Dismissal rules ‘a nightmare’

Sacking employees is to become virtually impossible under controversial new dismissal rules that take effect next month.

Employers will have to complete a complex 13-step procedure before they can dismiss a worker. The legislation – the first statutory dismissal procedure to be introduced in the UK – requires an employer to first hold several meetings with employees, provide them formal written statements and follow a strict timetable before they can be legally sacked.

Lawyers say the rules are so onerous that employers will be forced to avoid trying to sack staff. Steven Lorber, employment partner at Lewis Silkin, the law firm, said: “This is potentially a complete nightmare for employers.

“The employee will know that if they can find any fault with the way the employer has followed the procedure, they will be home and dry.”

David Bishop, at the Federation of Small Businesses, said: “We think this will have the biggest impact of any employment legislation introduced in the last ten years. By their very nature these rules will make it much harder for employers to dismiss staff.”

Employers who do not satisfy each step in the procedure will immediately be judged to have acted unfairly. In such cases, employers can be forced by an employment tribunal to pay up to £50,000 compensation in addition to an award.

Mr Lorber said employers could lose unfair dismissal claims for minor defaults, such as for not providing sufficient detail for dismissal, or not giving an employee a reasonable opportunity to consider their response.

The Department of Trade and Industry (DTI), which is introducing the rules, believes the new procedure will encourage parties to resolve their disputes in the work-place, cutting tribunal cases by up to one-third.

But lawyers and business groups believe that the 13-step procedure will instead spark hundreds more claims.

Companies will be exempt from the rules when large numbers of staff are sacked or when the business closes unexpectedly.

Business groups believe many employers are unaware that the new rules will take effect from October.

The 13-step procedure

1. Set down in writing arguments for dismissal

2. Hand copy of statement to employee

3. Hand document over long enough in advance for employee to consider response

4. Hold a meeting with employee

5. Conduct meeting in a way that enables employee to explain their position

6. After the meeting tell employee decision

7. Offer employee chance to appeal

8. Invite employee to further meeting to discuss appeal

9. Employer must invite senior manager to the appeal meeting

10. Communicate final decision to employee

11. Timing of all meetings must be reasonable

12. Location of meetings must be reasonable

13. The employer must not delay unreasonably over any of these steps

“The Times”: September 2004