Ever found yourself in hot water by sacking someone without following the rules? Perhaps it was in the heat of the moment. Or maybe you just didn’t know what you were supposed to do.
If a former employee is claiming unfair dismissal against you, it can be daunting and you may be wishing you’d taken legal advice sooner.
However, all is not lost. Even if you’ve dismissed the employee unfairly, there are various things you can do to protect your business from paying large sums in compensation.
Here are a few tips to help ensure you pay no more than you have to.
1 The ex-employee can only recover what they’ve actually lost
Even if a dismissal was unfair, the ex-employee will still have to show they’ve suffered financial loss.
Other than the basic award (which is calculated in the same was as a redundancy payment), compensation is calculated by reference to lost earnings. This means that if the ex-employee finds another job very quickly, their compensation will be minimal and possibly nothing.
Someone who claims unfair dismissal is required to mitigate their losses. This means that they should be job hunting in same way as they would be if they weren’t bringing a claim.
Ask the ex-employee for evidence that they’re applying for work. Make it clear that this is an issue you will raise at the hearing – they can’t just sit back and wait for the compensation to roll in.
2 Would a fair procedure have made any difference anyway?
If the unfair dismissal claim is based on a failure to follow a fair procedure, an employment tribunal will ask whether a fair procedure would have made any difference. If the answer to that question is no, then a tribunal may find that, although the dismissal was unfair, compensation should be limited.
Sometimes, this means that the tribunal will consider how long it would have taken to go through a fair procedure. The employee will then be compensated only for their lost earnings for that period, usually just a couple of weeks.
Alternatively, a tribunal may decide that the employee would only have had, for example, a 30% chance of being sacked if you’d followed a fair procedure. In these circumstances, the compensation will be reduced by 30%.
3 Tribunals don’t like awarding compensation to guilty people
When determining whether or not you have dismissed fairly, an Employment Tribunal is not interested in whether the employee is guilty of the misconduct.
The issue is whether you had a genuinely held belief that the employee was guilty and whether you reached that conclusion after a reasonable investigation and a fair procedure.
However, when deciding the amount of compensation, it’s a different matter. The tribunal will consider whether there is any fault on the part of the ex-employee. If there is, they have a discretion to reduce the compensation by up to 100%.
4 Would you be better off settling the claim?
Dealing with employment tribunal claims against your company can be costly, stressful, and time consuming.
Find out at an early stage how much the employee is claiming. You’ll be assigned an ACAS officer who will be able to liaise with the employee on your behalf. If their claim is relatively low, you may decide that it makes more commercial sense to settle it rather that defending it all the way to a tribunal.
If you need help responding to an employment tribunal claim, please feel free to contact Andrew Crisp who will give you all the assistance you need.