Most smaller businesses do not always have the access to HR support for all sorts of reasons.

a. they don’t think they need it or

b. they don’t think they can afford it.

The government is considering whether those with fewer than 10 employees should have the ability to dismiss employees without going through the formal procedure in return for paying a set amount of compensation. The idea, which is currently being reviewed, is to give those businesses the confidence to dismiss underperforming employees without the fear of getting a claim for unfair dismissal. Opinion is divided as to whether it will reduce claims but there are steps employers can take to reduce their exposure whatever the outcome of the consultation.

1. Get your Policies and Processes in order
Have clear and up to date policies in place on matters such as absence and performance management, so employees know what is expected of them and the consequences of not reaching the required standard. Ensure they are applied consistently to prevent any claims of discrimination (which require no minimum period of service and would fall outside the scope of ‘no-fault dismissals’ in any event). Ensure all managers are trained in what is expected of them in relation to line management responsibilities. Don’t assume they know.

2. Actively monitor performance so that any issues are resolved early on
Remember that as long as the process is fair and genuine an underperforming employee can still be dismissed without compensation and, if this is done within the first 2 years of service, if employed after 1st April 2012, then they will be unable to bring a claim for unfair dismissal. The higher threshold will only apply to those starting employment on or after 6 April – the change is not retrospective

3. Show employees that you take grievances seriously
Carry out a full investigation, do not play lip service,  and respond to the employee in accordance with the ACAS guidance. Deal promptly with allegations involving bullying, and any form of discrimination. Ensure that you have suitably equipped personnel to conduct the investigation, if not secure the services of someone who will provide an unbiased and fair approach.

4. Investigation is crucial in demonstrating fairness
For conduct or capability carry out as much investigation as is reasonable in the circumstances. For capability involving ill-health this would include obtaining medical evidence.

5. Redundancies can result in unfair dismissal claims.
However, these are less likely to succeed when it can be shown that there was a redundancy situation, a fair method of selection (including how the pool was selected, and a clear system for which of the employees was then made redundant) and consultation with the employees including considering alternatives.

6. Always hold a meeting.
Give the employee the opportunity to put their case in response at a meeting, make sure they are informed of their right to be accompanied and they need to be given the opportunity to appeal the outcome (the right to appeal applies to any sanction with the exception of a genuine verbal warning).

7. Is it worthy of a dismissal?
When considering the sanction for the employee decide whether it is appropriate to instead issue a written warning, or a final written warning (for more serious cases), or consider alternatives such as a demotion. In cases of gross misconduct, dismissal without notice is fine if you can be shown to have acted reasonably.

8. Be clear on your reasons
When contemplating dismissal, be clear whether it is for conduct, capability, redundancy, breach of a statutory requirement or for ‘some other substantial reason’ (such as a breakdown in trust and confidence or relationships). Ill health dismissals for example could fall under conduct (e.g. unauthorised absence or where the illness is disputed), capability (long term ill-health) or SOSR (short term intermittent genuine illness or not meeting the required attendance standards).

9. Don’t just act reasonably – show it
Make sure that you have documentation to show that you have acted reasonably throughout. This would include details of the investigation and minutes of all meetings and letters sent to the employee.

10. External help and support

Seek advice from ACAS or consider entering into yearly retainer agreements with solicitors or and HR consultant so that you can have certainty of cost and can use them to request advice as and when you need it.

Acknowledgement: Hill Dickinson Solicitors