ENDING THE RELATIONSHIP


It is likely that at some point you will have to let an employee go for one reason or another.


All employees are entitled to notice of termination after they have been with you for one month. Sometimes, the notice you must give an employee is actually longer than their contractual notice period, because statute prescribes minimum notice rights.


The exception is if they are guilty of a very serious breach of their obligations – usually called gross misconduct – in which case they can be dismissed without notice (also called summary dismissal).


In every case, even gross misconduct, there must be some element of procedure before you terminate their employment. Otherwise the dismissal can be unfair.


Unfair dismissal


Once an employee has acquired two years' service, dismissing them without a fair reason or without following a fair process can make you liable to pay them compensation of up to a year's pay (subject to a statutory cap).


There are only five potentially fair reasons for dismissal:


 capability  conduct  redundancy  illegality (i.e. continued employment would be unlawful)


 some other substantial reason.


These categories of dismissal have been the subject of much case law over the years and it is important to take legal advice before relying on any of them.


Claims and settlements


Employees can enforce most of their rights by bringing a claim in an Employment Tribunal. Since the abolition of Tribunal fees in July 2017, the volume of claims has been increasing rapidly.


In the Tribunal system, each side usually pays their own legal costs whether they win or lose. Many employees have insurance cover for legal costs, often as part of a household insurance policy.


Terminations during the first two years of employment


During this period, employees do not have legal protection against unfair dismissal (except in certain special cases), so the risk of claims is lower. However, be wary of some common traps:


 are you certain about their length of service? Was the individual involved in the business in some way before the start date on their contract?


 do not leave things until the last minute (or week!) as by then it may be too late to dismiss before the two year anniversary


 discrimination risk can exist with all terminations, regardless of length of service


 you must still pay all amounts due to the employee, including holiday pay.


Before bringing a Tribunal claim, an employee usually has to go through a compulsory conciliation process via ACAS. This gives the parties time to explore settling out of court. Employees can waive claims (either in a settlement agreement or in an ACAS document called a COT3). If you go down the settlement agreement route, the employee must receive independent legal advice


Wedlake Bell’s Key Knowledge Guide to Employment Law for New Businesses


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