Jo Eccles, who confirmed that disciplinary and dismissal issues were among the most frequent enquiries that the business support service received, urged smaller business owners to carefully assess their procedures before taking action.
Employers, she said, must tell all new recruits within two months about disciplinary procedures and consult the ACAS code of practice if in doubt about how to handle certain situations.
By not following the rules or seeking specialist legal advice, business owners could face a hefty fine, with Ms Eccles warning that the average tribunal award for unfair dismissal in the 2012/2013 tax year was £10,127.
She said: “As an employer, it is your job to ensure that you set and uphold standards of work and behaviour that are good for your business and the other members of your team, but it is also essential that you follow the correct procedures for what can be a very difficult issue to tackle.
“Dealing with potential disciplinary issues in a timely and effective manner can often nip bad behaviour in the bud and reassure other members of staff before things become a major issue.”
In terms of disciplinary issues, Ms Eccles said employers must list all procedures in the staff handbook and ensure that different processes are followed depending on the severity of an employee’s actions.
She also reminded unsure small business owners to follow the procedures set out in the ACAS code of practice, such as the rule that each employee has the right to be accompanied by a colleague or a trade union representative during disciplinary meetings.
She added: “In the case of disciplinary procedures, should it develop to a tribunal situation, evidence that these have been followed will be required, and if you fail to follow these a tribunal could increase any resulting compensation to an employee by up to 25 per cent.”
If an employee’s conduct has not improved after the disciplinary phase, the next step is dismissal, which Ms Eccles warned was also a sensitive area to be treated with care.
She said at this stage staff with less than 24 months service can often be dismissed without following the full disciplinary process, and that employees are entitled to notice unless it is a very extreme case.
Moreover, she advised that businesses needing to make staff cuts could consider the redundancy option, but that this should not result in the last to be employed being the first to go, and again required following the correct legal framework.
Adviser comment:
Gordon Hay, managing director at Birmingham-based Redbourne Wealth Management, said: “We decided to outsource our HR support to our accountants that provide this service for a number of their clients. While it is still my responsibility as managing director to address any issues, we rely on our accountants for HR guidance on employee and performance processes, which is where I think the real issue is. If we do not follow the precise process, then we leave ourselves wide open to future claims.”
