their file. Setting out what's expected from both parties helps avoid misunderstandings and makes management easier.

Disciplinary procedures. Arbitrary decisions about an employee's conduct or performance don't sit well with tribunals. You need to make sure you follow a consistent procedure; one that's referenced in your contracts.

Acas have a set of principles for handling such matters, detailed in their code of practice. It's not legally enforceable but tribunals value them and expect you to have followed them. Compensation awards can go up by as much as 25% if you haven't.

Your obligations. Some things can't be done any other way. For example, every employer has to comply with the Equality Act 2010, and redundancies and other staff dismissals have to follow set procedures. Find out more from the government's own guidelines.

Management training. Letting people go is a fraught and emotionally charged time. You need to make sure your management team is aware of the procedures and knows how to use them if and when the time comes. This removes the potential for managers to act on impulse.

Your protection. Employment practices liability insurance helps, and pays for, your business and its individual managers to fight their corner if an employee claims against it/them. It pays damages to the claimant too if needs be.

Could be priceless if those award figures above are anything to go by.

For more help and advice on how to protect your business, call us on 0345 222 5360.

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