How to dismiss an employee fairly

Taking on a new employee can be a daunting task. You want them to help your business, but what if they’re a hinderance? How to dismiss an employee fairly is something all business owners need to know…

Obviously, in an ideal world, you won’t need to worry about dismissing anyone. But life likes to throw us a curve ball now and then. All sorts of things can change in your business, and at some point that might mean having to let someone go.

Perhaps you need to restructure your business and make redundancies. Or a driver you hired unexpectedly loses their licence. Whatever your reason, your decision has to be considered fair. And so it’s important you know how to dismiss an employee the right way.

So, here’s a little guide to help you navigate it.

Eurgh, that’s so unfair…

It’s worth remembering that if someone thinks the reason you gave for their dismissal was not the real one, they can claim against you. So make sure you’re always being open and honest if you find yourself in a dispute with an employee and have to dismiss them.

There are different types of dismissal that can land you in hot water. Here’s a brief rundown:

Unfair dismissal

There are some reasons that are automatically classed as unfair. So, make sure you steer well clear of giving someone the chop if it’s to do with any of the following:

• Pregnancy, maternity, parental leave, and other family-related things
• Being part of a trade union, or acting as an employee representative
• Pay or working hours
• Whistleblowing
• Reaching retirement age
• Taking part in industrial action.

Wrongful dismissal

This is when you breach your contract with an employee when you dismiss them. If you terminate them without proper notice, for example.

Even if your reason for getting rid of them is valid, make sure you follow the procedures outlined in their employment contract, or you could still be faced with a claim.

Constructive dismissal

This is when an employee resigns because you’ve breached their employment contract. To put it simply - if it looks like you’ve been making their working conditions difficult in an attempt to make them leave.

This could include things like reducing their pay, dramatically increasing their workload, demoting them, allowing them to be bullied, or changing the location of their work at short notice without good reason.

So what’s a fair dismissal?

Good question. Like most things, the answer is a little vague because it’s complex.

But really, all you need to do is have a little common sense and trust your instincts.

If there’s a legal reason they can’t continue doing their job, then that’s considered fair. A driver losing their licence, or an employee committing a crime, for example.

Redundancy is an obvious one. Whether you’re having to downsize or restructure your business, redundancies are usually a last resort but sometimes they’re unavoidable. You’ll need to prove the person’s job will no longer exist and the selection process was fair.

Then there’s capability. If someone you hire is incapable of doing their job to the required standard, or they’re capable but not willing, you can dismiss them. But don’t be hasty. It’s important you do everything in your power to help them and give them several chances to step up. Especially, if they’re struggling due to health reasons.

Misconduct is another reason you might have to dismiss an employee. If it’s something small like persistent lateness or unauthorised absences, you’ll need to go through a disciplinary procedure. You must give them a fair chance to turn things around.

If it’s more serious, something like theft, or physical violence, you have the right to dismiss them right away. However, you still need to follow procedures. Investigate the incident and give the employee a chance to tell their side of the story.

How to avoid awkward goodbyes

Of course, if you manage your business strategically enough, you’ll lessen the chance of having to dismiss any employee.

There are lots of things to take into consideration when you take the plunge and start hiring people. Here’s just a few:

Think about how you hire them. Make sure you have a thorough recruitment process. Do background checks, and an in-depth interview. That way you can make sure they align with your company values, and that they’re not just qualified but will be a good fit.

Onboard them properly and provide them with training. Make them feel welcome and make sure they have all the tools they need to succeed from the get-go.

Tell them your expectations. If you make it really clear what you expect from them, they’ll be less likely to let you down. Keep checking in and set up performance reviews if you want to give constructive feedback.

Invest in them and create a supportive work environment. The saying ‘you get out what you put in’ comes to mind. No one in their right mind is going to give you their all if they feel like they’re not being looked after.

If push comes to shove

Even if you feel like you’ve done everything right, some employee conflicts can’t be avoided.

Employers’ liability insurance is compulsory in the UK. If you employ anyone, you have to have it by law. It’s there to protect employees and make sure they’re compensated if they get injured or become ill as a result of working for you.

If you’re faced with a claim of unfair dismissal or breaching a contract, though, you’ll need legal expenses insurance to back you up. This can be added to your business insurance policy and is a valuable lifeline.

With legal expenses in your corner, you’ll have access to legal advice which could save you from ending up in court with a disgruntled former employee. If a situation does escalate between you and them, it’ll cover all your legal fees.

Another option is directors’ and officers’ (D&O) insurance, which focuses on protecting the decision-makers in your company. By adding employment practices liability insurance (EPLI) to your policy, you and other major players in the business will be covered for things like discrimination, wrongful termination, and breach of contract.

Having insurance to back you up doesn’t give you a free pass to be a bad boss, though. Insurers will only pay out if they think you have more than a 50% chance of winning. In other words, if there’s evidence you’ve treated your employee unfairly, you won’t be covered.

Want to know more about protecting yourself and your employees? Just give us a call on 0345 222 5391.

Image used under license from iStock.