Unfair dismissal law for businesses
It's a scenario that no business owner wants to face. A member
of staff has been dismissed for legitimate reasons but within days
a letter arrives from a solicitor saying that he (or she) is
bringing a case of 'wrongful dismissal'. This is a difficult
and daunting situation. This guide will help you
- How does it happen?
- What's at stake
- What to do
- Preventative action
How does it happen?
Under the law there is a long list of circumstances under which
dismissal is automatically unfair. Failure to follow
procedure is the most common. There are also complications
around firing pregnant women, trade union activists or
whistleblowers, amongst other situations.
- Failure to follow procedure is the most common cause
- Look out for pregnant women, activists and whistelblowers in
What's at stake
When a wrongful dismissal action goes against the employer, the
court has the right to levy a fine of up to £8,000 plus an
additional charge of up to £55,000 based on loss of earnings. In
addition, you have to consider the impact of the case on the
company's reputation and morale among staff.
- Heavy fines
- Damaged reputation and staff morale
What to do
If a former employee does take action, you have a simple choice
- either fight or admit fault and attempt to settle out of court.
Settling can save a lot of disruption. If you decide to fight
you should ensure that you have all the documentation relating to
the dismissal - records of poor timekeeping, customer complaints
etc. With good records, you are in a much better position to defend
yourself. It's highly advisable to seek professional legal advice
- Fight or settle
- If you fight, make sure you have sufficient documentation
- Seek professional legal advice
There are measures that can help avoid this situation. Unless
your rules are clear, the dismissed employee may well feel a real
sense of grievance, and if you don't follow procedure you give that
individual an open goal when it comes to building a case. So your
first step should be to draw up clear HR policies, including a
comprehensive guide to what constitutes misconduct and a clear
guide to disciplinary procedures within the company. Apply the
rules fairly at all times.
- Draw up all the procedures and rules
- Stick to the rules at all times
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