06/10/2014

By Gudrun Limbrick, an author for Croner-i Human Resources by Wolters Kluwer,

Employing staff is something of a lottery. People who perform well in interviews, shine in aptitude testing, stand out in psychometric tests, and even rock the role plays, may be awful once their feet are under the desk. Good workers can also become ineffective, over time, as they, their situation or the work environment changes.

An underperforming staff member is not simply a single loss of efficiency. A single inefficient team member can affect the success of the entire team. Presumably, in recognition of the problems a rogue staff member can cause a company, Grant Shapps, the Conservative Party Chairman, famously said that he felt it was too hard to sack underperforming staff members and that he wants changes to the law to help businesses to be able “to say ‘thank you very much, it has not worked out. Here is a decent package to move on from this role’”. We may yet see changes in this direction.

However, is he right? Are we really struggling against a tide of people who cannot do their jobs and yet refuse to be shifted?

The first thing to say is that the ability of employers to rectify poor recruitment decisions or lose failing staff members has increased significantly. For those employees taken on after 6 April 2012, they now have to be in post for two years before they can take a complaint of unfair dismissal to an employment tribunal. Anyone employed before this date, the qualifying time remains one year. Two years is actually a very long time to be in a job if an employee perceives that he or she could be dismissed with undue cause at any time.

Acas is very clear on dismissal, stating that “dismissing employees should be the last resort”. However, the clarity arguably ends there. What is an appropriate or inappropriate dismissal is based solely on the principle of “fairness”. An employer has to demonstrate acting “reasonably” in a dismissal process. However, there is some invaluable guidance in this matter, for both parties.

A dismissal is judged to be automatically “unfair” if it is based on pregnancy/maternity/paternity issues, including taking time off for dependents, trade union membership or acting as an employee representative, issues relating to part-time or fixed-term employees, or issues relating to pay and working hours. Under the terms of the Equality Act 2010, it is also illegal to discriminate on the basis of certain protected characteristics – age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation.

A fair dismissal is one in which the employer acted reasonably and had a reason related to the employee’s conduct, qualifications, capability or some other substantial reasons including redundancy. The key word in the context of this discussion is “capability”.

To satisfy an employment tribunal of the reasonableness of such a move, the employer would need to be able to evidence the underperformance (e.g. complaints from customers), to show that this was explained to the individual concerned, and to demonstrate that some time and support, and perhaps training, was given (or at least offered) to enable the individual to improve. Not only is this a reasonable course of action, but in most cases, if the individual can improve, it is a cheaper option than recruiting another person.

It is also important to put this into the context of the minimum qualifying period – an employee appointed before April 2012 will already have been in post for a year before any of this comes into play – arguably adequate time to have detected underperformance problems. For an individual appointed after this time, he or she will have been in post for two years, plenty of time to assess whether he or she is, for example, appropriately qualified. It is not easy to imagine how it could be made “easier” for an employer to sack an individual for underperforming if that employee is to be treated fairly.

What is clear from employment tribunal evidence is that dismissal of long-term staff cannot be used as a substitute for ineffective ongoing appraisal and assessment. Nor can it be a means of making savings on the staff training and development budget. The law allows for genuinely underperforming staff to be dismissed after due process. It does not allow for employers to take short cuts in this and to throw away their contractual obligations.