Introduction

No matter what size or type of business you run, if you employ staff then there will probably come a time in which you have to let one or more of them go.

Dismissing employees is a difficult and sensitive process, and should always be approached with caution.

This article in itself is not a complete guide to dismissal and redundancy, but is designed to give you a brief overview of all the key areas. With all matters of such sensitivity, we suggest you carry out further research before making decisions, and in difficult cases; contact an employment consultant or solicitor.

There are two main areas involved in letting staff go: Sacking/Dismissal and Redundancy.

Sacking/Dismissal

There are a number of acceptable reasons for dismissing an employee. Gross misconduct or repeated minor misconducts, or an employee failing to effectively carry out their job over a period of time are legitimate reasons for dismissal.

Minor Misconduct

A minor misconduct is where an employee breaks rules or performs poorly, but where the consequences for the business are small or limited. For example:

• Being late
• Using a company vehicle for unauthorised personal uses
• Using company phones for personal calls
• Using company internet facilities for personal browsing/email use
• Not performing to adequate/satisfactory standards

A minor misconduct is not normally adequate grounds for dismissal, but if the behaviour is repeated, even after warnings, then it becomes a gross misconduct issue.

Gross Misconduct

Gross misconduct is where an employee breaks the rules, and the consequences for the business are damaging. For example:

• Abusive Behaviour or violence
• Theft or fraud
• Alcohol or drug abuse
• Discrimination or harassment
• Deliberately damaging company equipment/property
• Seriously breaking health and safety regulations
• Serious Negligence
• Serious insubordination
• Misuse of an organisations property or name
• Serious breach of confidence

Minor negligence caused by a lack of knowledge or experience should be addressed with training or guidance in the correct area. By law, the employee must be given reasonable opportunity to be taught the skills/knowledge needed to carry out the job.

Losing a customer because a form was not filled in correctly by a new employee who was given no relevant training is not misconduct of any level.

The loss of a relevant licence is also (in most cases) grounds for dismissing a worker, for example:

If an employee drives a lorry every day, but loses their driving licence, they are no longer able to carry out their job. The employer therefore usually has reasonable grounds to sack the employee.

There can be grounds for the employee to expect the employer to reassign the employee to another function while any ban is being served. A short speeding ban may only last for two weeks, and it would therefore be reasonable for the employer to find other work for the duration of the ban.

A loss of a licence should not be used to remove employees for any reason other than their job ability during the ban. Be careful of dismissing an employee that could fulfil other functions while banned, it could lead to an unfair dismissal claim.

Redundancy

Downsizing, laying-off, letting go, re-evaluation, these are all nicer terms created to try and ease the pressure of making redundancies.

There are many reasons why you may need to make someone redundant, a need to save money, overcapacity, branch/office/factory closure, or a lack of need for the job. In each case, there is a requirement to lose a particular number of staff.

Redundancy means that the job no longer exists. If a direct replacement is hired for the employee then it is not a reasonable case of redundancy. However, if an employee is made redundant as part of a need to reduce the workforce, and an existing employee moves into that job, that is still redundancy; as long as no vacancy or opening exists for the redundant job.

The realisation of redundancies in the workplace can often cause a lot of damage to employee morale, so offering voluntary redundancies first can help soften the blow. People who may be considering changing job or retiring can volunteer to be made redundant, thus minimising the need to make other employees redundant. Voluntary redundancies are still subject to the same payments and regulations as non-voluntary redundancies.

As redundancy payments vary according to years of service, voluntary redundancies can often cost more as longer service employees (see Redundancy pay section) take the option. Voluntary redundancies also risk your business losing valuable experience and skills, but it does remove a significant amount of the pressure involved.

Legality

Before making any decisions on dismissal, it is of vital importance to make sure that your grounds for dismissal are legal. There are many situations that are covered in the law as being illegal grounds for dismissal. Such as:

• Race
• Gender
• Disability
• Pregnancy
• Union membership / Non-membership

If an employee is dismissed on any of these grounds, they have a right to claim for unfair dismissal.

For example:

It is not wrong to dismiss a disabled person as long as the grounds for dismissal are unrelated to the disability. To dismiss a disabled person for serious negligence is reasonable, but to dismiss a disabled person for slow productivity (caused by their disability) is not allowed, no matter when the disability became evident / occurred.

The situation is more complex if a disability occurs that makes the employee unable to carry out their existing job at all. In this case, you should look to provide alternative work.

Procedures

When dismissing an employee, it is important to follow correct procedures.

Only in severe cases of gross misconduct should an employee be dismissed without warnings.

Even then, they should be first suspended with pay, while an investigation into the accusation takes place. The employee should be given a chance to answer the accusations, and only then should a final decision on dismissal be made. Refusing to give the employee a chance to explain their side before sacking them could leave you open for an unfair dismissal claim.

Your standard disciplinary procedure should be made available to your employees: The Employment Rights Act 1996 says that employers should provide written information for their employees on certain areas of disciplinary rules and procedures.

Although many companies have variations of disciplinary procedure, the standard procedure, as set out by the government is as follows.

1. Minor infringement

For a minor infringement, a formal oral warning should be given. It should give the reasons for the warning, what can be done to improve the situation, as well as informing the employee of future disciplinary action if the infringement continues/ improvements are not made. As the warning is part of the disciplinary procedure, the employee should be informed of their right to appeal.

A note of the formal warning should be kept, but should be disregarded after a satisfactory period of time (e.g.: 6 months) and then disregarded.

Many companies also write to the employee about the oral warning, as this makes the situation clearer.

2. Major infringement / Repeated Minor Infringement

If a minor infringement continues, or a major infringement occurs, then a formal written warning should be given. It should have the details of the complaint, as well as explaining what action is necessary to remedy the situation. The warning should also give details of the timescale for change, as well as detailing the right of appeal.

The employee should be clearly informed that a failure to improve the situation or behaviour will result in a final written warning, and likely further disciplinary action.

A copy of the formal written warning should be kept on record for a satisfactory period of time (e.g.: a year) and then disregarded.

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