How You Can Avoid Costly Unfair Dismissal Cases in Your Business

A successful unfair dismissal case against a business can cost the employer up to two years’ remuneration in compensation.

A successful equality case can have a compensation award made against an employer for up to two years’ salary and, in certain gender discrimination cases – particularly involving maternity issues – awards have also tended to be quite high.

Review Your Contracts

When providing an employee with a written contract, make sure that, in addition to salary and the usual package items, it includes a grievance procedure and a disciplinary process that fit your business. Don’t just copy a standard contract from the internet thinking the disciplinary process looks good, but it may not be appropriate. You must follow your own procedures and policy to the letter.

Employment Tribunals and Equality Tribunals are often more focused on the process the employer has in place to deal with disciplinary matters and whether that process was followed by the employer. A surprisingly low amount of emphasis is often placed on any employee wrongdoing.

It’s important to note that many employers lose unfair dismissals cases not because the employee’s conduct did not merit dismissal but because the employer did not have in place, or did not follow, a proper process in dealing with the matter.

Don’t Act in the Heat of the Moment

As an employer, you should never fire a person in the heat of the moment. Take time away from the incident and calm yourself before taking any further action. Always call your legal or employment law adviser first. Even where the misconduct at issue may be obvious, there will almost always be a need to investigate the matter before taking further disciplinary action.
The employee in question has the right to know the case against him or her, the right to reply to the allegations, the right of due consideration, the right to representation by a colleague, and the right to an appeal against the decision. The employer should set out the allegations clearly and in writing at the beginning of the process and carefully document each stage of the process.

Know Your Notice Periods

To avail of the protections afforded by the unfair dismissal legislation, an employee generally needs 12 months’ service but this includes their notice period. Therefore, as an employer, don’t leave an evaluation of the employee’s suitability for the role until month 11 as, with one month’s notice, employees may then have their 12 months and the protection of the legislation. An employee does not need any minimum period of service to bring an equality claim. There have been cases of companies sued for discrimination in their interview process and an award being made against them in respect of a person who was never even engaged as an employee.

Protect Your Business

If your client lists and intellectual property are important to your business, get your legal team or HR consultant to help you get appropriate restrictive covenants drafted into the employment contract so that when your employee leaves, part of the value of your business does not leave with them.