Business Advice has recently teamed up with HR and employment law consultancy Peninsula to create a short series on a range of HR-related issues. This article seeks to answer any questions you as an SME employer, might have on disciplinary rules and procedures.
Dealing with an employee disciplinary procedure or a dismissal is one of the less appealing parts of being an employer. But it’s even worse if you don’t know what the correct HR practices are. This could land you right in the middle of an unfair dismissal claim.
Small businesses feel the costs more
Such a claim can cost employers up to £1,600 in legal fees. For smaller businesses, this monetary loss is more keenly felt. So it makes sense to follow a fair disciplinary ruling before dismissing someone.
But what is a disciplinary ruling in the workplace?
Employers use disciplinary procedures to tell an employee that their performance or conduct isn’t up to the standard set by the company. If the employee’s conduct seriously deviates from this standard, it can lead to full-time dismissal from the workplace.
What determines a fair procedure?
Both disciplinary and dismissal procedures must be conducted under specific terms to be considered fair and legal.
The length of time an individual has been employed with your company plays an important role. For example, if an employee has been with your company for less than two years, they have no right to claim unfair dismissal.
On the other hand, if the offending employee has worked for you for two or more years, you must:
- Conduct an investigation into the matter
- Inform the employee of any issues following the investigation
- Invite the employee to a disciplinary hearing
- Hold the disciplinary hearing and issue the outcome
- Allow them the right to appeal
How do I avoid an unfair dismissal?
If you fail to follow all the appropriate steps within a dismissal procedure, you may face an unfair dismissal claim.
Even in cases of gross misconduct, you must refrain from firing offending employees on the spot. This is no longer considered an appropriate way to remove an employee from a business. As such an act could be judged as unfair.
It is important to remember that any actions you take against an employee should be determined by the severity of their offence.
For example, dismissing an employee for being late once or twice over the course of five years will not be considered a reasonable course of action and is likely to be ruled as unjust.
To avoid any misunderstandings around dismissal and disciplinary procedures, it is important to ensure that your employees are aware of the relevant procedures in place as part of their employment contract. It is also important that you communicate these terms clearly during staff induction and onboarding process.
How will an unfair dismissal affect me as an employer?
If the court rules your dismissal as unfair, you may be required to pay compensation.
The compensation payout is usually limited to a year’s salary with an approximate cap of £93,332. However, in some cases where an employee’s salary is significantly larger than this, the maximum limit is removed.
How do I conduct a disciplinary ruling the right way?
To avoid or at least lessen the chances of court actions and payouts, it is important that your business has a clear disciplinary procedure in place.
This includes having a set of guidelines to hand that you and your managers can follow in the event of a staff dismissal.
Practical advice on disciplinary procedures is provided by Acas, which is a useful resource that you can cross-reference with your own approach. However, many employers find that, if handled correctly, most disciplinary and dismissal cases can be dealt with informally.
Utilising a guide such as Acas can offer the right guidance if you are unsure whether an employee’s behaviour has fallen below the prescribed standards of acceptable behaviour.
What does the law say about dismissal procedures?
The Employment Rights Act 1996 protects employees from being unfairly dismissed.
The Acas Code of Practice on disciplinary and grievance procedures is a useful resource for employers, as it sets out the compliant way for an employer to manage a disciplinary procedure.
As this is a statutory code of practice, it means that a tribunal has to consider whether the employer or employee has adhered to its provisions. If not, then the unfair dismissal compensation can be adjusted appropriately.
By itself, a breach of the code’s provisions is not enough to be able to make a claim to a tribunal.
Still, have questions? Get expert advice on employment dismissal procedures from Peninsula, who can help guide you through the correct procedures. Arrange a free consultation with one of their local advisers today.
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