Guide to firing employees

Tuesday 31 January, 2012

By Duncan Heaney - duncan@consumerchoices.co.uk

Businesschoices.co.uk helps you determine when firing employees is appropriate and guides you through the dismissal process.

Fiction is full of nasty bosses. We’ve all read or watched bosses who take sadistic glee in firing their long-suffering employees. But the reality is nobody likes firing people. It’s a complicated, stressful and emotionally draining process, but unfortunately sometimes it has to be done.

In this guide, we look at some of the reasons for terminating an employee’s contract, help you understand the processes involved, and offer some advice on how to make the dismissal process a little less painful.

There are actually four different types of dismissal:

• Fair: you have valid reasons for dismissal, such as sub-par performance or poor discipline
• Unfair: You do not have justifiable reasons to fire an employee
• Constructive: An employee resigns because you have breached their employment contract. For example, you may have cut wages without their consent, or they may have been the victim of bullying and harassment.
• Wrongful: A contractual term is broken when you fire someone - for example, you don’t give them proper notice.

For the purposes of this guide, we will be focusing on fair and unfair dismissal.

Fair dismissal

Fair dismissal occurs when you have a legally valid reason to terminate someone’s employment. Fair reasons include:

• Conduct - the employee has behaved inappropriately and broken one or more terms of their employment. For example, an employee is continually missing work, repeatedly turning up late, refusing to do any work, drug and alcohol abuse or theft.
• Capability - the employee is consistently failing to meet the standards required to do the job properly. This can include an inability to adapt to changes within the business (such as new IT) or work effectively with others in the business. It’s also fair to dismiss an employee if long-term illness prevents them from adequately doing their job - subject to meeting the terms of your sickness policy first.
• Redundancy - there is no longer enough work available for the employee.
• Statutory restrictions - if continuing to employ a worker would break the law. For example, if a driver loses his driving licence.

Those are common reasons, but they are not the only grounds for dismissal that will be accepted. The law leaves room for “some other substantial reason”. The word “substantial” is important - it has to be a valid reason, and you have to have looked at alternatives before resorting to dismissal. For example, an irresolvable personality clash between you and an employee could be a “substantial” reason. Others include imprisonment, changing location, or if an employee refuses to accept a change in their employment terms.

Whatever the reason you terminate an employee, you must make sure you behave reasonably during the entire process and follow your grievance procedures to the letter. If you do not have a qualified HR officer on your staff, you may consider consulting with a relevant professional body such as the Advisory, Conciliation and Arbitration Service (Acas), which can provide a range of resources are a source of advice for both employers and employees.

Acting reasonably

No matter what the employee’s offence, you must ensure you act reasonably throughout the entire dismissal process. If a case goes to an employment tribunal, your actions will largely define whether it was fair or unfair dismissal. What is and isn’t reasonable isn’t clearly defined, but it’s essentially about remaining fair and professional at all times.

Even so, it’s a good idea to think about some things a tribunal will consider before ending someone’s employment. These might include:

• You genuinely believe the reason for dismissal is fair
• You have grounds for that belief
• You conducted thorough investigations where appropriate
• You were open with the employee throughout proceedings, and informed them of the reasons for their dismissal
• You allowed your employee to be accompanied at every meeting
• You followed your company’s established disciplinary procedures. If you are unsure of what your policies are, or want to rework them, Acas has a useful guide to standard grievance and disciplinary processes, available on its website.
• You allowed the employee to respond to, and appeal against, their dismissal

If you haven’t done these things, and conducted yourself professionally throughout, you’re probably opening yourself up to a claim of unfair dismissal.

Unfair dismissal

If an employee believes they have lost their job unfairly, they could decide to make an unfair dismissal claim against you. Reasons they may do so include:

• The reason you gave for firing them wasn’t the real one
• The reason you fired them was unfair
• You failed to give the employee sufficient notice or warning before making the decision to let them go.

