6 ISSUES FOR JUST £6 Subscribe to Business & Professional Life today CLICK HERE

Legal and financial news: You’re fired so sue me!

PUBLISHED: 11:49 22 June 2017 | UPDATED: 11:49 22 June 2017

Darren Sherborne

Darren Sherborne

Archant

Donald Trump and Alan Sugar are famous for it. In America, it’s just a fact of life, but business owners may have more power than they realise when it comes to ridding themselves of an unwanted employee. Darren Sherborne, an authority on Employment Law based in Cheltenham separates the fact from the fake news

“I hear an awful lot of misinformation and scaremongering when it comes to employment law. The fact is that some businesses have no contracts of employment and sack employees at will, without ever spending a day in tribunal. Others cross every ‘T’, dot every ‘I’, and still end up paying lots for tribunals or settlement sums. As an employment lawyer at Sherbornes, I am often baffled by this.

The hard fact is, in spite of political rhetoric from both sides of the Westminster fence, it’s surprisingly easy for an employer to rid themselves of an unwanted employee without picking up a large liability, and without having to get involved in protracted positioning as employees cry foul, get signed off with stress, and raise grievances as a form of counter attack.

It’s a hard business environment out there and when faced with the need for a possible dismissal, the first thing many business owners look at (or are advised to look at) is the legality of the dismissal. What some smarter employers ask first is what is the cost if they get it wrong, or just do it regardless of the law? The hard truth is that it is often cheaper, and considerably less time-consuming, to simply dismiss an employee and accept that it will be unfair. This is particularly true with senior employees (and it will always depend on the circumstances).

The reason for this is the way that compensation for unfair dismissal is calculated. Few realise that compensation for unfair dismissal is based on an employees’ “net” earnings, not gross. This already presents a saving when working out compensation of anything between 25 per cent and 40 per cent. The tribunal looks at the earnings actually lost by the employee and then award that net loss for the period of time that the employee is likely to remain unemployed. This is often between three and nine months, but can vary. Because unemployment is very low at present, likely periods of unemployment are also considered to be low and this keeps a lid on compensation.

The tribunal then deducts an amount according to the extent that an employee has contributed by his own actions to the dismissal. In the case of an employee who steals for example, this could be a 100% reduction. The tribunal will also reduce the award if they think an employee would have been dismissed anyway, if the employer had followed the right process. This is often a 100 per cent reduction and called a “Polkey reduction” which comes from an old and well-established case (Polkey v Dayton) which set out the legal idea that if an employee would have been sacked anyway, then they should not be awarded any compensation.

I am not advocating for one minute that employers simply disregard the law at will, but it has got to be good business sense to assess the risk before embarking on time consuming and expensive games of cat and mouse with employees (and let’s face it, that is often exactly what happens). I have certainly noticed a change in attitudes of employers when realisation dawns that it might be quicker and cheaper to simply sack an errant employee, than it is to start inviting them to meetings with protracted processes. For the sake of balance, I should say that it is almost always possible to dismiss for a genuine reason without paying compensation if the employer is happy to jump through the right hoops, but that’s another story.

Employers should remember that employment dismissals can be viewed as a see saw. On one side is money, on the other is time. As one side goes up, the other can go down. When evaluating a possibly difficult dismissal, the employer should decide which side he wants to reduce and which can be tolerated at a higher level and then handle the dismissal accordingly. The employer should always make sure that all of the circumstances of the case are understood.

To my mind, it seems the cards in respect of unfair dismissal are already stacked in favour of the employer, and good business (if not good employee relations) will often dictate that the cheapest phrase in some situations is ‘You’re fired, sue me’.”

0 comments

Welcome , please leave your message below.

Optional - JPG files only
Optional - MP3 files only
Optional - 3GP, AVI, MOV, MPG or WMV files
Comments

Please log in to leave a comment and share your views with other Cotswold Life visitors.

We enable people to post comments with the aim of encouraging open debate.

Only people who register and sign up to our terms and conditions can post comments. These terms and conditions explain our house rules and legal guidelines.

Comments are not edited by Cotswold Life staff prior to publication but may be automatically filtered.

If you have a complaint about a comment please contact us by clicking on the Report This Comment button next to the comment.

Not a member yet?

Register to create your own unique Cotswold Life account for free.

Signing up is free, quick and easy and offers you the chance to add comments, personalise the site with local information picked just for you, and more.

Sign up now

More from Cotswold Life

Yesterday, 15:25

Chipping Campden – once the meeting place for a council of Saxon kings – now offers the warmest of welcomes to all its visitors, from the humble shopper to the seasonal shin-kicker

Read more
Yesterday, 15:12

Property prices across Gloucestershire and the Cotswolds have risen steadily over the last few years, reflecting the trend across the country. But which area has shown the most dramatic hike in prices recently, and how does your postcode and house type compare with others in the area? You may be surprised to see the results...

Read more
Yesterday, 15:11

From mini Norway spruces to luxury Nordman firs, here are eight of the best places to get a luscious, green tree in the Cotswolds this festive season

Read more
Yesterday, 15:10

The weekend is fast approaching and for those still deciding how to spend their Friday through to Sunday, we pick 5 of the best ways to spend your weekend in the Cotswolds

Read more
Yesterday, 15:10

Choral carol services and grand instrumental performances, with the backdrop of some of the Cotswolds most picturesque locations, are perfect ways to embrace the festivities. We pick some of the best carol services and concerts to enjoy in the region

Read more
Yesterday, 14:39

Taking the classroom outdoors is fun, inspires fresh ideas, broadens horizons – and encourages a new generation to enjoy and care for the Cotswolds

Read more
Friday, November 16, 2018

“‘Flexitarians’ can do one though, being alleged vegetarians who still can’t resist the sizzling siren song of the bacon sandwich when no-one is looking.” Editor Mike Lowe is attempting to seek reconciliation with those he has annoyed… well, sort of.

Read more
Thursday, November 15, 2018

“This letting to Oxford nanoSystems is a fantastic example of how we are able to provide first class facilities for growing technology companies at Abingdon Business Park.”

Read more
Thursday, November 15, 2018

One of the UK’s leading training and education specialists has launched a skills hub in Nuneaton

Read more
Thursday, November 15, 2018

“The logistics hub is another example of where we have worked in partnership to support skills needs in the area and link our student body with future job opportunities.”

Read more
Thursday, November 15, 2018

“It was fantastic to see how this project is making a real difference to the lives of young people at risk of social exclusion.”

Read more
Thursday, November 15, 2018

It has become the 90th store to accept the gift card in Cheltenham

Read more
Thursday, November 15, 2018

As well as three days of action-packed racing and tradition, there’s plenty to do away from the course at this year’s November Meeting. Neil Phillips, The Wine Tipster, shares his 14 suggestions on how to make the most of your time at Cheltenham Racecourse

Read more
Wednesday, November 14, 2018

From festive light switch-ons and Santa’s Grottos, to Victorian Christmas Fayres and late-night shopping, we’ve covered what’s on in and around the Cotswolds this season

Read more

Newsletter Sign Up

Sign up to the following newsletters:

Sign up to receive our regular email newsletter

Our Privacy Policy

Topics of Interest

Food and Drink Directory A+ Education

Subscribe or buy a mag today

subscription ad

Local Business Directory

Property Search