Disputes at work and termination of employment

There will always be issues at work between employee and employer.  On the employee side, they usually relate to incidents between fellow employees; workload, bullying, poor man management or pay.  On the employer side, they usually relate to poor performance or misconduct.  This article looks at the main ways of dealing with these from an employee and from an employer point of view.
 
Employee Unhappiness
 
An employee who wants to resolve a dispute will require action.  Inaction is the option for an easy life in the short term and in the hope the problem will just go away somehow.  Taking action will usually start with an informal approach by the employee to the fellow employee or to a manager.  If that doesn’t resolve the problem, then what should you do?  Resigning with or without claiming constructive dismissal (which is resigning due to feeling there was no choice) is one option but an extreme remedy.  Less extreme but potentially quite stressful, is the grievance procedure.  By law, employers must set out a grievance procedure and share it in writing with all employees, e.g. in their statement of employment or the staff handbook.  It must include who the employee should contact about a grievance.
 
The Advisory, Conciliation and Arbitration Service (Acas) Code is intended to help employers and employees resolve grievances effectively in the workplace.  The Code sets out standards of fairness and reasonable behaviour that employers and employees are expected to follow in most situations when dealing with a dispute.  An employee should rely on this where the employer does not have a set procedure.  Employment tribunals have discretion to increase or reduce awards by up to 25% in certain cases if the employer or employee unreasonably fails to comply with the Code.
 
Many employees are unwilling to start a formal grievance procedure for fear of upsetting their employer and for fear of putting the relationship onto a footing that may ultimately lead to termination of employment.
 
Employer Unhappiness
 
Where an employer is unhappy with an employee, the range of options are, at one end, to take the time with the employee to try and resolve the problem on an informal basis and, at the other end, to terminate the employment.  In between there is the formal disciplinary procedure which may or may not lead to dismissal.
 
Most employers will have their own disciplinary rules in the staff handbook.  These may be followed provided that they comply with the general standards of fairness set by the Acas Code.  A staff handbook is not mandatory but is common for businesses employing five or more.
 
The Code is intended to help employers and employees deal effectively with issues of alleged misconduct or poor performance in the workplace.  When deciding whether an employee has been unfairly dismissed for misconduct or poor performance, an employment tribunal will consider whether the employer has followed a fair procedure.  The Code is not legally binding but does set out the fair procedure to be followed.
 
Termination of Employment
 
If an employer decides there is no alternative but to terminate the employment, it is essential this is done properly to avoid a claim.  Even if it is done properly, a claim can still be made by an employee.  The only way a claim can be prevented is by the parties entering into a “settlement agreement”.
 
In England and Wales there is no protection for an employee against termination until the employee has achieved two years of continuous service or unless the termination is the result of discrimination in which case there is no minimum service requirement.  There is also no requirement for an employer to give a reason for termination unless an employee has been employed for two years.  We would usually recommend that no reason is formally given so as to prevent an employee “hanging his hat” on the reason and trying to bring a claim or in order to cause nuisance.
 
Once an employee has achieved two years’ service, the employee has the protection of statute against being unfairly dismissed.  This requires the employer to terminate for a “fair” reason e.g. redundancy, and in addition the employer must act reasonably. 
 
If a settlement agreement is desirable, it will be necessary to offer the employee more than their contractual entitlement to make it worth their while giving up their right to bring a claim.  Any such discussions will need to be “without prejudice” till an agreement is signed.  The settlement agreement must be in a prescribed form and the employee will need to seek independent legal advice on the effect of the agreement.
 
If there is no settlement agreement and the employee wants to bring a claim for unfair dismissal, the employee has three months to bring a claim to the Tribunal.  But the employee must first notify Acas of their intention to make a claim.  Acas will try, free of charge, to conciliate the dispute.  It provides a certificate if the conciliation does not work and the time for bringing a claim is extended by the time spent in conciliation.
 
The employee needs the Acas certificate in order to start a claim before the Employment Tribunal.  The employee will also need to pay a fee to start the action.  The conciliation step and the fee requirement are the main reason why the number of claims brought before the Tribunal have dropped by roughly 75% in the past 12 months.
 
One final point to mention is that it is increasingly common for an employee to claim discrimination as part of a claim.  There is no financial limit on the amount of damages that can be awarded for termination caused by discrimination.  This is in contrast to the cap that exists on the amount that can be awarded for termination caused by unfair dismissal.
 
Tom Redfern is the senior partner in the firm of Redfern Legal LLP and has over 30 years’ experience.  Most of that experience has been acquired working in house as a generalist for large and medium sized companies based in the UK.  Having been on both sides of the fence, he feels he can better understand the issues facing clients when they require legal advice.  This can be particularly relevant for employee issues.  He speaks at UKTI organised events overseas and at events in the UK. 
Redfern Legal started in 2007 and is based in Covent Garden, London. 
 
Tom Redfern tredfern@redfernlegal.com 7 Henrietta Street, London WC2E 8PS