Consequences of unfair dismissal

If an employee believes he or she has been dismissed unfairly, they may take you to an employment tribunal. If the tribunal supports the employee, you may have to reinstate them.

However, it’s more common for the business to pay compensation, determined by the employee’s age, gross weekly pay and the length of their service. The tribunal can award an employee more cash if you don’t follow its instructions - for example, to reinstate someone.

With the exception of health and safety and whistleblowing cases, there are limits on how much you can be forced to pay. The government provides a handy table of compensation limits on its Business Link website.

Retirement

The compulsory retirement age was abolished in 2011. That means, you can no longer force retirement on an employee when they reach their 60s. You can set your own compulsory retirement age for your business, but only if it can be objectively justified.

Sickness

If someone is ill for a long time, dismissing them might be the only option. In many cases, the employee will resign of their own accord, but firing them might ultimately be necessary as few companies can afford to keep a post open indefinitely.

Even so, you should explore as many options as possible before taking that step. It might be possible to make alternate arrangements, and failure to investigate this can lead to unfair dismissal. One option is to ask their GP for a report. They can legally supply this, but the employee has the right to see the information before you do.

You should also talk through options with the employee. If it turns out that there aren’t any reasonable measures you can take to adjust to the employee’s condition, then dismissal is likely justified - even if the employee is classified as disabled.

How to fire someone on capability or conduct grounds

Sometimes people just won’t behave, or they just can’t do the job properly. In which case, you may have no alternative but to fire someone. In these cases, you should follow this process:

• Arrange a meeting with the employee, and let them know why you’re doing so. During the meeting, explain the problem, and let them know what you expect to improve. Let them know that unless progress is made by a set deadline, you will give them a written warning. Make notes from the meeting, and give a copy to the employee.
• If an employee’s performance hasn’t improved by the deadline, give them a chance to explain why. If you are unsatisfied, give them a first written warning. Create an action plan detailing the next steps, including what you expect from the employee and what you will do to support them. Make sure you record what happened in the meeting.
• If there continues to be no improvement by set deadlines, issue a final written warning and let them know that dismissal is becoming a possibility. Set deadlines and plans for improvements and, as ever, record the events of the meeting.
• If the employee still can’t (or won’t) meet your expectations, you need to organise a full disciplinary hearing.
• After the hearing you must decide whether to give the employee more opportunities to improve, or whether dismissal is an appropriate course of action. Whatever you decide, you must let the employee know the outcome.

Remember that employees have the right to be accompanied in all disciplinary meetings.

Advice for the dismissal

Firing someone is rarely easy. It can be stressful and heartbreaking for parties on both sides - the (former) employee loses a job, and the employer is likely to experience guilt for doing what is necessary. While there’s not much we can do about that, we can provide some advice that should minimise the emotional fallout of a dismissal.

Be compassionate, but honest - it’s important to consider the employee’s point of view and remember that this firing is likely to be a major life change for them. Whatever the employee’s offence, you should respect their dignity (no matter how undignified they may be feeling). However, while you should empathise with the employee, you shouldn’t dance around subjects or mislead them. Always be straightforward and honest about the situation.

Keep it private - never fire someone in a public place. Obviously firing someone in front of colleagues is absolutely unacceptable, but you shouldn’t take them to a coffee shop or similar either. Stay in a neutral business setting, with a closed door so that discussions can take place in private.

Have some company - if possible, have someone else on your side of the discussion to act as a witness. That means there’s someone to verify events in the case of tribunal, and you have support if things get heated or emotional.

Keep it short - meetings should be kept as short as possible. You don’t want to get caught up in waffle or off-topic discussion. Give the employee time to respond, but don’t drag things out any longer than they need to be.

Schedule a time for them to sort out their affairs - it’s a good idea to let your employee leave there and then. You can arrange a time for them to come back to the business to collect their belongings - this could be before or after trading hours to minimise embarrassment. Returning employees should always be supervised in case of reprisals.

Photo by sampsyo