Dismissing employees - how to do it legally

Dismissing employees is a difficult, often awkward task – but it is one that most employers will come up against at some point.

Employees have a range of important legal rights that you must respect. There are clear rules regarding dismissal, and it is important that you understand and abide by these at every step. Failure to do so will likely result in a costly tribunal case.

Fair vs unfair dismissal

The concept of fairness is at the heart of dismissal law. In order to be deemed to have ‘fairly’ dismissed an employee, you must be able to show that you had a fair reason for the dismissal, and that you acted ‘reasonably’.

There is a range of reasons for dismissal that might be considered to be fair. These include things like a breach of conduct, a lack of capability, or redundancy. You might also be able to fairly dismiss an employee if there is a legal reason why they can no longer do their job; BusinessLink gives the example of a driver who loses their licence.

There is a second category of reasons for dismissal, known as ‘other substantial reasons’. This includes things like dismissal because the employee was taken on as maternity cover. In order for this to be deemed fair, you must have made the temporary nature of the contract clear before the employee started.

In addition to establishing a fair reason, you must also act ‘reasonably’. The concept of reasonableness has yet to be defined in law, but we can get a good idea of what will be deemed to be acceptable by looking at previous tribunal decisions.

Tribunals will look at a number of different factors when considering whether or not you have acted reasonably. This will include whether or not you had reasonable grounds to believe that the dismissal was fair, and whether or not you genuinely believed that. They will also consider whether or not you: followed your own published discipline procedures; gave the employee a chance to appeal; conducted a proper investigation; and explained to the employee what was happening.

Written procedures

You are obliged to produce a written set of disciplinary procedures, and to provide these to employees when they start. If you fail to do so, you may be forced to pay extra compensation in the event that a case goes to tribunal.

You should also make sure that your procedures are formulated in line with the Acas codes of practice. Again, if your disciplinary procedures do not follow those codes, any compensation order made against you at tribunal can be increased by as much as 25 per cent.

More information on the codes of practice is available on the Acas website.

Wrongful dismissal

You might have heard of employers being taken to tribunal for ‘wrongful dismissal’. This is deemed to have occurred when, through the process of dismissal, the employer breaks their contract with the employee. One of the most common reasons for wrongful dismissal is an employer’s failure to stick to their disciplinary procedures when those procedures have formed part of the contract of employment.

Your disciplinary procedures should include provision for disciplinary hearings. Again, these hearings should be conducted in line with the relevant codes of practice. Look out for an article on carrying out disciplinary hearings on Simply Business soon.

Summary dismissals

There are certain circumstances in which you may not have to conduct a disciplinary hearing, or give the employee notice of their dismissal. This is known as a summary dismissal.

Circumstances in which summary dismissals might be acceptable include cases of gross misconduct. For example, if an employee is caught fighting or stealing, summary dismissal might be deemed acceptable. You should remember, though, that employment tribunals frequently decide that summary dismissals are unacceptable – so you should avoid them wherever possible.

Redundancy

Despite the UK having returned to (meagre) economic growth, many businesses are still being forced to make employees redundant. It is important to understand that there are very specific rules for redundancy procedures, and that you will have to fulfil certain statutory obligations regardless of what your employment contract says. Again, look out for more information on redundancy on Simply Business soon.

Throughout the dismissal process, it is important to remember the concepts of fairness and reasonableness. If you are in any doubt about your responsibilities, make sure that you seek independent legal advice.