Many employers are still not doing enough to protect themselves from unfair dismissal claims, despite applications to the Employment Tribunals having seen a sharp rise since fees were abolished, an employment law expert has warned.
Lindsey Knowles, Head of Employment Law at Kirwans law firm said she regularly works on unfair dismissal cases – where employment is terminated without a fair procedure or reason – that could have been easily prevented had employers followed some simple processes; and says that many firms don’t realise they are more at risk than ever before of being hit with a claim.
The result, she said, could lead to damaged reputations, increased insurance premiums, and in the worst-case scenario, the bankruptcy of the company.
Ms. Knowles said: “Since the abolition of tribunal fees in 2017, the number of claims has been steadily rising, with a report by GQ Littler revealing earlier this year that they had jumped by more than 25 per cent to 35,430 between 2018/2019.
“The Ministry of Justice’s annual statistics have revealed that, in 2018/2019, there were 660 claims that received compensation for Unfair Dismissal (up 23 per cent compared to 2017/18). The maximum award was £948,000 while the average amount awarded was £14,000.
“As these figures show, a successful claim could be devastating for smaller companies, yet many business owners still aren’t taking precautions to avoid this type of claim.
“Most responsible employers won’t recognise that it’s not just about protecting themselves against claims; it’s also about acting in an ethical and proper way towards their employees. By taking the proper steps to ensure all the correct processes and procedures are in place, they won’t just be creating a defence against claims, they’ll also be making their employees feel more secure by knowing that these mechanisms are in place.”
Here, Ms. Knowles sets out some key steps that all employers should take to protect themselves against employment claims:
1) Ensure all employees have up-to-date employment contracts
These contracts form the basis of the agreement under which both employee and employer work and sets out standards and ways of working that must be adhered to. Should a tribunal application ever be made against your business, they will come under intense scrutiny, so should be as detailed as possible.
If you make your disciplinary procedures part of an employment contract then make sure you follow them, or the employee could make a breach of contract claim against you.
Of course, it’s not enough to simply have these contracts and procedures in place; you also need to demonstrate that you abide by them. Which leads us to the second point . . .
2) Make sure disciplinary procedures follow the Acas Code of Practice
The Employment Act 2002 made disciplinary procedures a legal requirement, so it’s vital that you have them in place. And while it’s not a legal requirement to follow the code, it is strongly advised; if a claimant wins an employment tribunal case against you and you didn’t follow the code when dealing with them, their award could be up to 25% more than if you had.
3) Tell your employees what the disciplinary rules are
In the day-to-day running of the business, it can be easy to forget the basics when it comes to employees – such as making sure they understand the disciplinary rules. But by law they have to be clearly written somewhere so that staff can check them at any time.
The best way of covering this is to make sure they’re set out in a document that you know staff will see and, ideally keep. That could be, for example, a statement of employment or a staff handbook.
The rules must make it clear as to what would lead to someone facing disciplinary action, what that action could be and a named person to appeal to if they’re unhappy about a disciplinary decision.
Again, providing this information is a vital part of what’s expected of you as an employer. A failure to do so could result in a successful claimant being awarded two to four weeks’ pay.
4) Genuinely try and resolve the situation
No matter how much your employee has irritated you, remember that there are often underlying reasons behind their behaviour. Don’t just pay lip service to the Acas Code of Practice; follow it to the letter and listen to what your employee is saying. It could be that they do have a point, and that other staff members may feel the same. Hear them out and consider whether there are constructive actions you could take to improve the situation.
5) Take legal advice before making any dismissals
You’ve followed all procedures, but the situation hasn’t improved and you’re now ready to dismiss the employee concerned. But before you do, press the pause button and consult a solicitor to ensure that, should a case by brought to the Employment Tribunal, you’ll be well-placed to defend yourself. A legal expert will review your actions taken so far and evaluate whether or not you’re in a strong position to be able to dismiss your employee.
6) Be aware of when it’s definitely not ok to dismiss an employee
In most cases, the employee has to have been employed by the organisation for at least two years in order to bring an unfair dismissal claim.
However, there are some dismissals which are automatically unfair no matter how long the employee has worked for you; that is, the Tribunal will rule that the employer unfairly dismissed an employee if the reason for the dismissal was in relation to the employee exercising specific rights connected to:
- Family reasons, such as parental, adoption and paternity leave (be that birth or adoption) or time off for dependants;
- Joining a trade union or acting as an employee representative;
- Part-time and fixed-term employment;
- Working hours – including the Working Time Regulations and annual leave;
- Pay such as the National Minimum Wage.
7) And be aware of when it is . . .
As far as the law is concerned, there are five potentially fair reasons in which employers can justify conducting a dismissal, so consider whether the dismissal is related to any of these reasons:
- Employee conduct;
- Employee capability or qualifications for the job;
- A redundancy;
- A statutory duty or restriction that prohibited the employment being continued;
- Another substantial reasons of a kind that justifies the dismissal.
Don’t forget, you also need to demonstrate that you acted reasonably when you chose to dismiss the employee for one of those reason and that your decision was made after all the relevant procedures and processes had been followed.