The law of Unfair Dismissal is hardly new; in fact it first came to prominence back in the early 197...
The law of Unfair Dismissal is hardly new; in fact it first came to prominence back in the early 1970s. Given the age of the legislation why is it then that unfair dismissal claims are still the most prevalent in the Employment Tribunal?
Statistic shows that in 2004/5 alone there were nearly 40,000 unfair dismissal claims filed. How can an employer avoid such claims?
The first problem starts with inactive management. Often an employee's poor performance or poor conduct is noticed early on in their employment but nothing is done. When appraisal time comes round the employee concerned will be given a 'satisfactory' rating. Managers can shy away from stating what they actually think for fear of upsetting the employee or worse triggering the wrath of human resources.
However, the key to a fair dismissal is to act early on. Accurate appraisals will identify problems that either may be remedied or they will alert the company to the need to act.
So, if a dismissal is required how is it to be carried out fairly?
There are a number of considerations to bear in mind here. First, to claim unfair dismissal an employee must ordinarily have one year of service. Therefore, leaving discrimination claims to one side, an employee with less than one year with the business will present less legal risk, which is another reason to act early on. Once one year of service has accrued the employer will need to tread far more carefully.
After one year of service it will not normally be fair to dismiss an employee unless they have already received formal warnings. In cases of gross misconduct, however, the employer can proceed straight to dismissal.
If an employer is contemplating dismissal they need to ensure that certain things are in place. First of all, do they have a good reason for dismissal? Only certain reasons are recognised as potentially fair reasons for dismissal. Misconduct, redundancy and incapability are the big three as far as the Employment Tribunal is concerned.
Second, since the EmploymentAct 2002, employers have had to follow the so-called 'statutory procedures' prior to implementing the dismissal. In essence this requires an employer to write to the employee explaining that dismissal is in prospect and why they are facing this situation.
The next stage is for a formal meeting to consider the situation. After the meeting the decision to dismiss will be communicated. Finally, the statutory procedures require an employer to allow the employee to appeal the decision to terminate employment.
Failure to follow the procedure can render the dismissal automatically unfair and result in a punitive uplift in damages of 50%.
The last consideration that employers need to have is to the broader question of 'fairness'. At tribunal the chair will consider the reason for dismissal and in the light of that reason they will ask whether the dismissal can be regarded as fair.
Here, they will consider various points: Has the ACAS Code been followed? Has the employer followed their own internal procedures? Have other staff in this business been treated in the same way? Taking this wider view the tribunal will decide if the dismissal is fair.
Although this article canters through the process to terminate employment, nonetheless, many employers miss out on these fundamental points. Given that the compensatory award for unfair dismissal can now reach £58,400 it is really worth taking time over the issue before acting.
Collins Stewart Guernsey
What does your role entail?
I am a director of the portfolio management division. I head the direct equity team in Guernsey, with responsibility for our European and US stock lists. I am also deputy chairman of our UK stock selection committee. This involves detailed stock analysis utilising Collins Stewart's proprietary stock evaluation system together with research from a range of external sources. My role also involves developing our investment management process to ensure our performance remains top quartile. In addition I am responsible for client services.
How long have you been in the position?
I have worked within the portfolio management division of Collins Stewart for over 12 years. I have managed private client portfolios for eight years and was appointed director five years ago.
What are your specific responsibilities?
Direct equity selection for private client and institutional portfolios. I am also a member of the asset allocation committee and I promote Collins Stewart's services to individuals and institutions.
What skills do you need to fulfil your role?
An ability to analyse companies, fund performance and economic data. Confident decision making, customer care skills and energy.
Why did you get into finance and is this where you anticipated you would be in terms of career?
A career in finance was, and still is, attractive as the industry provides an excellent way of testing and developing a range of skills, including decision making, analytical skills and people skills. Managing clients' portfolios is a good way to understand how businesses work, not just our own but those companies researched as potential investments for clients. Guernsey offers a developed and highly skilled offshore finance environment, an ideal location to develop a career in finance. Collins Stewart is an excellent company and has provided an environment where I am able to achieve my career goals.
What is your greatest ambition?
To achieve a well-balanced life.
What is your greatest fear?
It might sound odd but I am really not afraid of anything.
Who would you invite to a dinner party?
Alan Sugar, Jonathan Ross, Jeremy Clarkson, Nigella Lawson and Ann Robinson.
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