With the UK's high risk of recession, redundancies loom. Each redundancy brings the chance of an unfair dismissal claim. Learn how to avoid these.
A recent survey shows that 3 in 10 employers are likely to make staff redundancies in the next year. A closer look into the Acas-commissioned YouGov survey reveals that 41% of large businesses are likely to make redundancies, with 20% of Small and Medium Enterprises (SMEs) expecting to do so.
There were 108 000 redundancies in the three months leading up to June 2023. In line with this, HR consultancy Ayming UK found that almost half of UK businesses expect to cut costs this year, and 37% will reduce hiring activities.
We have some simple tips to help your company avoid the cost, time and damage to your reputation of ending up in an employment tribunal.
A well-drafted employment contract, together with a comprehensive set of policies, should detail the standards of performance and conduct expected of an employee.
The policies should also outline the procedure which should be followed when those standards are breached. Ensure that copies of all employees’ employment contracts are kept and that the company policies and procedures have been communicated to and are accessible to your staff.
When it comes to claims of unfair dismissal, SMEs with little or no knowledge of employment law or access to an internal HR function can find themselves in trouble.
Employers need to make sure that dismissal is thoroughly thought through beforehand and isn’t a spur-of-the-moment retaliation to an employee’s actions.
By providing training for all staff members involved in the dismissal process, at least you'll know that the process is being conducted legally. And you could perhaps avoid a tribunal completely by ensuring all staff have equality and discrimination training in the first place!
Under the Employment Rights Act 1996, there are five fair reasons for dismissal:
Even if you’ve acted reasonably, some reasons for dismissal are automatically classed as unfair if they fall within specific areas:
If a tribunal finds that an employee has been unfairly dismissed, you might be ordered to:
You might also have to pay compensation, which depends on an employee's:
There’s a limit on the amount a tribunal can award for unfair dismissal, apart from in cases relating to:
A fair disciplinary procedure should include:
The procedure used should be compliant with statutory requirements as well as those detailed in company policy documents.
All notes should be accurate and made contemporaneously. They will help to demonstrate the fairness of the procedure used and the reasoning behind any decisions made. The follow-up letter to the employee should also communicate this to them and ensure that they are aware of the outcome and any next steps.
It can be very difficult to justify any discrepancy in the treatment of individual members of staff when compared to situations involving largely the same allegations unless there are or were any mitigating circumstances present.
Claims for unfair dismissal can be financially costly, cause reputational damage and are a drain on time and resources.
Seek advice from a professional employment law advisor as soon as possible to know where you stand and ensure your case is as robust as possible. This will ultimately save you money in the long run.
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