Managing disputes: avoiding problems with dismissal

Section 5 of the Personnel Today Management Resources one stop guide on managing disputes. Other sections.

Inevitably, disputes over an employee's conduct or performance will sometimes end in dismissal. The most important thing for the employer is that the dismissal is fair - and that it can be shown to be fair.

Following the policies and procedures outlined in the previous chapters will go a long way to ensuring this. In this chapter, we give more detail on how the courts decide what is a fair or unfair dismissal.

Acas emphasises that dismissal should be the final step for the employer and taken only if, despite warnings, conduct or performance does not improve to the required level within the specified time period. According to the tribunals, the decision to dismiss must be reasonable in all the circumstances of the case.

Unless the worker is summarily dismissed for gross misconduct, they should receive the appropriate period of notice or pay in lieu of notice. Employees are entitled to at least one week's notice if they have worked for at least a month but less than two years. This increases by one week up to a maximum of 12 for each completed year of service. If the contract of employment allows for a longer period of notice then this must be applied.

The burden of proof in unfair dismissal cases

Employers have a duty under the Employment Rights Act 1996 (ERA) not to dismiss employees unfairly.

Once it is established that a dismissal has taken place, the onus is on the employer to show the reason for the dismissal, and that this reason falls within one of the categories set out in section 98(2) of the ERA as potentially fair reasons for dismissal:

In establishing the reason for the dismissal, you need to show the set of facts or beliefs you acted on in dismissing-but only those you were aware of at the time of the dismissal.

You also need to demonstrate that you acted 'fairly' in the circumstances. In the past acting fairly has in large part meant following a fair procedure. Tribunals have generally looked at whether employers have followed their own disciplinary procedures, and whether they have taken heed of the Acas code of practice on discipline and grievances - the sophistication of their procedures being weighed against their size and resources.

Now of course, this is likely to change given the new statutory disciplinary and grievance procedures coming in October 2004. However, even if the statutory procedures are followed, the dismissal may still be judged unfair if taking additional actions beyond the minimum statutory ones would have prevented the dismissal - or if other aspects of dismissal law are breached.

This has left many employers feeling unsure about their duties, and is likely to lead to many hours of argument in the tribunals about whether a particular action would have made a difference to a decision to dismiss.

To simplify matters for employers, Acas has included in its new draft code of practice the key principles of reasonable behaviour that employers should follow to be confident of a fair dismissal.

Was your behaviour reasonable?

Was the dismissal within the range of reasonable responses?

Procedure is only one aspect of fairness. Whether the decision to dismiss was appropriate and proportionate to the problem is another difficult question that has complicated the area of fairness. The approach the tribunals have taken is the 'range of reasonable responses test',¹ which recognises that there are several courses of action open to the employer in any situation, from the severest to the most lenient. The tribunal must decide the matter not by asking which course of action it would have chosen, but by asking whether the one the employer in question chose was reasonable, and not irrational or perverse.

Conduct dismissals

A key element of fairness in dismissals for misconduct is the adequacy of the employer's investigation.

Guidance on the approach tribunals take in misconduct cases was set out in what has become known as the 'Burchell test'.² A tribunal will consider:

In other words, it is not necessary to have conclusive proof of the misconduct, just a reasonable belief. Though there is no burden on the employer to prove it acted reasonably, it will still normally be required to produce some evidence to show that the three parts of the above test were satisfied.

Once the tribunal has considered this, it will go on to consider whether the dismissal fell within the range of reasonable responses.

A common problem that arises in cases involving conflict between employees is whether it is fair to discipline those involved in different ways. The tribunals have held that this is possible as long as the decision to do so is a reasonable one in light of all the facts.

In the case of UK Coal Mining Limited v Raby,³ for example, two employees got into a fight. The man claiming unfair dismissal started the fight by tapping his colleague with his helmet after he was verbally provoked. He had a written warning on his disciplinary record from several years earlier, which should have been wiped after 12 months (company policy in line with Acas guidance). He was dismissed because of his record and the fact he started the fight, while his colleague was not.

The tribunal decided the applicant was justified in claiming this was unfair: it was not reasonable to base the decision on who struck the first blow given that it was not especially violent and that it had been provoked verbally. In addition, the applicant's previous warning should not have been on his record and, therefore, should not have influenced the decision. This case highlights the importance of keeping disciplinary records up to date.

Capability dismissals

Capability is defined in the ERA as that skill, aptitude, health or any other physical or mental quality necessary to do the job. It also includes qualification meaning any degree, diploma, or other academic, technical or professional qualification relevant to the worker's position.

Dismissals under this heading are usually either for incompetence or for ill health.

To satisfy the fairness test, a tribunal will want to know that the employer honestly believed the employee was incapable of doing the job on reasonable grounds, based on a full and careful investigation of the facts.

In procedural terms, the panel is likely to ask whether before dismissal the employer carried out a proper investigation or appraisal of the employee's performance in their role, and tried to find out what was wrong. Had the worker been made aware of complaints against them over a period of time - even if they were senior enough to monitor their own performance? Had they been warned of what would happen if performance failed to improve? Had they been given a reasonable chance to improve and offered training and assistance to do so?

These kinds of cases will offer few chances to use the 'no-difference' defence - ie, that doing anything beyond the statutory minimum dismissal and disciplinary procedures would not have affected your decision to dismiss.

However, in extreme cases a tribunal might still find a dismissal fair even if there has been no warning to the employee and no chance given to improve - for example, where no amount of training or assistance could possibly make a difference, and/or where one mistake could have potentially disastrous consequences.

Long-term ill health

When dismissing on grounds of long-term ill health a fair dismissal will normally require consultation with the employee, medical investigation and consideration of suitable alternative work.

In most cases the employer should take account of the employee's own opinion of their illness, and should take reasonable steps to find out the true medical position.

The decision to dismiss is not a medical decision, but an executive one based on medical information. But even where medical evidence has been obtained, this does not remove the duty to consult the employee personally.

The tribunal will ask whether, if no suitable alternative work was available, the worker was informed of the likelihood of dismissal before the event.

Persistent short-term absence

This requires a different approach. The tribunal will ask whether the employer has conducted a fair review of the worker's attendance record and the reasons for absences, and given the worker the opportunity to give their point of view. There is no obligation to obtain medical evidence, as this is unlikely to produce anything of use. The crucial question is did the employer warn that the employee may be dismissed if things did not improve?

However, the Employment Appeals Tribunal (EAT) has said that following a disciplinary procedure involving warnings is not appropriate in this kind of case⁴ and that the approach should be one based on sympathy and compassion. The factors which should be taken into account are: