Dismissal Procedures

Understanding Employee Dismissal Principles

At AHACCOUNTANTS, we recognize the complexities involved in the dismissal of employees, including common pitfalls that employers may encounter. If you are an employer in the Nottingham area, we are here to assist you with any questions or concerns you may have.

Key Principles of Employee Dismissal

In recent years, employment law and regulations have undergone significant changes. A critical area of focus is the conditions under which an employee can be dismissed.

While an employer can terminate an employee’s employment at any time, the dismissal must be fair. If it is not, the employer may face claims of unfair dismissal from an Employment Tribunal.

Since November 2011, the qualifying period for claiming unfair dismissal has increased from one to two years of continuous service. However, there is no length of service requirement for ‘automatically unfair grounds’.

Below, we outline the main principles regarding employee dismissal, along with common mistakes employers often make. While we aim to present this information in a clear and accessible way, some issues may be complex. We advise seeking professional guidance before taking any action.

The Right to Dismiss Employees

Fair dismissal can occur for several reasons, including:

• Capability or Qualification: If the employee lacks the necessary capability or qualifications for the job, the employer must follow consultation and/or disciplinary processes.
• Inappropriate Behaviour: Employers should have clear policies outlining unreasonable behaviour and must follow disciplinary procedures when addressing such conduct.
• Redundancy: If a genuine business case exists for making a position redundant, and there are no suitable alternative roles available, employers must ensure adequate consultation and avoid discrimination in selecting employees for redundancy.
• Legal Process: If an employee loses the right to perform their job due to a legal issue (e.g., a driver losing their driving license), the employer should explore alternative work options before dismissal.
• Substantial Reason: Other substantial reasons may also justify dismissal.

Claims for Unfair Dismissal

After completing the qualifying period, employees can claim unfair dismissal through an Employment Tribunal within three months of their dismissal. If an employee can prove they were pressured to resign, they have the same right to claim unfair or constructive dismissal.

In addition to the increased qualifying period, the government has introduced measures requiring that claims be submitted to ACAS (the Advisory, Conciliation and Arbitration Service), which offers pre-tribunal conciliation before proceeding to a Tribunal. However, participation in this process is not mandatory for either party.

There are two levels of claims depending on the case’s complexity: straightforward claims (one claim per claimant) and more complex multiple claims (including unfair dismissal and discrimination claims).

If a claim proceeds to Tribunal and the employee prevails, the Tribunal can grant one of three remedies:

1. Reinstatement: The employee returns to their old job under the same terms and conditions.
2. Re-engagement: The employee is offered a different role with the same employer.
3. Compensation: This can range from a small sum to a maximum cap of 12 months’ pay (applicable when the amount is below the overall cap). For dismissals related to discrimination, awards can be unlimited.

Certain dismissals are deemed automatically unfair regardless of service length, including those based on:

• Age, disability, gender reassignment, race, religion or belief, sex, sexual orientation, or marriage and civil partnership discrimination
• Pregnancy, childbirth, or maternity leave
• Refusing to opt out of the Working Time Regulations
• Disclosing wrongdoing in the workplace
• Health and safety reasons
• Assertion of a statutory right

Statutory Disciplinary Procedures

The Employment Act 2008 introduced the ACAS Code of Practice, which changed how employers address workplace issues and removed ‘automatic unfair dismissal’ related to procedural failures. Tribunals may reduce awards by up to 25% if employers unreasonably fail to follow the ACAS guidelines.

The ACAS Code outlines procedures to follow before dismissing or imposing significant sanctions (like demotion or pay reduction). It does not apply to redundancy situations or the expiry of fixed-term contracts.

Standard Procedure for Dismissal

Employers should:

1. Provide a written statement outlining the reasons for dismissal or disciplinary action and send a copy to the employee.
2. Invite the employee to a meeting to discuss the issue, allowing them to be accompanied.
3. Conduct the meeting to give the employee a chance to present their case. The employer must then make a decision and inform the employee of their right to appeal.
4. If an appeal is made, the employer must hold a meeting to arrive at a final decision.

In limited circumstances, a dismissal without a meeting may be deemed fair, particularly in cases of serious misconduct, though these instances are rare and depend on case law.

Modified Procedure

In cases requiring a modified procedure, employers should:

1. Provide a written explanation of the grounds for dismissal and the employee’s right to appeal.
2. If the employee appeals, invite them to a meeting with the right to be accompanied, then inform them of the final decision.
3. The appeal meeting should ideally be led by a more senior or independent person not involved in the original dismissal decision.

Exceptions to the ACAS Code

Employers are not required to follow the ACAS Code in certain situations, such as:

• When following the Code would pose a significant threat to anyone’s safety or property.
• When harassment occurs, making it impractical to follow the Code.
• Situations involving redundancy or fixed-term contract expiry.
• Sudden business closures due to unforeseen events.
• When the employee can no longer work due to legal breaches (e.g., lacking a valid work permit).

Common Mistakes Employers Make

The regulations surrounding dismissals can be confusing, leading to some common errors, such as:

• Not applying procedures to employees with less than the qualifying period of continuous service for unfair dismissal. While these employees cannot typically claim unfair dismissal, they may still have grounds for other claims, like discrimination.
• Failing to invite employees to disciplinary hearings in writing or providing adequate evidence beforehand.
• Excluding dismissals unrelated to disciplinary issues (e.g., ill-health terminations).
• Not allowing employees to be accompanied during hearings.
• Omitting a right to appeal from dismissal procedures.
• Delaying any part of the dismissal process unduly.
• Misunderstanding that employees can appeal verbally or after the specified timeframe.
• Not recognizing that lower performance-related bonuses could constitute ‘action short of dismissal.’
• Ignoring written statements or letters (like resignation letters) that may raise issues relevant to a potential tribunal claim, even if they do not explicitly mention a grievance.

How We Can Help

If you are an employer in the Nottingham area seeking assistance or further information about employee dismissal principles, please contact us at AHACCOUNTANTS. We are here to provide detailed advice tailored to your specific needs.