How to dismiss an employee

What are fair reasons for dismissals?

Employers must have a valid reason for dismissing an employee. This might include the employee consistently not performing their job correctly or causing an unsafe workplace for other staff members after many warnings.

It’s important you make sure the reason is valid before undergoing the dismissal. The Employment Rights Act 1996 provides guidelines for employers to help you choose the right outcome.

There are five fair and valid reasons for dismissing employees:

⦁ Conduct.

⦁ Capability or performance.

⦁ Redundancy.

⦁ Breach of statutory regulations.

⦁ Some other substantial reason (SOSR).

It’s best to dismiss an employee as a last resort as they could take you to a tribunal for unfair or wrongful dismissal.

Capability

One fair reason for dismissal is capability. This is when an employee has poor performance at work and can’t do the minimum requirement for their job role. An employee should receive many warnings before you can think about dismissal in this case.

Capability issues could include:

• The employee fails to meet targets.
• Unable to pass mandatory training.
• Unable to perform the job due to long-term illness or injury. (This is related to medical capability dismissal).

Breach of statutory regulations

Another reason for fair dismissal is when an employee can’t perform their job role because it would mean they are breaking the law.

One example is an employee who has been hired to drive a vehicle, such as a lorry driver. If they lose their licence they can no longer drive and therefore can no longer perform their job.

Some other substantial reason (SOSR)

Sometimes you may find that none of the reasons stated above apply to your employee’s case. But there are other fair reasons. These are known as SOSRs.

Examples could include:

• A conflict of interest between you and the employee.
• Risk to the reputation of your business.

Steps on how to dismiss an employee fairly

Before you can terminate an employee’s contract and dismiss them, you must ensure you are following a fair process. If you don’t you could risk damaging your business’s reputation, having to go to tribunal and paying costly compensation.

It’s good to conduct the dismissal procedure thoroughly and properly. This prevents any disruption to the rest of your business and among your other employees.

Make sure to present a fair and transparent procedure across all dismissal cases. This usually involves undergoing a disciplinary procedure first if you haven’t already.

Additionally, employers need to deal with each case individually. When following the disciplinary process, you should always include an investigation for a fair dismissal procedure.

Investigations should take place to fact find. If you find there are enough facts to warrant progressing, then the next step would be to invite the employee to a disciplinary hearing. Let’s take a look at the steps on how to dismiss an employee fairly.

Follow your disciplinary procedure

Before you can think about dismissing an employee, the first step is to follow the disciplinary procedure.

For some reasons for dismissal such as continuous poor performance, you must follow a disciplinary procedure. This will be set out in your disciplinary policy, and the procedure should include warnings and opportunities for the employee to improve. Unless the case amounts to gross misconduct.

You may also need to think about any reasonable adjustments you need to make to help those employees who need extra support. It could be that their continuous poor performance is lacking due to a disability.

Can be very risky if you are found to lack care for an employee in these circumstances. It could be raised to a tribunal, and you’ll need to pay compensation.

Gather evidence

To ensure you’ve undergone a fair procedure you will need to gather sufficient evidence to establish if there is a case to answer.

The first step is to investigate, for example taking witness statements, viewing CCTV etc. These will help demonstrate that you stuck to a fair process before you decided on dismissing the employee.

That way if the employee tries to claim unfair dismissal then you will be prepared with evidence to defend the claim.

Make sure not to discriminate

Employers need to be careful when dismissing a staff member because of a protected characteristic. It could mean you’ve discriminated against them without realising.

Protected characteristics include:

• Age.
• Disability.
• Gender reassignment.
• Marriage and civil partnership.
• Pregnancy and maternity.
• Race.
• Religion or belief.
• Sex.
• Sexual orientation.

If you find that an employee’s performance has dropped due to a disability, you must first ensure you are making reasonable adjustments to help support and improve their performance. An employee may make a discrimination claim against you if not.

Employees who fall under the protected characteristics can dispute a dismissal regardless of the length of time they have worked for you. That’s why ensuring you undergo the correct procedure before dismissal is important.

Hold a disciplinary meeting

The next step in dismissing an employee is to invite them to a disciplinary meeting. Inform them in writing and you can allow them to bring a representative which is a statutory right. This could be a trade union representative or a work colleague. Your policy will likely state what is allowed.

