Chop and Change: A guide to letting staff go

'Letting go' of employees is a difficult task for employers. However, unproductive employees can weigh a company down, and sometimes there is no option but to address the problem. David Gordon, solicitor, DG Law, explains how managers should go about letting staff go.

The key consideration when ending a contract of employment is to make sure you’re doing it by the book. The very process of dismissal is administered by vast quantities of employment law. Most employers may be surprised to discover just how many laws there are protecting their staff; often there more than are shielding the companies themselves! The longer the period of the employee’s service, the more complicated and extensive these laws become. Even in cases where there is no detailed written contract of employment, workers still have automatic rights from the day they step foot inside your offices. The process of dismissal is a stormy sea that requires careful navigation from the outset.

Unless an employee has committed a breach of contract or an act of gross misconduct, the process of firing someone can take the form of a lengthy consultation process. Employers are forced to ‘jump through hoops’ to comply with the various laws and legislation. Firing someone can occasionally be dressed up as a redundancy, but when you look at the wider picture there can be other agendas. HR consultants are generally well versed in employment laws – if your company does not have one in house, it may be worth seeking short-term professional advice to ensure you stay on the right side of the law, and for peace of mind.

Any breaches of these various laws, however unintentional, usually lands the employer in an employment tribunal situation. These proceedings can be sympathetic to the employee; so are best avoided if possible. Before taking any hasty action, a company should embark upon a thorough housekeeping exercise to check that its current terms do not breach existing legislation. This is particularly prudent with regards to discrimination, bullying etc. The next stage is to make sure the grounds for dismissal are known to the employee. Considerations such as performance and economic grounds should be acceptable, as long they are set against clear and objective criteria. The employer also has to make sure they follow statutory rules on the procedure of consultation; this generally involves giving the employee the right to appeal if they feel they have been wronged in any way.

If an employee has been working for you for longer than two years, they have rights in terms of what levels of redundancy they qualify for. Finally, any terminated contract should be enshrined in a compromise agreement which protects the employer against the risk of future claims arising. These are documents that guarantee both parties a full and final settlement, although you may find that you must concede to gardening leave, a pay off or other such incentive. Compromise agreements are private and confidential, so there is no chance your other staff will have access to details of pay offs or other inducements.