Dismissing an employee is one of the trickiest tasks an employer can do, however it is a necessary one.
Employees that consistently underperform waste time, money and resources as well as impacting the productivity of an organisation and undermining team morale.
If you’re looking to dismiss an employee, you must first make sure you are doing so legally. There are a number of rules around dismissing someone and getting it wrong could result in the employee taking you to an employment tribunal.
In this guide, we’ll be explaining how you can dismiss someone from your company in a legal way.
To begin with, it’s important to know the four different types of dismissal:
- Fair dismissal
- Unfair dismissal
- Constructive dismissal
- Wrongful dismissal
Fair Dismissal
In order for a dismissal to be fair, an employee must:
- Have a valid reason for dismissal
- Follow a full and fair dismissal procedure
- Make a balanced and consistent decision
What is a Valid Reason for Dismissal?
In order to legally dismiss someone, you must have a valid reason. These include:
Misconduct
If your employee has committed some sort of misconduct or if they are unwilling to do their job properly, you may dismiss them.
Misconduct can include issues such as persistent lateness or unauthorised absence from work.
If the misconduct is not ‘serious’ or ‘gross’, there are steps you must take first in order to make sure the dismissal is fair.
1.Arrange a meeting with the employee and let them know why you have called them in.
Then give them the opportunity to explain themselves and issue a first written warning if you are not satisfied with their reasons.
In the warning, explain how you expect them to improve and over what period. Warn them that if they don’t improve enough within the set time frame, you will give them a final written warning.
2. If their behaviour fails to improve by the deadline, give them another opportunity to explain and issue a final written warning if you aren’t satisfied with their reasons.
Revise the action plan with further timescales for improvement and warn them that dismissal will be considered if there is no improvement.
3. Hold a third meeting if their performance or behaviour is still poor by the new deadlines. Warn them that dismissal is now possible.
Following the meeting, decide whether you wish to give the employee another chance to improve or dismiss them. Whatever your final decision is, you must inform your employee.
Serious Misconduct
If the employee’s misconduct or underperformance is serious enough, you can issue a single ‘first and final’ written warning.
Explain that if they fail to improve, dismissal will be considered.
Serious misconduct includes behaviour that is likely to or has caused serious harm to the organisation itself.
Gross Misconduct
Gross misconduct includes behaviour such as theft, physical violence, gross negligence or serious insubordination.
Where gross misconduct has occurred, you can dismiss the employee immediately so long as you follow a fair procedure. To do this, you should first investigate the incident and give the employee a chance to respond prior to dismissing them.
One-Off Incident
If your employee generally has a good disciplinary record, an informal discussion may be enough to resolve the issue should it be a one-time thing.
Dismissing Staff Due to Illness
If an employee has to stop working due to long-term ill health, they may choose to resign or you may have to dismiss them, however, dismissal should always be the last resort and you should attempt to help the employee back to work.
This could include getting a medical report from their GP with the employee’s permission, arranging an occupational health assessment or working out whether or not they are disabled and making reasonable adjustments to help them do their job.
If no reasonable adjustments can be made and the employee can no longer do their job, it may be fair for you to dismiss them, even if they are disabled.
Redundancy
Redundancy is when you dismiss an employee because you no longer need anyone to do their job if your business is changing what it does, doing things differently, changing location or closing down.
Find out more about how to make someone redundant in our handy guide.
How to Dismiss Someone Fairly
During the dismissal procedure, you must act fairly and reasonably, ensuring to treat the employee with sensitivity.
Your procedure should follow the advice set out in the Acas Code of Practice or the Labour Relations Agency (LRA) if your business operates in Northern Ireland.
Failure to do so may result in your employee taking you to an employment or industrial tribunal and you may be forced to pay compensation if you are found to have dismissed someone wrongfully or unfairly.
Unfair Dismissal
Your employee may claim unfair dismissal against you if they think that the reason you gave for dismissal wasn’t the real one, the reason was unfair or if you acted unreasonably during the dismissal.
There are some automatic unfair reasons for dismissal:
- Pregnancy and all reasons relating to maternity
- Family, including parental leave, paternity leave, birth and adoption, adoption leave or time off for dependants
- Acting as an employee representative
- Acting as a trade union representative
- Acting as an occupational pension scheme trustee
- Joining or not joining a trade union
- Being a part-time or fixed term employee
- Pay and working hours, including the Working Time Regulations, annual leave and National Minimum Wage
- Whistleblowing
Penalties for Unfair Dismissals
If a tribunal finds than an employee has been unfairly dismissed, you may be ordered to reinstate them (give them their job back), re-engage them (re-employ them in a different job) and you might even be forced to pay compensation, depending on the employee’s age, gross weekly pay and length of service.
Constructive Dismissal
Constructive dismissal is where an employee resigns as a result of you breaking their employment contract.
An employee could claim constructive dismissal if you:
- Cut their wages without agreement
- Unlawfully demote them
- Allow them to be harassed, bullied or discriminated against
- Unfairly increase their workload
- Change the location of their workplace at short notice
- Make them work in dangerous conditions
Although a constructive dismissal isn’t necessarily unfair, it would be tricky for you to prove that a breach of contract was fair and it could potentially lead to a claim for wrongful dismissal.
Wrongful Dismissal
Wrongful dismissal is where you break the terms of an employee’s contract during the dismissal process. An example of this is if you dismiss someone without giving them proper notice.
If an employee thinks you may have dismissed them unfairly, constructively or wrongfully, they may take you to an employment tribunal.
If you’re thinking about dismissing one of your employees and are worried about whether or not it is fair and legal, get in touch with our team of human resources experts at Ryans Chartered Accountants.
We can help you to make the right decision when it comes to deciding to dismiss someone and all of the procedures that follow.