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Decoding the Complexities of Dismissal

Dismissal Newsletter

Dismissal is a taboo topic within the employment realm and has been since the introduction of employment legislation like the Employment Rights Act 1996. As a HR Consultancy, the topic of dismissal is never too far from the workload at Think People. We have an endless stream of clients who are dealing with employees with whom they have very justified reasons to dismiss, however despite following a compliant process, they feel it necessary to seek reassurance from our knowledgeable HR Consultants to ensure that they are not breaching employment legislation or best practice procedure. This common need to seek reassurance has arisen due to the enormous implications of a breach at an Employment Tribunal.

 

Notwithstanding the stigma around the issue of dismissals in general, are the complexities which surround the different types of dismissal. At Think People, we often find that our clients tend to get confuse the categorisation of dismissals, which subsequently affects the choice of procedure they evoke to deal with the situation. This article will provide a brief overview of the types of dismissal which are recognised within current employment practices.

 

Fair Dismissal

The most important starting point for anyone dealing with potential dismissals, is a knowledge of what constitutes a fair dismissal. A sound knowledge of a fair process will prevent any avoidable mishaps and mitigate the risk of possible dismissal repercussions. The Employment Rights Act 1996 outlines potential reasons where dismissal can be justified. These fair dismissal reasons include:

  • Capability
  • Conduct
  • Redundancy
  • Statutory illegality (this could include for example a truck driver who loses their driving license and thus cannot fulfil their duties)
  • Some other substantial reason (this can include the end of a fixed term contract of where an individual is employed to cover a period of maternity absence and as such this temporary arrangement has come to an end)

However, any dismissal will only be seen as fair if the employer acted reasonably throughout the dismissal process. In addition, in any dismissal case an appropriate procedure must be followed by the employer prior to reaching an outcome of dismissal. Employers should take cognisance of the LRA codes of practice. This means that the key things to be mindful about when contemplating dismissing an employee are the reason you are opting to dismiss and the process you follow during the dismissal process.

 

In terms of a Company’s policies and procedures, these are often put on a backburner whilst the day-to-day employment activities take priority.  However, a robust disciplinary procedure informs all staff what is expected of them during their employment and how they will be dealt with should they engage breach standards around misconduct. It is therefore so important that all employers have clear and compliant disciplinary and dismissal procedures in place. All employees should be fully trained and be aware of the policies and procedures and for managers and HR, how to implement them.

 

It is also important that employers attempt to resolve situations prior to reaching the dismissal stage. A potential resolution can be sought by engagement in more positive approaches like further training or coaching, performance improvement plans and counselling. These are a few examples of the wide range of options which are available within an employer’s arsenal. A dismissal should be the last resort and an employer should be able to demonstrate that they have exhausted all avenues with the employee.

 

Unfair Dismissal

As with outlining what counts as a fair dismissal, the Employment Rights Act 1996 also cements the concept of unfair dismissal. There are two specific conditions which must be met in order for a claim to qualify as unfair dismissal. A dismissal can be deemed as unfair if the employer does not have an appropriate or justified reason for dismissal (like those highlighted above) and if the employer does not follow appropriate, compliant policies and procedures prior to the dismissal. The latter is also a key indication of the importance of having robust and compliant policies in place, regardless of Company size or industry.

 

There are certain criteria that must be met in order to qualify for a claim of unfair dismissal, these include; the individual must be an employee, they must have completed the qualifying period of continuous employment (which is one year in Northern Ireland) and they must commence their claim within three calendar months of dismissal. There is however, an exception to the criteria which denotes that an employee must have completed the qualifying period of continuous employment and this is in the case where dismissal is automatically unfair. Automatically unfair cases cover a range of criteria but cases of discrimination could be arguably be the most common. It is important to note that in cases of automatically unfair dismissal such as discrimination there is no qualifying period of continuous employment.

 

A key case in the area of unfair dismissal cases is the case of Polkey v AE Dayton Services Ltd 1987; this case has brought about the ‘’Polkey deduction’’ which is  a rule that later Employment Tribunals have followed. The ‘’Polkey Deduction’’ means that in cases when an Employment Tribunal has decided that a dismissal was inherently unfair, they will separately decide whether the award will be reduced based on the probability that a dismissal would have occurred should an appropriate and fair procedure have taken place prior to the dismissal. This process denotes the amount of compensation which will be won in these instances.

 

A case where a claim of unfair dismissal was won by an employee is demonstrated in Autism Sussex Ltd. V Angel 2014, whereby the employee was dismissed for falsifying her time sheets. The Tribunal placed emphasis on the idea of fairness for a claim of unfair dismissal; fairness on the reason for dismissal and also fairness in the procedure which was followed. The employee won the claim against the employer due to the fact that the employer failed to carry out a reasonable investigation prior to the dismissal process and as such, the disciplinary process was procedurally unfair.

