Morgan Russell Solicitors

Termination of employees with less than the one/two qualifying years service for 'ordinary' unfair dismissal rights

1.         INTRODUCTION

This note has been prepared as a general guidance note only and specific legal advice should be sought for each matter as individual circumstances vary. It is only a brief note and is not intended to be comprehensive. Employers always need to consider employees contractual and their other statutory rights as well.   It is also directed towards dismissals for conduct or capability reasons.

2.         THE RIGHT NOT TO BE UNFAIRLY DISMISSED

The right not to be unfairly dismissed is a statutory right.   Employees who commenced employment before 6th April 2012 qualify for this right after serving one year’s continuous service.   Employees who were engaged on or after 6th April 2012 only acquire this right after two years.

To avoid an unfair dismissal claim employers must establish one of the potentially fair grounds for dismissing.   These are illegality, misconduct, incapability, redundancy or “some other substantial reason”.  The employer must also act fairly in treating that reason as a fair reason to dismiss.

In the case of conduct and capability cases it is important that you follow your disciplinary and conduct procedures and the ACAS Code of Practice.  

3.         WHY FOLLOW A PROCEDURE?

1.  Although employees who do not have the relevant qualifying (one or two) years service cannot claim "ordinary" unfair dismissal, in some instances the right to claim unfair dismissal is not dependant upon a qualifying period (often referred to as “non-ordinary” unfair dismissal). This category includes, but is not limited to:

  • claims in relation to trade union membership or activities;
  • health and safety;
  • the enforcement of certain statutory rights; and
  • maternity, paternity etc rights.

2.  In addition there are a number of other types of claims which do not require a qualifying period, for example:

  • breach of contract/wrongful dismissal;
  • discrimination;
  • working time detriment; and
  • deduction of wages.

3.  If an employee brings a successful claim for unfair dismissal or a number of other common types of claim (including those referred to above) arising out of dismissal or disciplinary action for misconduct or poor performance, the level of compensation awarded to the employee can be affected if either party failed to follow the ACAS Code:

  • If the employer unreasonably failed to follow it, the tribunal may increase the employee's compensation by up to 25%.
  • If the employee unreasonably failed to follow it, the tribunal may reduce their compensation by up to 25%.

The tribunal must decide what uplift (or reduction) would be just and equitable. The full list of claims to which this regime applies is set out in Schedule A2 of Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA).

4.  The ACAS Code only applies to "disciplinary situations", a concept which includes misconduct and poor performance but explicitly excludes dismissals on grounds of redundancy or the non-renewal of a fixed-term contract. Whether a "disciplinary situation" can cover anything other than misconduct or poor performance is not dealt with in the Code. It is also not clear whether non-renewal of a fixed-term contract for reasons of misconduct or poor performance should be included or not.

5.  The Code is supplemented by a non-statutory guide, Discipline and Grievances at Work: The ACAS Guide, which gives further guidance on best practice. While the guide itself does not have to be taken into account by tribunals, it does contain some useful guidance developed from unfair dismissal case law, and therefore employers should not ignore it.

6.  We recommend that employers always give written reasons for dismissal and always follow a procedure where there is any risk of a discrimination claim or where there is any risk of the employee alleging that the reason for the dismissal was one of the reason that does not require the qualifying period (e.g. dismissal due to pregnancy, health or health and safety – and generally you should always assume such a risk in our view!).  Also, take care where an employee is dismissed without notice in breach of contract as breach of contract claims are also listed in Schedule A2 of TULRCA.  (In addition this is one further reason to ensure that contracts, particularly of employees with longer notice periods, include a pay in lieu of notice (PILON) clause).

7.  It also reduces the risk of a successful claim that the reason for dismissal was an unlawful one (e.g. for raising a Health and Safety issue).  This is because you will have given written reasons which would counter such an argument.

8.  The procedures are not complex in themselves and it is good industrial practise to always follow these procedures. On balance, although it involves a little more work, we recommend employers do implement them as a matter of course where any individual employee’s dismissal is contemplated. It can save you a lot in the long run!

