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Dismissals
People leave organisations for many reasons. The minority of these are dismissals, but it is typically this exit from an organisation that takes up the most time and energy. To ensure legal compliance, the reason for dismissal needs to be a potentially fair reason and the dismissal itself needs to be handled fairly.
A definition of dismissal
Dismissal, as defined by law, occurs when:
- Employment is terminated by the employer, with or without actual notice periods in force.
- An employee leaves with or without giving notice in such situations that he or she is entitled to leave without notice as a result of the employer's conduct - known as constructive dismissal.
- An employee is not allowed to return to work after a period of maternity leave, despite qualifying to do so.
- A fixed term contract expires and is not renewed.
Fair reasons for dismissal
For a dismissal to be fair, an employer must be able to prove that it was on the grounds of:
- Misconduct
- Capability
- Redundancy
- Statutory restrictions
- Some other substantial reason
While these all may be reasons for dismissal, the process of dismissal must also be fair - the employer follows a disciplinary procedure process, which in itself must be fair. (See Disciplinary procedure). Many complaints against employers are upheld because the company disciplinary procedure was not followed, despite a potentially fair reason for dismissal.
Key questions in establishing fairness
In order to establish the elements to a potentially fair reason for dismissal it is worth checking the following:
- Has the proper procedure (written organisation disciplinary procedure) been followed and applied?
- Was the employee allowed statutory representation?
- Was the employee offered the right of appeal to the decision and was it taken?
- If this is a first offence, was dismissal appropriate (ie on the grounds of misconduct?)
- Does the employer believe that he/she treated the employee in a fair and reasonable way?
- Has the employer taken a consistent approach in other similar circumstances?
Unfair dismissals
While it is important that all dismissals should be fair, the law currently states that only employees with a minimum of 12 months' service can claim unfair dismissal to an employment tribunal. However, that said there are some case where the qualifying periods do not apply, as follows:
- Sex discrimination
- Racial discrimination
- Discrimination on the grounds of disability
- Trade union membership related dismissal
- Maternity related dismissal
- Exercising a statutory employment right
- Dismissal of a shop worker for refusing to work on a Sunday
- Reasons connected to the transfer of an undertaking from one employer to another
In the cases above, the employment tribunal considers the dismissal fair or unfair on the basis of the actions of the employer and the dismissal reasons.
Redundancy dismissals
While redundancies may be a potentially fair reason for dismissal, care should be taken in the selection of those who are to be made redundant. It is worth considering other options before making redundancies, such as:
- Terminate the use of non-employees, such as freelancers or those employed by agencies and contractors.
- Look at early retirement options for relevant employees and that those beyond retirement age who are still working actually do retire.
- Stop recruiting and overtime working.
- Introduce short-time working.
- Don't recruit when people leave.
- Give employees the options of part time work, job share or career breaks.
If redundancies are still necessary, you need to decide how to select the redundancies under the Trade Union and Labour Relations Act 1992. There is a duty to consult collectively if between 20 and 99 employees are being made redundant, with at least a 30-day consultation period. For more than 100 employees this consultation period becomes 90 days. Redundancies have to be notified to the DTI. In the event that you need to make redundancies from your workplace, consult the DTI for further information about best practice and consultation processes.
Grounds for selection
The grounds for selecting redundancies need to be given careful consideration. Competency records and attendance records are often used. What is critical is that the selection criteria chosen is fair and objective and not potentially discriminatory. It is the position that is being made redundant, not the person.
Employment rights surrounding redundancies
In order to ensure a potentially fair dismissal on the grounds of redundancy, consideration should be given to the following:
- Consultation with employees
- Employees should be consulted on an individual basis.
- Explain why the redundancies are necessary and offer the employee the chance to come up with ideas and suggestions that might replace the need for the redundancies.
- Explain why that employee has been selected for redundancy.
- Explain the individuals' employment rights during the redundancy notice period.
- Explain that no suitable alternative work is available.
- Suitable alternative employment
- Alternative employment should be offered, where it is an option, even a job offering less pay or status might be better than facing redundancy, so these approaches should be discussed with the redundant employee.
- If a suitable alternative position is offered, the employee has the right to a four-week trial period in the new job. If either party finds the job not to be suitable during this four-week period, then the redundancy situation still applies and the redundant employee would be entitled to redundancy pay.
- If the offer of suitable alternative employment is refused by the employee, then the employer can withhold redundancy payment. Any complaint made to an employment tribunal would subsequently be assessed on the suitable alternative offered and the reason for refusal.
- Right to time off
Employees with at least 12 months' service who are about to be made redundant have a statutory right to time off work to look for other jobs, have interviews or be re-trained for alternative work.
- Compensation for redundancy
Employers are expected to compensate any employee who has been made redundant and has worked for them for at least 12 months. The amount the redundant employee is entitled to is based on age, length of service and average weekly wage. If an employer is making an employee redundant but does not require them to work their notice, then pay in lieu of the notice period should be paid. For further details check out www.freelawyer.co.uk.
Remedies
In the UK, all employees with 12 months' service have the right to make a complaint to an Employment Tribunal within 3 months of dismissal. For cases relating to sex, race, disability or trade union membership, there is no qualifying period.
Compensation
If a former employee wins a case at Employment Tribunal, the compensation is divided into three main areas:
- Basic award
This award is calculated by considering the number of years' service, age of the former employee and average weekly wage, subject to a current maximum of £260 per week.
- Compensatory award
This award takes into account factors such as:
- loss of earnings
- loss of benefits
- injury to feelings
The current limit to compensatory awards is set at £52,600, excluding cases relating to sex, race, disability and trade union membership.
- Re-instatement or re-engagement
Re-instatement is when the employment tribunal says that the employer must give the former employer his or her old job back on the same terms and conditions (with compensation for loss of wages and benefits while not employed).
Re-engagement is when the tribunal says that the employer must re-employ the former employee, but this may be in a different job or on different terms and conditions of employment.
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