Navigating the dismissal procedure can be challenging, especially when you own an SME and probably don’t have any dedicated HR staff. A clear and legally compliant approach is essential to avoid potential claims of unfair dismissal if you end up dismissing an employee as part of a disciplinary process.
Keep reading for our guide to the dismissal procedure, outlining the key steps every SME should follow.
Why SMEs must get disciplinaries right
For SMEs, a poorly handled dismissal procedure can lead to more than just legal consequences – it can harm employee morale, disrupt the business, and damage your reputation. Following the correct procedures demonstrates fairness and professionalism and helps to protect the business against claims at an employment tribunal.
The law provides specific protections for employees, particularly those with over two years of continuous service who have protection against unfair dismissal. However, dismissing employees with shorter service must also be handled carefully as claims can still be made, for example, regarding discrimination.
Understanding the ACAS Code of Practice
The ACAS Code of Practice is not legally binding, however with that being said, employment tribunals take it into account when ruling on dismissal claims. Failure to follow the Code of Practice could result in increased compensation payouts – up to 25% more – if a tribunal finds the employer at fault. The Code of Practice provides clear guidance on how employers should conduct a disciplinary process that leads to dismissal. Below we have summarised the guidance for you.
Establish a disciplinary policy
A company that employs even one person must ensure that they have a documented disciplinary policy. This policy should outline the standards of behaviour and performance expected and the process that will take place if staff fail to meet them.
Conduct a thorough investigation
Before jumping to conclusions and assuming guilt, it is vital to investigate whatever situation has occurred. You should gather evidence, speak to relevant parties to obtain witness statements, and document your findings. An investigation ensures the dismissal is based on facts which is a critical aspect of fairness.
Hold a formal disciplinary hearing
If the investigation process determines that there is a case to answer, you should invite the employee to a disciplinary hearing, providing adequate notice and sharing all relevant evidence beforehand. You should also detail the allegations against them clearly and the potential outcomes of the meeting, which might be a disciplinary sanction or that dismissal could be considered in cases of gross misconduct. In order to ensure impartiality, the person who carried out the investigation should not then chair the disciplinary hearing. The employee should also be informed of their right to be accompanied by a colleague or a trade union representative. The hearing allows the employee to present their case, and for you as the employer, to ask any questions as required. It’s essential to approach the discussion with an open mind and listen to their explanation. Make sure that notes of the meeting are taken so that there is a record of the discussion.
Make a reasoned decision
After the hearing, you need to decide on the appropriate outcome. The decision should align with the severity of the misconduct or performance issue. Potential outcomes can include:
- Written warning
- Final written warning
- Dismissal (with or without notice)
The decision should be clearly communicated in writing, outlining the reasons and referencing any evidence considered. If a form of warning is issued, the letter should state how long that warning will be live for. The outcome letter should also inform the employee of their right to appeal. Appeals should again be heard by a different manager to maintain impartiality and fairness.
Avoiding common pitfalls
Even with the best intentions, small business owners can make mistakes during a dismissal procedure, usually because of a lack of knowledge or from being poorly prepared. Some of the most common errors can include:
- Skipping steps in the procedure – rushing the process undermines fairness and exposes you to an increased risk of a tribunal claim.
- Lack of documentation – always keep records of evidence, meetings, and letters to demonstrate compliance if your process is challenged.
- Failure to consider mitigating circumstances – personal issues or workplace factors may influence behaviour and it is important to look at the whole picture before reaching a decision.
Following the ACAS Code of Practice helps to avoid these mistakes and as a small business owner, you may also consider taking independent advice or bringing HR professionals in to run the process on your behalf.
Get in touch to learn how HRX can help with the dismissal procedure
Disciplinaries and dismissals are never easy and always carry an element of risk, but by following the ACAS Code of Practice and adopting a fair, consistent approach, you can mitigate the risk and manage the process with confidence.
By using HRX, your employees can have direct access to your company’s disciplinary policy or staff handbook via their self service log in so that they can see what is involved if they are in a disciplinary situation. All documentation relating to a disciplinary process including, evidence, letters, and meeting notes can also be stored on an employee’s record so that you have everything to hand if needed. To find out more about HRX, book a demo now or sign up to our FREE 30 day trial to see for yourself.
