There is a general perception among business owners, especially SMEs, that terminating the employment of a problematic employee – especially if that employee has a protected characteristic such as their race, sexual orientation, religious beliefs or a disability could cost them dearly.
Many SMEs simply decide to do nothing as employee dismissal is too high risk.
However, it doesn’t have to be that way. Being a smaller company on tighter budgets without an in-house lawyer or HR professional shouldn’t be a barrier to dealing with a situation that can negatively impact your whole workforce.
So, what’s the best way to handle an under-performing, problematic employee, while being entirely mindful of any potential legal challenges?
When length of service doesn’t matter
Consider the scenario – you have a member of staff off on long term sick or they are unreliable in terms of attendance – intermittently but persistently signing themselves off for short durations at a time. They have worked with you for less than two years – and so can’t claim unfair employee dismissal – and you want to dismiss them because you don’t have endless resources to cover the gaps they create. It seems pretty cut and dried, doesn’t it?
But could there be an underlying reason for the sickness absence? What if your employee has an underlying health issue, which means they suffer from a disability? If that is the case, they don’t need to have any length of service to bring a claim. Getting it wrong at this stage could lead to you having to pay unlimited compensation, especially if they can’t get another job to mitigate their losses.
The good news is there is something you can do about it, but the stakes are high and it’s important to take expert employment advice.
Discover the reason for absenteeism
First of all, you must find out what is really causing the absenteeism before taking any action. Hopefully there will have been return to work interviews with your employee where discussions have taken place and appropriate counselling, or warnings given.
Establishing the cause of absence and whether it’s related to a disability (especially if your employee suffers from long term sickness absence or intermittent periods of absence related to the same type or types of complaint) is vital.
Sometimes it is not obvious that the employee has a disability that is protected under the Equality Act. Your employee might suffer from a mental illness that they have not disclosed. They may say they are suffering from “stress” and that is often not taken seriously enough by some employers.
Follow policies and procedures
If you determine that the absenteeism is not related to a disability and if the employee has less than two years’ service, they can be dismissed on notice. Those with more than two years’ service and no protected characteristic still need to be put through a fair and reasonable disciplinary procedure and given appropriate warnings depending on the severity of the case. It is unlikely a dismissal will be fair without there having been a reasonable investigation and inquiry, an internal hearing under your relevant procedures and appropriate warnings given. If you don’t have a set of basic policies and procedures, you’re strongly advised to get them.
Take specialist advice
If there is a likelihood that the underlying cause for absenteeism is say disability or perhaps pregnancy related, the situation will require very careful handling. If an employer takes disciplinary action against employees with these characteristics, they can face not only claims for direct discrimination but also indirect or in the case of disability, disability related discrimination. Before taking any action, you are strongly advised to take specialist employment advice to guide you through the process in a legally compliant way.
Make reasonable adjustments
If the employee has a disability, you have a duty to consider reasonable adjustments to the workplace or working practices that might remove the barriers that are preventing the employee from giving regular attendance at work. The types of adjustments include making modifications to premises, allocating some of the employee’s work to another employee, transferring them to another role in the organisation, altering or adjusting working hours and providing time off for medical appointments.
You need only consider adjustments that are reasonable for the type and size of the organisation and that are likely to improve matters. If the adjustments are not likely to make any difference, then they do not have to be implemented.
Seek independent medical advice
Usually, you will be advised to take independent medical advice on whether there are any reasonable adjustments which can assist and, in the case of long-term absence, the prospects of the employee returning to work and giving regular and efficient service. Provided that you have followed a fair and reasonable procedure and have considered all possible and reasonably practicable steps to avoid the dismissal, if there is nothing that can reasonably be done to help the disabled employee, the law does allow you to terminate the employment on fair and non-discriminatory grounds. This is high-risk territory and requires expert advice (both medical and legal).
Does a written contract matter?
It’s a question that often gets asked. If you’ve hired someone and you’re paying them a salary, then the legal position is they are an employee – it’s just not evidenced in writing. If the employee were to sue for anything and the terms of the contract were not stated in writing, the employment tribunal would simply enquire of the parties what the actual arrangements were and base any awards on those. Employers must issue a basic statement of terms and conditions under section 1 of the Employment Rights Act but have the same right to dismiss and the same legal obligations to an employee without a written contract as they have for those with one.
The costs to a business – especially SMEs – of not addressing problematic employees can be substantial both in financial cost and reputation. The cost of taking advice is often less than you think. It is always worthwhile contacting an employment expert for a preliminary discussion. Many employment specialists are happy to spend 20 minutes on the phone, advising whether you need to engage some assistance with the problem, but there is no reason to feel trapped in a situation that can be dealt with.
Sue Morrison is managing director at By Design Group
How to avoid unfair dismissal claims