The right way to dismiss an Employee

Insubordination is typically where an employee is disrespectful toward their employer, and/or refuses to do as they are asked.

How do you fairly dismiss an employee?  What’s the procedure for dismissal of an employee? Is there a different procedure for employees with less than 2 years’ service?

When you want to dismiss an employee

It is undoubtedly true that hard, and harsh, decisions sometimes need to be made in business. It’s just one of those things. If there’s not enough money to pay everyone, if someone isn’t reaching the required standard, or even if they just don’t “fit in”, an employer will need to make changes that could include dismissals.

I’m not necessarily talking here of fair dismissals – those that fall nice and safely within one of the potentially fair reasons to dismiss (redundancy, misconduct, incapability regarding performance or ill health, etc).  I’m talking about those tricky cases where, yes, we might be able to convince an Employment Tribunal that it’s a fair dismissal, but I grimace a bit and don’t feel I can advise there is any decent chance of that result – or where, if I’m acting for an employee, I’m rather more cheerful about prospects of success.

What is a fair dismissal?

To get a bit legal for a moment, if an employee has more than two years’ service, they have the right not to be unfairly dismissed.  There are also some situations where employees don’t need two years’ service.

A dismissal will be unfair if it isn’t because of one of the potentially fair reasons to dismiss, and/or if the employer hasn’t followed a fair procedure before deciding to dismiss.

What are the potentially fair reasons to dismiss?  Well, employees can be fairly dismissed because of:

• misconduct
• redundancy
• incapability due to performance or ill health
• breach of statutory duty or restriction (illegality)
• “some other substantial reason” that justifies the dismissal of the employee in the particular circumstances

What’s the potential award for unfair dismissal?

An Employment Tribunal can award up to a year’s pay for unfair dismissal (subject to a cap, currently £93,878 from April 2022). The employee may also have other claims, such as discrimination, if they were dismissed because of their sex/disability/race etc.  Awards for discrimination are unlimited. In addition, the legal costs of bringing or defending an Employment Tribunal claim can be considerable, as is the intangible cost in terms of stress and, for a business, management time.

Using offensive, obscene or violent language or behaviour toward your employer may be deemed ‘gross’ misconduct.

What’s the procedure to follow before dismissing an employee?

The procedure to follow will depend on the reason for the dismissal.  At the very least, the employer should explain and discuss the situation with the employee before making their decision, and then confirm that decision in writing.  The employee should usually be given the chance to appeal against their dismissal.

How can you make the dismissal procedure more humane – and why is it worth doing so?

Employers can (as in, are able to) dismiss employees without going through a fair procedure, and without a potentially fair reason.  Before doing so, though, it’s worth doing a risk assessment on the employee’s chances of successfully claiming unfair dismissal (and other types of claim), and getting advice on a “commercial” procedure. For instance, less risk can be attached to dismissing an employee with less than 2 years’ service, assuming no other potential issues. If an employer dismisses with no procedure or warning, or without planning how to manage the fallout, the employee’s reaction to what could be a massive shock can make it difficult for the employer to control the situation.

To put it mildly, treating an employee poorly, aggressively, or unkindly when dismissing is more likely to trigger stress related sickness absences, grievances, appeals – and ultimately will likely require a higher price to get a deal done. If a dismissal isn’t closed off with a settlement agreement, there is no guarantee that the employee won’t bring a claim. Obviously there will be cases where there is a really good reason not to offer a deal – it’s by no means a requirement that every dismissal must lead to a settlement agreement.

On the other hand, if the employee is let go with humanity and empathy, there’s less chance that they feel sufficiently aggrieved to take things further.

It’s more than just mechanically following the law around unfair dismissal, discrimination and box ticking your way through a fair procedure.  Showing that it was a difficult decision, and taking steps to soften the blow can make a huge difference to someone facing the uncertainty of unemployment. This can be illustrated by the language and tone used in meetings and communications with the employee.  It can be illustrated by the timing of a dismissal – just before Christmas, or just before bonuses are due might be more likely to trigger a more combative response from the employee. And yes, it can also be illustrated by making a compensation payment in addition to the basic payments due on termination, to sweeten the pill – in which case a settlement agreement should be used to formalise matters and draw a line under the dismissal.  More on settlement agreements can be found here.

Get in touch if you’re affected by anything mentioned in this blog, whether you’re an employer or employee.  I’m more than happy to have a brief chat to get initial information and discuss how I can help.

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