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Dismissal – which sort?
Tuesday, October 19th, 2010
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Dismissal of course means that the employment of an employee has been brought to an end by the employer for some reason or another – but if that reason is not fully understood, the employer may find itself in serious difficulty if the affected employee complains and goes to law. Dismissal comes in various forms and, if it is to be carried out safely, then any manager contemplating it must be fully aware of what must and must not be done.
Unfair Dismissal
If an employee with at least one year of service is to be dismissed, the employer must carry out the exercise in a manner that the law considers fair. Failure to do this results in the termination being classed as “unfair dismissal” and, if the employee is not re-instated in his or her old job or re-engaged on some other suitable work, the employer is likely to be required to pay a large amount of compensation for the hardship caused. For a dismissal to be fair in law, the employer needs to satisfy four criteria. First the dismissal must be for a fair reason. These reasons are set out in law and relate to the employee’s unacceptable behaviour such as excessive absence or poor timekeeping; or incapability of doing the work due to illness or lack of skill; or the employee is redundant; or is over 65 and the employer no longer wishes him or her to continue working (though this reason is quite likely to be modified); or continuing the employment would contravene some statutory requirement such as holding a valid work permit; or some other substantial reason that the court considers warranted dismissal, though this is not a commonly accepted reason.
Second, even if the reason is valid, the employer is required to act reasonably in dealing with the dismissal and the events leading up to it, and a guide to doing this is set out in the ACAS Code of Practice on Disciplinary and Grievance Procedures. This publication is not law, but Employment Tribunals – the courts who deal with unfair dismissal complaints – use it as a benchmark of proper behaviour by the employer. Most employers therefore take the Code of Practice and convert it into their own disciplinary procedure. This domestic procedure is then referred to in all contracts of employment or contractual statements so that employees understand their rights, and conversely any manager or supervisor carrying out discipline or dismissal can see exactly what to do.
Third, before conducting any disciplinary process, and certainly before dismissal is even contemplated, the manager must carry out a full investigation to ensure that the matter in question really does warrant discipline. If it does, then the employee should be given details of the complaint and the supporting evidence in sufficient time for him or her to read and consider it and call for any witnesses for defence, and be given opportunity to be accompanied by a colleague of his or her choice. At the disciplinary interview the employee should be given full opportunity to present a defence, after which the manager should call a break in order to consider the evidence for and against the employee. Finally, if the result is dismissal, the employer must be able to show that it is not an unreasonable response to the complaint. For example, the organisation’s rules may suggest that dismissal is likely to follow after three incidents of lateness, but this extreme sanction would be inappropriate if the incidents occurred over a twelve month period.
This process may seem complex and in a sense it is, but if you read the ACAS Code of Practice and its accompanying guide and list the steps that you need to take, you will find that it is nevertheless quite straightforward.
Wrongful Dismissal
Ordinarily if you dismiss someone in the ways outlined above you will be required to give the notice provided by the contract of employment. If you fail to do so, you will be in breach of the contract in which case the employee is likely to claim “wrongful dismissal”. Indeed, during the notice period you are required to continue all that the contract of employment provides such as use of the company car for private journeys, sick pay, life assurance and so on. Because of this some contracts specifically provide for certain benefits to be withdrawn during a notice period. Despite this, if you wish the employee to stop working for you as soon as you decide to dismiss, you may either terminate the employment by making a payment in lieu of notice or put the employee onto garden leave, the latter meaning that the person continues in your employment with all contractual benefits throughout the notice period, but does not come into work. There is no minimum service qualification to sue for wrongful dismissal.
Summary Dismissal
Some misbehaviours such as stealing or fighting are so serious that courts accept that they make continuation of the employment relationship impracticable and the employee therefore is dismissed without notice. Some of these misbehaviours usually are listed in employment handbooks as Gross Misconduct with a warning that they are likely to lead to “summary dismissal”, which is another way of saying dismissal without notice. However the procedures outlined above for fair dismissal must be followed scrupulously otherwise the termination will be judged to be unfair and you may be required to pay compensation to an employee who, for example, has stolen money from you. You may not want the employee to remain on site while you investigate the incident because he or she may intimidate witnesses or interfere with evidence, in which case you are perfectly entitled to suspend the person until the time of the hearing, but make clear that this suspension does not imply guilt. If summary dismissal takes place, the employee leaves employment immediately without notice or payments beyond that date.
Instant Dismissal
This is a term that really should not be used. Often it is used wrongly to denote summary dismissal, but even this requires time for an investigation and interview to take place, and so is not instant. Perhaps the only occasion when you can dismiss someone instantly is if you discover that you are employing a person who does not have the right to work in this country. As you would be breaking the law by employing him or her, you would indeed need to dismiss immediately and without notice.
Constructive Dismissal
This occurs if an employee walks out on the employer and claims that it was no longer possible to continue in employment. A common reason is that the employer has changed some part of the contract of employment without the agreement of the employee. If the employer refuses to revoke the change, the employee is entitled to treat the contract as ended and his or her recourse is to claim “constructive dismissal”. Another common reason is that the employer made the relationship intolerable by, say, bullying the employee or not protecting him or her from being bullied by other employees. To guard against claims of constructive dismissal, take care to gain the agreement of employees before changing their terms and conditions of employment, and make sure that they are not made to feel threatened at work.
This may all sound like a minefield, but really there is nothing to worry about provided you are aware of the reasons why you can go wrong and take steps to ensure that you avoid them. Ensure that you have sound and easy to understand procedures in place, train your people to use them, and have someone double-check your actions before you move towards dismissing anyone.
