Each year in the UK, there are approximately 50,000 unfair dismissal cases - the equivalent of just under 1,000 per week - that end up being taken to an employment tribunal.
That’s a headline measure of just how big an issue this is for the UK economy. Unfair dismissal has been the largest single matter for the tribunals system to deal with for a number of years now. Approximately half of such claims are settled before they even go through the system via some form of payment or conciliation-type of process. The prevailing view is that the claimant--that is the employee--has a pretty fair chance of winning, whether at the tribunal itself or through settling out of court. Indeed, over the years, more and more dismissed employees have opted to go down the tribunal route because of the likelihood of winning against their employer. But why are so many people falling into this unfair dismissal category in the first place? Unfair dismissals come about after an organisation decides to get rid of one of its people and does so in such a way that is deemed to be unfair and unreasonable by the individual and in the eyes of the law. The situation generally boils down to the fact that the employer-employee relationship has gone wrong. Nip it in the bud For whatever reason, the worker is seen as a ‘bad apple’. Maybe they always were and the recruitment process and/or line manager failed to pick it up during their probationary period. Or maybe the individual did not change but experienced a ‘personality clash’ with a new boss. This situation would appear to suggest that organisations must employ rigour during the hiring process, whether employing personnel on a full- or part-time basis or on either a fixed or permanent contract. It is usually easy to determine whether a candidate can do the job. It is generally less easy to see if they will fit into the corporate culture. But the easiest way for HR directors to avoid trouble further down the road in this regard is to ensure that both they and line managers nip any potential issues in the bud at an early stage - as soon as they start to see signs that someone is not working out. In future, the coalition Government hopes to cut the number of employment tribunal claims by extending the qualifying period for unfair dismissal claims from one to two years. This means that workers will need to have been with their employer for more than 24 months to take action against them. But let’s say that a given problem has been going on for a while. One of the biggest issues for employers when embarking on a disciplinary process in this scenario is a common failure on the part of line managers to engage properly with that process. High cost of failure As a result, they can end up saying or doing something they shouldn’t in the heat of the moment due to lack of training and/or full understanding of the situation. But this scenario can result in an employee coming to the conclusion that their best recourse is to seek medical assistance due to stress or insomnia or whatever other symptoms have been generated by the situation. The problem is that, before you know it, the individual is off on sick leave, which can last for some considerable length of time and takes real effort to untangle. But this failure to follow due process also generates other challenges. On the one hand, it is a big no-no for employment tribunals, which are likely to deem that employers have acted unfairly on that basis. On the other, the financial cost of having failed to manage the situation adequately is high, not just in terms of lawyers’ fees or the amount of time spent attending tribunal hearings. Instead the real cost lies in the amount of time required to manage these situations along with the lost productivity of both individual workers and their teams/units. In the 21st century, the costs associated with time cannot be underestimated – a fact that means every worker these days is key to the organisation. But the company’s reputation also does not benefit from such activity, which has its own cost. So what can HR directors do to avoid this situation in the first place?
- Step in early: particularly in the case of new recruits, deal with them swiftly - ideally during the probationary period - if it looks like they could become difficult to manage downstream and extend the probation period if necessary.
- If after two years, issues start to arise, take action as quickly as possible: use mediation techniques to try and identify any problems, promote discussion and reduce the gulf between the parties concerned.
- Undertake performance management: such processes should be used more frequently than normal if employees are having difficulties with their boss - regular conversations with both HR and line managers are vital to prevent issues from festering and getting worse.
The secret to success here is keeping performance management processes simple and discussions open. Doing so should go a long way to preventing dissatisfaction ending up in an unfair dismissal claim, thereby saving the business a huge amount of time and effort in the process.
Simon North is founder of career consultancy, Position Ignition.