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Treat your employees fairly or face the penalty

07 May 2010

Employers often dismiss ‘problem’ employees with less then one year’s service without referring to their own procedures or the relevant ACAS Code of Practice. However, recent Tribunal figures serve as a warning to employers that it may be possible for such employees to pursue Tribunal claims.

Although employees with less than one year’s service cannot usually pursue unfair dismissal claims, there are exceptions, for example, if they are dismissed for whistle blowing. Recent figures show that there has been a dramatic rise in the number of claims from employees alleging they have been sacked or mistreated for whistle blowing at work. These figures have highlighted a tenfold increase over the last decade – with payouts averaging £113,667. 

Other exceptions to the ‘one year rule’ include when an employee is dismissed for:

  • becoming pregnant
  • seeking to rely on certain rights e.g. the right to the minimum wage
  • joining a trade union or participating in trade union activities
  • exercising the right to be accompanied at a disciplinary or grievance hearing

This list is not exhaustive. Not only would an employee not need one year’s service in order to bring an unfair dismissal claim in these circumstances, the dismissal would also be ‘automatically’ unfair and in some cases, there is no limit on the amount of compensation that can be awarded. It is therefore essential that employers take advice before dismissing regardless of an employee’s length of service.

Employers should also be aware that employees do not need one year’s service in order to pursue discrimination claims and the figures confirm that more discrimination claims are being pursued than ever before. If an employee therefore has characteristics which set them apart from the majority of the workforce – for example, if the employee is the only woman in the workforce or homosexual or if the employee is of a certain age or race – then employers need to take great care before dismissing. A similar scenario exists when dealing with employees with health problems, as they may be protected by disability discrimination legislation. An Employment Tribunal may infer that an employee has been unlawfully discriminated against and again, the amount of compensation awarded can be unlimited. The employer would need to prove an alternative and non-discriminatory explanation for the dismissal – for example, the employee was dismissed because he or she had committed gross misconduct.

What should employers do?  

  • Take legal advice to discuss the facts and circumstances and whether any exceptions to the ‘one year rule’ may apply.
  • Follow fair and transparent disciplinary and dismissal procedures with all of their employees – regardless of their length of service. Indeed employers may be contractually required to follow their own procedures with all of their employees.
  • Ensure their disciplinary and dismissal procedures comply with the ACAS Code of Practice on Disciplinaries and Grievances and that equal opportunity and whistle blowing policies are up to date.
  • Treat all employees consistently.
  • Don’t be complacent – employees are increasingly bringing claims which don’t require one year’s service as a way around the ‘one year rule’.

Other points for employers to remember:

  • When calculating if an employee has one year’s service, you must take account of the minimum one week statutory notice period. Therefore, any employee can pursue an unfair dismissal claim once he or she obtains fifty one weeks service.
  • Employees are entitled to notice, or to be paid in lieu of working their notice period, unless guilty of gross misconduct.
  • Employees must be paid their holidays which have accrued but are untaken at the time of their dismissal.

For further information contact Sarah Furness at Hay & Kilner Solicitors on 0191 232 8345 or email sarah.furness@hay-kilner.co.uk.

Please note:
This article is not legal advice; it is intended to provide information of general interest about current legal issues. Please contact us to discuss how the contents of the article may affect you.