A warning to all employers: the average payout for an unfair dismissal tribunal claim is almost £30,000.
Now, chances are, you haven’t ever faced a tribunal claim. But that doesn’t mean you aren’t at risk of having to fork out thirty grand.
Since the Supreme Court ruled that tribunal fees are a barrier to justice, claims against employers have soared by a staggering 90%. Not all those claims will be genuine, either.
Put it this way: if you dismiss someone, nothing can stop them making an unfair dismissal claim against you.
And if you make a bad choice for representation, here’s what you’re looking to pay out:
- Legal fees: £11,546
- Settlement: £16,543
- Total: £28,089
For most businesses, that’s a serious amount of money. And it gets worse: the maximum award has just risen to over £98,000.
So when you do need to dismiss someone, here’s the safest way to do it—just in case you ever face a tribunal claim…
Follow a fair dismissal process
Ending someone’s contract of employment is never an easy decision. But at some point, you know that it’s the right move for you, your people and your business. But you must make sure you have one of five fair reasons for dismissal:
- Statutory illegality.
- Some other substantial reason (SOSR).
Let’s break each one down
Although “conduct” sounds quite a simple reason, it covers a wide range of acts as different as stealing from your business to failing to follow management instructions.
Plus, poor conduct doesn’t have to happen in your workplace. If it happens outside of work and has the potential to affect the employment relationship, it’s still a fair reason for dismissal.
Usually, an internal disciplinary policy will contain examples of what you class as misconduct, including what the business considers to be gross misconduct.
You can dismiss an employee for lack of capability due to their performance, lack of qualifications or illness.
But before dismissing an employee for capability, you should usually offer extra time and support to help them reach the performance level you expect.
A redundancy situation happens in one of three situations:
- Your whole business closes.
- The place of business your employee works at closes.
- The need for employees to do work of a particular kind is reducing or has reduced.
The number of redundancies you propose affects the type of redundancy procedure you must follow.
Redundancy advice can make all the difference in these situations.
Statutory illegality questions whether the continued employment of your employee will result in a breach of statutory laws. If you’re unsure what that means, don’t worry.
Say you employ someone as a driver but they lose their driving licence. To keep them working in that role would be illegal. But remember, it’s not whether you believe the employment to be illegal—it must be the case.
Lastly, before dismissing your employee, see if you have an alternative (and legal) role for them to do instead.
Some other substantial reason (SOSR)
SOSR is something of a catch-all term where you must show that you have a substantial other reason to justify dismissing an employee. Here are some examples:
- A business re-organisation.
- Conflicts of interest.
- Personality clashes.
- Where there is a breakdown of mutual trust and confidence.
If your reason is not substantial, or insufficient to justify the dismissal, it won’t fall within this category.
As well as having a fair reason for dismissal, you have to show that you’ve followed a fair procedure and that the dismissal was reasonable in all the circumstances. Only once you prove each requirement, it will be a fair dismissal.
Check your company’s tribunal risk
Now’s the perfect time to get a free, no-obligation tribunal risk check-up. Get an assessment from a qualified, UK-based tribunal expert with clear advice to save you at least £30,000. Find out more
James Potts is Associate Director and Head of Legal at Peninsula