What happens… if I dismiss an employee unfairly?

As an employer, sometimes having to dismiss an employee is unavoidable. It’s not pleasant for both parties, but some people just aren’t compatible with an organisation.

However, there are correct ways of doing things. An employer will need a fair reason for the dismissal, and follow their formal disciplinary process first. If you don’t follow the correct procedure, a sacked employee could claim unfair dismissal even if you have a completely valid reason for letting them go.

So apart from not following procedure, what constitutes unfair dismissal? A dismissal will be considered ‘automatically unfair’ if it relates to an employee exercising rights to do with:

  • Women cannot be dismissed for becoming pregnant
  • Family reasons including parental leave, paternity leave (birth and adoption), adoption leave or time off for dependants
  • Representation, including acting as an employee representative
  • Trade union membership and union recognition
  • Being a part-time or fixed-term employee
  • Pay and working hours including the Working Time Regulations, annual leave and the National Minimum Wage

If you somehow get the procedure wrong, or accidentally dismiss someone for an automatically unfair reason, there’s a good chance your former employee will recognise this and submit a claim to an employment tribunal.

If this happens and the tribunal agrees with the employee, there are a couple of possible outcomes:

Settlement – The tribunal may give you some time to come to an agreed settlement with the employee. The average compensation payment of £4,000 generally isn’t enough to cover legal costs, so settling with an apology, reference and smaller payment may be better to allow both parties to continue with their lives. However, the admission of guilt from an employer’s point of view may not be ideal and lead to other claims in future.

Compensation – The tribunal will order you pay the employee a fixed amount. The sum will depend on the case, with discriminatory cases leading to the largest pay outs. This will happen if a settlement cannot be agreed, and may require a further hearing along with the costs that this will accrue.

The other outcome is that you win. Be aware though that only 19% of employers win in the 40,000 unfair dismissal cases each year. There is an 81% chance that the employee will be able to claim some money from you.

The easiest way to avoid the cost and inconvenience of a tribunal is to simply get it right first time and dismiss the employee fairly.

Find out how to set up a fair procedure here – www.deminos.co.uk/how-do-i-dismiss-an-employee

Author David Ralph

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