 

Cases like the above, highlight the importance of procedure when dealing with dismissals. At Think People we have seen situations where the appropriate reason for dismissal exists, however the Company has not followed their formal disciplinary processes or dismissal procedures or such policies are not compliant and as such are falling at the final hurdle and come dangerously close to the daunting prospect of an unfair dismissal claim.  In potential dismissal cases employers need to demonstrate the following:

  • Genuinely believe that it is fair reason to dismiss
  • Carried out proper and full investigations
  • Followed relevant procedures
  • Informed employee in writing why they are being considered for dismissal and listened to their representations
  • Afforded right to be accompanied
  • Right of appeal

In summary, in all misconduct dismissal cases the disciplinary panel need to demonstrate that they have tested the concept of reasonableness through the premise as to whether the employee could have expected to understand the consequences of their behaviour. If unable to demonstrate this then the employer is at risk of being unable to defend an unfair dismissal case.

 

Summary Dismissal

Summary dismissal is essentially where an employer dismisses an employee immediately and without notice nor pay in lieu. Summary dismissal normally occurs in matters of gross misconduct for very serious misconduct. Serious misconduct could be incidences of fraud or violence within the workplace, however each employer should have clear examples of what constitutes as gross misconduct within their disciplinary policies.

 

Summary dismissal carries a certain amount of stigma as it is a risky pathway and it has been viewed as procedurally unfair. However, there are occasions where a summary dismissal is entirely necessary, the key lies in a succinct understanding of not only dismissal and its complexities, but also your Company policies and procedures and terms of employment. If an employer chooses to summarily dismiss an employee, they must still follow a fair procedure. In order to summarily dismiss an employee, however, it must be an explicit term of their contract of employment. If summary dismissal is not an explicit term of a contract of employment, then the employer is bound to suspend on full pay in order to investigate.

 

Constructive Dismissal

Constructive dismissal occurs when an employee does not want to leave, but feels forced to resign from their position as a result of the employers conduct. Such mal conduct occurs when an employer breaches the terms and conditions of an employee’s contract. Examples of a breach of contract may be when an employer demotes an employee or decides not to pay an employee even though they have carried out the work and fulfilled their terms of the employment contract or when an employer changes the terms and conditions of a contract without prior consultation and mutual agreement. Breaches of contract can exist as a serious singular breach or can be a series of incidents which considered together amount to a serious breach.

 

As the employee has been forced to resign, it is interpreted as dismissal. The employee is entitled to terminate their employment with or without notice. However, the case of Western Excavating v Sharp 1978 outlined that an employee is only entitled to terminate their employment without notice in the event whereby a fundamental breach of contract has occurred. A fundamental breach occurs in a situation where the working relationship has become impossible and as such, the employee cannot continue to engage in the employment.

 

Wrongful Dismissal

There is no overarching legislation which governs the concept of wrongful dismissal, it stems from common law. As such, wrongful dismissal is guided through the ever-changing spectrum of case law. Although there is no overarching governing legislation, the concept of wrongful dismissal has a long-standing position within employment practices.

 

Wrongful dismissal is often confused with unfair dismissal, however wrongful dismissal is an entirely different concept. Wrongful dismissal occurs when an employer decides to terminate an employee’s contract of employment, but in doing so, breaches the terms of the employee’s contract of employment. The emphasis of wrongful dismissal is on the conditions which were agreed by both the employer and the employee upon beginning the employment relationship and whether the employer has failed to adhere to the agreed terms.

 

An example of wrongful dismissal can occur is where the employer dismisses an employee but they do not adhere to the notice requirements as outlined within the contract of employment. A breach of contract works both ways, if an employee breaches an explicit term of their contract of employment, then the employer is entitled to dismiss them without notice or pay in lieu as they have broken their requirements of the contract. This example may include termination as a result of gross misconduct.

 

Concluding Remarks

A key theme relating to dismissal which continually resonates in the advice that we give to our clients, is know your policies and procedures and best practice in terms of compliant procedures and understand the details of the situation that is at hand. It is the idea of stopping to think a situation through factually and without emotion; do not give in to knee jerk reactions as the implications could be costly.

 

The first step moving forward is to review your policies and procedures on a regular basis and make sure that all HR staff and managers are aware of them; they are there to guide through situations whereby a dismissal may be the outcomes. If you are clear on your rationale for dismissal and you have a deep understanding of your, hopefully robust and best practice policies and procedures, dismissal can be managed effectively and with confidence.

 

Keep an eye out for our upcoming Think People workshops, which are great training tools for getting up to speed with HR processes and new legislation.

  • Investigation Training: Think People Offices – Friday 27th April 2018, 9.30am to 4.30pm
  • Absence Management: Think People Offices – Thursday 10th May 2018, 9.30am to 12.30pm

 

By Shoshana Bracewell
Junior HR Consultant

Laura Gillespie