Peninsula Group, HR and Health & Safety Experts
(Last updated )
Peninsula Group, HR and Health & Safety Experts
(Last updated )
Let’s take a look at how to comply with the new laws on unfair dismissal, and how to manage a claim raised against your business.
Employers must demonstrate a fair and reasonable purpose for dismissing someone. This is nothing new within employment law. However, as Labour plans to amend dismissal laws, you must keep on top of these legislative changes.
Without proper compliance, you could end up causing unlawful dismissals – resulting in compensation penalties, reputational damages, and business disruption.
Let’s take a look at how to comply with the new laws on unfair dismissal, and how to manage a claim raised against your business.
In April 2024, the new Labour government introduced plans to update unfair dismissal laws under the Employment Rights Bill 2024. The bill outlines new responsibilities for employers to adhere to when it comes to dismissals:
Employers will need to review and update all employment contracts, particularly terms on dismissal. This applies to all staff members – from new hires to tenured employees.
One of the main contractual amendments you’ll need to make relates to probation periods and day-one protection from unfair dismissal for all employees.
As the law hasn’t been implemented yet, it’s important to be aware of upcoming legislative changes. That way, employers can avoid any risk of legal breach that falls within their business practices.
When the law is officially passed, employers must also make appropriate updates to their workplace procedures relating to dismissal.
The most vital areas include performance and disciplinary procedures. The new law could introduce statutory nine-month probation periods in the near future. However, employers can still exercise their rights to terminations where necessary.
This still includes following proper disciplinary measures; like warnings, meetings, and actions – before dismissing anyone. If the employee isn’t showing any signs of improvement, your dismissal may be perceived as reasonable and (most importantly) lawful.
Any policies related to dismissal should be amended to comply with the bill. This will help ensure the right steps will be followed when managing unsatisfactory employees.
Employers should know how to pass or fail new candidates lawfully. Your decision should be based on your performance policies, which should be accessible to all staff members.
Having transparent policies ensures employees are fully aware of why they passed or failed within their position.
The new legislation on dismissal will present a heavier hand on employers. That’s because the government is concentrating on keeping more people in their jobs, to help prosper the economic value of the country.
It can lead to hiring (and tolerating) employees who don’t meet your business expectations. To avoid this, employers should improve recruitment processes – from inductions to onboarding.
This also means having more rigorous and additional steps before candidates are hired. Through these methods, you’ll be content with bringing talented and valuable employees into the business.
Employers are well within their remit to dismiss a person who they believe isn’t compatible with their workplace.
This involves following the right procedures outlined under ACAS’s Code of Practice on Disciplinary and Grievance Procedures. For example:
Under UK law, compensation for unfair dismissal is left to employment tribunals to decide. If an employee’s appeal for unfair dismissal is successful, they could be rewarded either:
Basic awards for unfair dismissal are based on a person’s service years, age, and weekly pay. Unfair dismissal payment is calculated as the following:
From the 6th of April 2024, weekly pay is limited to a maximum of £700. (This doesn’t include overtime payments). So, for basic awards, the maximum compensation for unfair dismissal that an employee can receive is £21,000.
Compensatory awards for unfair dismissal are calculated following basic award calculations. The main areas covered are loss of wages, future wages, legal rights, and pension benefits.
Contractual benefits can also include; for example, company cars or health insurance. It can also include non-contractual benefits, too. Employees can also claim loss of bonuses or commission.
As of 2024, the maximum award for unfair dismissal is £115,115 or 52 weeks of gross salary – whichever amount is lower. This payment is in addition to the maximum basic award of £21,000.
All employers should acknowledge the upcoming legislation set to pass on dismissal. Without compliance, you could end up facing huge compensation payouts, reputational damages, and even business disruptions.
Peninsula offers expert advice on unfair dismissal. We also offer 24-hour HR advice – ensuring your business follows the right steps when terminating employment contracts.
Want to find out more? Contact us on 0800 028 2420 and book a free consultation with an HR consultant today.
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