Despite the implementation of new rules which mean that employees have to pay a fee when they issue proceedings in the Employment Tribunal, it is likely that there will continue to be a significant number of claims against companies following the dismissal of employees.

The threat, or indeed the reality, of an employment claim is a huge worry for any employer. Not only does each party normally bear its own costs in the Employment Tribunal, but the employer’s resources may also be depleted as staff will need to spend a great deal of time preparing for a hearing, dealing with settlement negotiations, and so on, which they would otherwise have spent doing the job which they are meant to do. This is particularly harmful to small companies, especially those which do not have an HR department.

Aside from the financial drain on a company (both in terms of legal fees, and the loss of valuable staff time), an employment claim can cause stress and lower staff morale. Attempts will be made by both parties to discredit the other side, and existing employees can find themselves subject to accusations which cause the company to doubt their loyalty or professionalism, even when such accusations are, in reality, unfounded.

One of the most common problems is that clients are either unaware of the correct procedures to be followed, or they have procedures and policies in place which are out of date. Tackling this issue, in a “prevent instead of cure” approach, will increase a company’s protection against employment claims.

Some of the key pieces of advice I would give to companies preparing to dismiss an employee are set out below, but my top tip which should be followed in all of the situations below is to keep a paper trail. Employment Tribunal claims are won not on what the company says, but by what it can prove: any discussions relating to grievances, disciplinary matters, redundancies and so forth should be minuted and signed by both parties, if possible; copies of all correspondence and minutes (and notes of any telephone conversations) should be kept on an employee’s personnel file; and company policies should be kept up-to-date and adhered to.


In times of economic downturn, companies often have to consider making redundancies. There are clear parameters in a “collective redundancy” situation (i.e. where a company plans to make 20 or more employees redundant at one establishment within 90 days or less). However, there is more flexibility where fewer than 20 employees are involved (known as “individual redundancy”) and, perhaps for this reason, many companies get the process wrong, which often results in proceedings being issued in the Tribunal.

The company must demonstrate either that an employee’s job no longer exists, or that the company no longer needs as many people to carry out the role which that particular employee performs. Unless one of these situations exist, the dismissal cannot be treated as a redundancy.

However, even if a company can prove that a genuine redundancy situation existed, an employee can still win a claim of unfair dismissal on the basis of a company’s failure to follow a fair procedure.
In the case of individual redundancies, the company will need to include the following general principles into its procedure:

  1. Consider whether redundancies can be avoided.
  2. Consult with employees at all stages of the process.
  3. Ensure that selection criteria have been decided following consultation with employees. The criteria should be objective, and subjective assessments should be avoided.
  4. Consider whether the employee could be placed in any other role within the company.
  5. Allow affected employees a reasonable amount of time off to seek alternative employment, attend job interviews, etc.
  6. As stated above, keep a paper trail.


Problems with an employee’s capability should not be handled under the Disciplinary Procedure. I would always advise clients to include a separate Capability Policy in their Staff Handbook.

Any doubts as to whether an employee has the skills required to perform their role will need to be dealt with under a Capability Policy, whereas an employee who wilfully misbehaves will face proceedings under a Disciplinary Policy.

When dealing with both capability and misconduct, care should be taken to ensure that the employee’s behaviour is not attributable to a disability which the employee has disclosed to the company (in which case the company should seek immediate legal advice to avoid a potential claim for discrimination).

When assessing capability, a company will need to firstly consider whether its requirements are in line with the employee’s contract and/or job description. The company should clarify exactly where it feels the employee is falling short, and it should allow the employee a reasonable opportunity to improve. It would be usual for the employee to be placed under review for a set period, during which time they would be subject to reviews.

Where misconduct is alleged, the company must carry out a reasonable investigation into the incident(s). The investigation should be approached with an open mind, and the employee should be given sufficient time and information to prepare for the disciplinary hearing. Sanctions will need to be consistent across the company (the only exception is in the case of a repeat offender who already has a current warning on their file).

As always, it is vitally important to keep a paper trail.


Dependent on the nature of the illness, a company may need to consider making reasonable adjustments to support the employee. This could include allowing the employee time off for medical appointments, allowing flexible working or reduced hours, or providing the employee with equipment which enables them to perform their role.

If an employee’s ill health / disability is affecting their ability to perform to such an extent that they are unable to carry out their job for a prolonged period, it may become impossible for the company to justify their continued employment. However, this is a problematic area, and a decision should never be taken without first having sought expert medical and legal advice.

And, once again, the company must be sure to keep a paper trail.

As stated above, companies can minimise the risk of employment claims by ensuring it has up-to-date procedures in place, and that it follows them. The cost of putting such procedures in place, or updating existing ones, will be significantly less than the cost (both financial and emotional) of defending a claim.

Monro Wright & Wasbrough LLP is happy to carry out a review and overhaul of your existing policies for a fixed fee. Enquiries should be addressed to Isobel Willoughby.

If you have any questions about any of the matters discussed in this note, or indeed any other employment-related matters, please contact a member of our Employment Team who will be more than happy to assist.

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Isobel Willoughby

Assistant Solicitor

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Steven Alais – Business Law Partner

Annabel Clark– Dispute Resolution Partner

Isobel Willoughby – Assistant Solicitor