4.         THE BASIC 4 STAGE PROCEDURE FOR DISCIPLINARY SITUATIONS

Step One - Investigation 

The Employer must carry out a reasonable investigation. This will usually involve investigatory meetings, including with the employee under investigation. Any investigatory meeting should not result in disciplinary action.  There must be a separate disciplinary meeting.

If paid suspension is necessary during the investigation, this should be as brief as possible and kept under review. The employer should make clear that the suspension itself is not in itself a form of disciplinary action. An employer should not suspend unless it has the contractual right to do so and it is necessary.

Step Two - Letter setting out Grounds and Investigation

The Employer should send the employee a letter setting out the following:

1.  the employee’s alleged conduct or characteristics, or other circumstances, which lead him to contemplate taking disciplinary action against the employee or dismissing the employee;

2.  the basis of the allegations and ground or grounds given in it and its possible consequences (including, where appropriate, the risk of dismissal) in sufficient detail to enable the employee to respond at a disciplinary meeting;

3.  any written evidence, which may include witness statements, should be provided to the employee;

4.  an invitation to a disciplinary meeting to discuss the matter, including the time and place of the meeting, which should be held without unreasonable delay while ensuring the employee has reasonable time to prepare their case; and

5.  advising the employee of his/her right to bring a companion (either a fellow worker or a trade union representative) to the meeting.

Step Three - Meeting

1.  The meeting must take place before disciplinary action is taken.

2.  Managers, employees and their companions should make every effort to attend the meeting. If the employee is persistently unable or unwilling to attend without good cause, the employer should make a decision on the available evidence.

3.  Either side should give advance notice of any witnesses they intend to call.

4.  At the meeting:

  • the employer should explain the allegations and go through the evidence;
  • the employee should be allowed to set out their case and answer the allegations; and
  • the employee should have a reasonable opportunity to ask questions, present evidence, call relevant witnesses and raise points about any information provided by witnesses.

5.  The employer must not pre-judge the outcome of the meeting.

6.  After the meeting, the employer must inform the employee of the decision in writing without unreasonable delay and notify him of the right to appeal against the decision if he is not satisfied with it.

If misconduct or poor performance is established, a dismissal would usually only be appropriate if there has been a written warning and a final written warning. Gross misconduct can justify dismissal for a first offence, but not without following the disciplinary procedure.

Written warnings should set out the nature of the misconduct or poor performance, the improvement required, and the timescale for improvement. They should also specify how long they will remain current, and the consequences of further misconduct (or failure to improve) within that period.

Step Four - Appeal

1.  If the employee informs the employer of his wish to appeal, the employee should arrange for someone appropriately more senior to hear the appeal, preferably a manager who has not been party to the original meeting.

2.  The employer must ensure that the employee is invited to attend another meeting.

3.  Again the employee has the right to be accompanied by a work colleague or union representative and must be informed of such right. The Employee also has the right to make representations at the meeting.

4.  After the meeting the employer must ensure that the employee is informed of the decision in writing and make it clear that the procedure has been completed.

General recommendations

Do not make your decision to dismiss until the end of the Step 3 meeting.

We recommend having a probationary period in the employment contract of a period from anything between one to 9 months (as you see fit) with a review just before the expiry of that period (and regularly before then, wherever practicable, as necessary) clearly stating that where an employee’s standards are below expectations they may be dismissed. Notice periods during the probationary periods should generally be shorter than your standard notice periods. (Do, however, bear in mind that short notice periods can be detrimental to an employer if recruitment for such positions tends to take some considerable time.) We also recommend considering an express right to extend the probationary period. This will help you to manage your human resources with least risk of claims. You need to be fair but decisive if the employee’s work is below expectations early on; otherwise you will only have to deal with it later with a heightened risk of a claim!

Further Information

If you have any questions regarding the above or require additional information or assistance, please contact Melanie Smith or Anne-Marie Pavitt on +44 (0)1372 461411. 

The data contained within this document is for general information only. No responsibility can be accepted for inaccuracies. Readers are also advised that the law and practice may change from time to time. This document is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.
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