How to Handle Misconduct Dismissals In Your Business


The law on unfair dismissal specifies that misconduct is a po­tentially fair reason for dismissal, but gives little or no guidance on the sort of behavior that may warrant dismissal or on the procedure that employers should follow beforehand. The Advisory, Conciliation and Arbitration Service (ACAS), how­ever, has issued a Code of Practice on disciplinary practice and Procedures giving useful guidelines on such matters, and this can be readily adapted to suit small businesses. This code, together with case law that has emerged from industrial tribunals and their appeal courts over the last 10 years, provides a good Yardstick as to the fairness of misconduct dismissals.

The main points are that employees should not be dismissed for a first offence, except in rare circumstances when the mis-conduct is treated as gross misconduct; that they should have the chance to give their side of the story before any action is ^en against them; and that they should be given the opportunity to improve before being dismissed. These are all the rules of natural justice, particularly since an employee cannot claim that he has been unfairly dismissed until he had been employed for at least a year (two years in companies with fewer than 20 employees).

Misconduct Dismissals

When a disciplinary matter arises, the initial step should be to investigate the facts promptly, before memories fade and stories get distorted. In some circumstances it may be necessary to get the employee off the premises while the investigation takes place. In such a case, the employee should be suspended on full pay, for a day or two. To suspend without pay would strongly suggest that the issue had been prejudged and the em­ployee deemed to be guilty, and could result in him leaving and claiming that he had been constructively (unfairly) dismissed.

Unfair dismissal law demands a quite different standard of proof from that which is necessary in criminal cases. It is not necessary to prove that an employee has committed an act of misconduct: the employer only has to show that he had good reason to believe (not just to suspect) that the employee had ‘done the deed’, and that it was reasonable for him to hold that belief. In order to satisfy that test, therefore, there has to be investi­gation; without it, the unfair dismissal claim is sure to succeed. Once the investigation is complete, the employee should, in the presence of a witness if he wishes, be told the allegations against him and allowed to put his story before disciplinary action is decided upon.

Many disciplinary matters are fairly minor and can most sen­sibly be dealt with by an informal warning: ‘pull your socks up’ or ‘start getting up on time in the morning or else’. In more serious cases, or when minor offences are persistently com­mitted, and more formal action is necessary.

1. In the case of minor offences the employee should be given a formal oral warning or, if the issue is more serious, there should be a written warning setting out the nature of the offence and the likely consequences of further offences. In either case the employee should be advised that the warning constitutes the first formal stage of the procedure.

2. The final step might be disciplinary transfer or suspension without pay (but only if these are allowed for by the contract of employment) or dismissal, depending on the nature of the misconduct.

The code goes on to recommend that in all but minor cases, where only an oral warning is given, details of the disciplinary action should be given to the employee and he should be ad­vised if he has the right of appeal. The code does say that employees should always have the right to appeal to a manager at one level above the person who took the disciplinary action against him but, in small businesses, this is not usually feasible. Instead the employer has three options: the right of appeal would be dispensed with; the appeal could be made to the person who took the disciplinary action, or an independent arbitrator could hear the appeal (ACAS keeps a list of people who can be called on for this purpose). The latter course, though, does mean that the outcome of the appeal is outside the company’s control, and should be used with caution.

It is up to the employer to define what sort of behaviour will justify taking disciplinary action. All the law requires is that companies do not impose rules which are unreasonable in their particular circumstances. So, for instance, it is quite reasonable to insist on a reasonable standard of dress for employees who come into contact with customers, or to prohibit smoking in a company manufacturing flammable goods. It is, though, essen­tial that employees should know of any rules that apply to them and it makes sense to put them in writing. Their prime purpose is, after all, to ensure that the company can operate effectively: keeping on the right side of the unfair dismissal laws is not the only consideration.

Finally, it also makes sense to keep records of disciplinary action taken, the reason for it and any further developments. These records, which obviously must be kept in confidence, are essential in defending subsequent unfair dismissal claims, and are also very useful in ensuring that employees are treated consistently and that a decision to dismiss an employee is made on a rational basis.

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About the Author: Marie Mayle is a contributor to the MegaHowTo team, writer, and entrepreneur based in California USA. She holds a degree in Business Administration. She loves to write about business and finance issues and how to tackle them.

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