Dismissing or “sacking” an employee can be a big decision for a business and they must follow internal procedures, professionally and ethically. Although there might be a range of reasons a business wants to dismiss an employee, doing so legally is vital.
A recent report found that 29% of people think it is too easy for businesses to dismiss their employees, but the process is quite complicated. This sometimes leaves businesses at constant risk of being taken to an employment tribunal if a former employee believes they have been unfairly dismissed.
During employment, the employer should issue warnings to ensure any problems are formally recorded. This allows an employee to correct their behaviour and improve. If issues persist, they can then consider dismissing the employee or if an employee commits an act so serious it is considered to amount to gross misconduct, an employer can dismiss without warnings or notice.
To fairly dismiss an employee, a business must first establish a legally fair reason for the dismissal.
Normally an employee must have at least two years’ service in order to be able to claim unfair dismissal.
Dismissing an employee due to their conduct
A business can dismiss employees if they consistently commit misconduct at work. This can include disobeying orders, poor attendance or substance abuse in the workplace.
Dismissing an employee who is not capable
An employer can dismiss an employee if they are not capable of completing their job role and tasks – they could lack skills or ability, or external factors could affect their performance, or if they are too ill to carry out their role.
If this is due to disability or illness, employers should make reasonable adjustments to remove any barriers they might face as a consequence of their disability. Businesses could face a discrimination claim if they dismiss a disabled employee without making reasonable adjustments.
Businesses should implement a probation period to assess new employees’ performances, set clear targets for them to achieve and ensure they are a good fit for your team.
Making an employee redundant
If a business claims redundancy, the job role is no longer required, which could arise because of a reduction in head-count, or because the workplace or business is closing. This means a business can’t re-hire someone in the same or a similar role.
An employee’s employment would break the law
If the employee cannot complete certain tasks without contravening a statutory restriction, this could be a fair reason for dismissal. For example, a professional driver might lose their driving licence but can’t be allocated other tasks.
Dismissing an employee for some other substantial reason (SOSR)
SOSR covers anything significant that doesn’t fall under the other dismissal reasons. This is most commonly used if an employee is arrested and this could be considered reputational damage, or if an employee refuses to accept new contractual terms during negotiations.
A business is required to prove they are fairly dismissing an employee for one of the above fair reasons. Otherwise, they might lose an unfair dismissal claim and have to pay compensation to the employee.
The employer must also ensure they are not dismissing and re-engaging (or firing and re-hiring) an employee.
What is fire and re-hire?
Fire and re-hire is a controversial topic after multiple large organisations fired employees during the pandemic and rehired them on lower wages. Firing and re-hiring is a way for struggling businesses to rapidly reduce their outgoings but retain a strong workforce. But the process’ ethics have been questioned.
Labour has introduced a new Code of Practice to make the process more difficult as part of their “Make Work Pay” initiative, with a view to banning fire and re-hire altogether.
Businesses are now encouraged to propose and discuss contractual changes with their employees to reach a new agreement that is beneficial for both parties. If the employee refuses to accept contractual alterations, the employer might still choose to dismiss the employee. But this should be an absolute last resort, and could still lead to claims of unfair dismissal.
Under the new Code of Practice, employers are at risk of paying up to 25% more compensation in tribunal proceedings if they are found to have dismissed an employee in breach of the Code.
A business considering dismissing an employee must ensure they are complying with Government guidelines and their internal procedures, whilst keeping up to date with changing employment laws.
We understand that the world of employment law and HR can be confusing. But it’s vital that businesses follow ever-changing legislation to remain compliant and avoid any potential employment tribunals by fairly dismissing employees, when necessary. With TE HR Assist, your business will have Employment Law experts by your side to ensure your business is on top of any legal updates and to protect you when dismissing staff.