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Statutory Dismissal and Disciplinary Procedures - As simple as 1, 2, 3? |
by:
Dave Offen |
The DTI announced the introduction of the statutory procedures in October 2004 as being ‘as simple as 1,2,3.’ The procedures were intended to impose minimum standards when dealing with dismissal and disciplinary matters and to encourage employers and employees to resolve their disputes in the workplace. Our experience of the procedures over the last 8 months suggests that they are far from simple. We have set out below some of the pitfalls of the new regime.
“As long as you follow the statutory procedure your employees cannot claim unfair dismissal?”
Wrong! Employers are now faced with additional procedural hurdles that they must comply with in order to avoid a claim not only of unfair dismissal, but that it was automatically unfair. That is not the end of the matter - the normal principles of fairness continue to apply. Keeping to the procedures does not necessarily protect the employer against an unfair dismissal claim.
Does the statutory procedure only apply to disciplinary dismissals?
No. The new procedure applies to most situations where dismissal might be the outcome (with a limited number of exceptions). Employers who make an employee redundant (other than under a collective redundancy) or look to dismiss an employee for lack of capability or following a business re-organisation will need to comply with the statutory procedure. The procedure even applies where an employer decides not to renew a fixed term contract as this is deemed to be a dismissal by law. Whilst many employers are used to having a procedure to deal with disciplinary matters, they are often not used to following any sort of procedure for other types of dismissal. This is where an unwary employer can get caught out.
What do you have to do before dismissing an employee for redundancy?
The statutory procedure does not apply to collective redundancy situations, that is where 20 or more redundancies are made within a 90 day period. However, where less than 20 employees are to be made redundant, an employer must set out in writing the circumstances that have led them to contemplate dismissing employees for redundancy. In this letter, the employer will need to set out the grounds for the decision to make redundancies and include details of the selection criteria used or proposed and any alternative positions. After the employee has had a reasonable opportunity to consider the letter this should be followed by a meeting with the employee. After the meeting the employer must confirm their decision and, if they are dismissed, inform the employee of their right to appeal.
There is some debate about whether employees have the right to be accompanied at redundancy consultation meetings. Recently, the Employment Appeal Tribunal decided in Taskforce (Finishing and Handling) Limited –v- Love that the right to be accompanied does not apply to redundancy meetings. However, the Employment Act 2002 provides that meetings must be conducted in a manner that enables both employer and employee to explain their cases. It is argued by some that this includes the right to be accompanied. We will need further case law to clarify this.
What about warnings?
Another question we are frequently asked is what an employer should do about warnings. Warnings are outside the remit of the statutory disciplinary procedure. However, the procedure followed in relation to warnings is likely to be very relevant whenever an Employment Tribunal considers a claim for unfair dismissal. The best advice is for employers to have given a series of warnings prior to dismissal in all but the most serious cases. Where an employer is unsure of the likely outcome of a disciplinary hearing but one option could be dismissal, they will need to follow the statutory disciplinary procedure even if, in the end, only a warning is given.
Do you need to follow the procedure when dismissing an employee with less than one year’s service?
Dismissing employees with less than one year’s service without following the statutory procedure will not give them the right to claim automatic unfair dismissal as they do not have the relevant period of continuous service. Further, failure to follow the statutory procedure does not by itself give rise to a claim in respect of which compensation can be awarded. Many employers have therefore ignored the statutory procedure when dismissing such employees. However, if the employee has or might have other claims arising from their dismissal which do not require a year’s service to bring them, such as for race, sex or disability discrimination or unlawful deduction from wages, the employer should ensure that they do follow the statutory procedure. Further, if the employee is successful in one of the other claims and can show that the employer was at fault in not following the statutory procedure, the Employment Tribunal will increase the level of compensation paid to the employee by between 10 and 50 per cent. As compensation in discrimination claims is not capped, the cost of failing to follow the statutory procedure in such cases could be considerable. In view of this, unless an employer can be certain that the employee has no other claims, we would advise that they follow the statutory procedure when dismissing employees with less than one year’s service.
Many employers reviewed their disciplinary procedures in October 2004 but did not look at their other dismissal procedures. As the first anniversary of the statutory dismissal and disciplinary procedure approaches, employers should ensure that they take on board its full implications. Far from being as simple as 1,2,3, the statutory procedure is often confusing and difficult to apply.
This bulletin is prepared and published by Cripps Harries Hall for the general interest and benefit of readers. It is not intended to be a definitive analysis of the law or other issues relating to the subject matter of each article. Advice should be taken on specific issues before you take or decide not to take any action. The practice is regulated by the Law Society.
About the author:
For further information contact:
Cripps Harries Hall LLP
Telephone: 01892 515121
Website: www.crippslaw.com
Email: info@crippslaw.com
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