Dismissals – it’s not what you do but the way that you do it

Even if you have good reason to dismiss an employee, your business can still be liable for unfair dismissal if you make any mistakes in the dismissal process. Phrasing the grounds for dismissal correctly as well as following procedures properly are both crucial, explains David Jepps.

If your business has employed someone for over a year (and sometimes for less than a year), the employee is protected against unfair dismissal.

When dismissing an employee, to avoid a successful claim of unfair dismissal, your business must demonstrate that it had both a fair reason for dismissal and that it went about the dismissal in the right way. What is a potentially fair reason for dismissal is narrowly defined by law.

Businesses will often fall foul of the law of unfair dismissal because they don’t follow any procedures at all when they dismiss or because they don’t follow those procedures properly.

If a dismissal is unfair then compensation is payable to employees. Sometimes such compensation can exceed £70,000.

Even if a business has fairly dismissed an employee it may still be left with the legal costs of defending itself and winning at an employment tribunal hearing. Those legal costs can run into the tens of thousands of pounds and are almost always unrecoverable from the employee. However, as a general rule, if a business has handled matters correctly it will be able to settle the case more quickly and cheaply than fighting it and winning.

There are established and distinctly different procedures relating to the various statutory reasons for dismissal. For example;

• in relation to redundancies, dismissals will be unfair if there is no consultation with employees or consideration of alternatives to redundancy
• in relation to long-term sickness absences, dismissals will be unfair if medical opinion isn’t obtained and considered carefully
• misconduct dismissals will be unfair if the employee does not know enough about the disciplinary case they have to answer or if they are dismissed for something else.

The devil really is in the detail and a case heard by the Employment Appeal Tribunal recently has illustrated that it is not just the procedures followed by a business but the precise charges leading to dismissal it gives that will count.

Mrs Celebi worked for caterers at college as a chef manager with responsibility for paying cash into the bank. One day £3,000 never reached the bank. She was believed to have taken the missing £3,000. The letter containing disciplinary charges referred to "loss of £3,000" but the person dismissing her believed that the reason for dismissal was "theft of £3,000". The employment tribunal hearing the case first had initially not drawn any real distinction. However the dismissal was found to be unfair by the Employment Appeal Tribunal simply because the phrasing of the disciplinary charge was not precise enough.

The Employment Appeal Tribunal has sent the case back to the employment tribunal to decide how much compensation to award.

This case is a very graphic example of the vital need for businesses to present matters in exactly the right way when dismissing employees. Had the letter in question said "theft" instead of "loss" the dismissal would have been fair.

Your business can best protect itself by taking specialist legal advice before commencing any processes that may lead to a dismissal.