You will also need to state that the outcome of the meeting might be dismissal. Make sure you hold the meeting in a private room and organise someone to take notes and witness the meeting.

You’ll need to do the following during the meeting:

• Present the employee with the evidence you’ve gathered.
• Tell them how they have violated the terms of their employment contract or set out the allegations against them.
• Let them state their case and comment on the allegations made against them.
• Make sure you’re professional and polite during the meeting.
• Take in what they have to say in their defence and have a break to think about it.
• Think carefully and fairly before deciding whether to dismiss them.
• If at the end of the meeting, you decide to dismiss them, ensure you explain why you have come to this decision. You must make sure that the case is gross misconduct or that the employee is on their final warning to fairly dismiss.
• If you need more time to think about the decision then adjourn the meeting.

Adjourn the meeting if you need to

You can pause the meeting to carefully consider what the employee has said in their defence. If you believe your business needs to further investigate to ensure the employee dismissal process is fair, then let the employee know.

You will need to gather and show any new findings from the further investigation before another disciplinary meeting.

If you decide there is enough evidence and the dismissal is fair, formally deliver your reason for dismissal.

Deliver the outcome to the employee

If you go ahead with the dismissal make sure you are clear with your employee on why you are dismissing them. It must be a fair reason. You should also provide this decision in writing.

If the disciplinary meeting directs you away from dismissal, then explain this to your employee. Set out what improvement is required by the employee to continue at your business.

You may still feel like you don’t have enough evidence to warrant a dismissal. If this is the case, then explain that you will need to arrange a further meeting. Make sure to keep them updated with any new evidence and conduct further investigations in a timely manner.

It could be that there is no evidence for the dismissal. So, no further action is needed. Make sure you put this in writing to the employee to confirm this.

Remind the employee they can appeal the decision

You should allow an employee to appeal the dismissal decision. It’s good practice to do so, and part of undergoing a fair dismissal process.

Let the employee know of this right in the meeting if you decide to tell them the outcome there and then. Otherwise, give them an appeal deadline in the outcome letter.

Follow up the hearing in writing

Employers should follow up the meeting in writing and summarise the hearing. In the letter, it’s good to state why you have decided to terminate the employee’s contract and why you have come to this decision. Other things to include in the letter are:

• What the employee’s final day of employment is.
• What the employee’s notice period is, unless for gross misconduct then there is no notice period. If there is a PILON clause in the contract an employer may use this, in which case that should be set out in the letter.
• How the employee can appeal the decision.
• If the employee has any remaining annual leave.
• If the employee needs to return any company property.

This could help protect you if your employee tries to claim unfair dismissal.

Types of dismissals

If an employer fails to undergo a fair dismissal procedure they could end up facing an unfair, wrongful, constructive dismissal claim or multiple of these.

The only dismissals you should undertake are fair dismissals, where the reason is because of one or more fair reasons outlined in the Employment Rights Act.

What is an unfair dismissal?

An unfair dismissal is when an employee is not given a fair reason or procedure for dismissal. It’s good to note that you can have a fair reason for dismissal but if you follow an unfair procedure, then the dismissal is unfair.

What is wrongful dismissal?

An employee could claim wrongful dismissal if you breach their employment contract. For example, if an employer terminates an employee’s contract without proper notice, as outlined in their contractual or legal obligations.

What is constructive dismissal?

Sometimes an employee might feel like they have no other choice but to resign. This happens when an employer commits a serious breach of contract which is known as constructive dismissal.

What is summary dismissal?

Dismissing an employee who commits a serious act that requires dismissal without notice is referred to as summary dismissal.

Expert advice on unfair dismissal claims

It can be hard on an employer’s business when an employee claims unfair dismissal. Even if you had a legitimate reason for the dismissal such as poor performance, you could still be at risk if you didn’t follow a fair procedure.

All dismissals come with legal risk, that’s why it’s so important to contact a professional before you dismiss an employee.

If an employment tribunal determines that you unfairly dismissed an employee, you may be required to reinstate the employee, offer an alternative position, or provide compensation as ordered.

Employment tribunals can be expensive for employers and can cause reputational damages to your business. That’s why we offer 24/7 HR and employment law advice at Employers Direct. We take care of everything from all the legal processes to advice on dismissing the employee.

Employers Direct can help you manage dismissals when needed. We provide free legal advice and will help you decide the best course of action. Contact us at 0800 152 2287 or click here.

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