Probation

Probationary periods have virtually no legal basis whatsoever, other than in contract law. They are widely used, however, and give an employer a fig leaf to hide behind when they are terminating someone’s employment during or at the end of their probationary period. An obvious advantage of using a probationary period clause is that the length of notice during that time can be reduced. If you typically have employees on one month’s notice then you may wish to have a probationary term of only one week’s notice. Senior management may usually be on three months notice but during the first six months of probationary service it could be reduced to one month. It should make it cheaper, quicker and less painful for the employer to part company if it does not work out.

But beware, you may just run into problems if the period is not properly monitored or acknowledged, or simply not formally signed off and finished. We recommend reviewing new employee’s progress on a monthly basis with them.

If they are struggling then you can intervene quickly and sort things out to everyone’s satisfaction by giving guidance and support. As ever, it is always a good idea to record brief notes about these reviews and if there are on-going concerns make sure the employee is given a copy of the notes so they fully understand what they need to do to improve.

If the worst happens, and they are not working out as expected, you may decide to end the relationship sooner rather than later. If you have been reviewing regularly the result should not come as a surprise. They are much less likely to get emotional or look for some ulterior motive to explain your decision to terminate the contract.

There is another aspect to probationary periods which is often overlooked. If you get his with a claim for discrimination or something other than poor performance, proper monitoring and records will probably reduce legal exposure.

If probation periods are managed well then this is a powerful proposition. Sadly many people do not formally review as they go along, forget about the end of it and then try to catch up or just assume that the employee will know they are ‘permanent’ because they only really invoke the probationary clause when they want to get rid of someone. If you are not going to do it properly it is best not to do it at all – there is at least one court case where an employee won a breach of contract claim because the contractual provision implied they were going to do it properly but did not!

If you do decide to retain probationary periods then make sure that you write in a probationary period of ‘up to’ x months or make very clear provision for termination during the period to avoid a claim that the probationary period of X months is actually a fixed term contract for that time and cannot be broken without compensation for the remainder if terminated earlier.

Finally probationary periods can be extended but you would need to write to the employee prior to the probationary period ending confirming that this is the employer’s intent and the reasons for it. Again using the term ‘up to’ a further 3 months is advisable.

Remember:

* Probationary periods have little legal weight

* They can allow shorter notice periods for the early days

* Monitor it properly, do not leave it until the last day

* Intervene early if there are problems and give support

* Proper record keeping will protect against other claims

* Periods can be extended, but you must confirm this in writing before the period has ended

* Write the provision carefully to ensure it cannot be read as a guaranteed period of probation”.”””

Discipline

Probably the most contentious issue relating to new employees is the extent to which they are to be given the ‘benefit’ of the full disciplinary procedure.

We advise our clients to retain the flexibility to follow the spirit if not the letter of the disciplinary procedure during the first year of employment. This is to avoid getting bogged down in lengthy procedures when employers have the right to dismiss without any risk of an unfair dismissal claim. If the contract allows this flexibility then the risk of a breach of contract claim is substantially reduced. Dismissal

The statutory requirement was a 3 step process; invite to a meeting giving reasons, hold a meeting to consider and give the right to appeal. Many employers believe that since the repeal of the widely hated Regulations and the replacement by a simplified ACAS Code of Practice, there is no need to bother during the first year of employment. We strongly disagree and advise our clients to follow the ACAS Code in respect of Dismissals for all employees including those with less than a year’s service. Why?

The first reason – if you have not followed the ACAS Code and the employee succeeds in making a claim of discrimination or other prescribed reason for dismissal then the award would be increased by up to 25%. The risk of a discrimination claim may appear remote, but it is amazing how creative people can be when advised that they cannot bring an unfair dismissal claim because they have less than one year’s service.

People may try to argue that the real reason for their dismissal is due to issues of discrimination, having raised a health & safety concern or in some way they attempted to assert their statutory rights. This allows them to submit a claim as the one year service rule does not apply in these situations.

The second reason – the issue of fairness and natural justice. You may not want to admit it, but it is possible that holding a meeting/appeal may bring out a good explanation for their performance/conduct and lead to a fairer result. And don’t forget, if something like discrimination is being alleged, then it is better to deal with it or at least understand it at an early stage rather than through the Tribunal process.

One word of warning – do not prejudge the outcome of a meeting. Not only is it unfair, it is dangerous if it can be shown to a Tribunal that the process was a sham. Go in with a genuinely open mind and present to the employee your concerns and allow them the opportunity to address what you have had to say.

Once matters have been exhausted, adjourn the meeting to reflect on what was said. If with hindsight what they had to say was fair, perhaps they had not been given sufficient training and support, then you may decide to extend the probationary period or advise them that they have one or two months to improve. If you are not convinced then inform them of that fact and terminate their employment.

Remember you should always confirm your decision in writing and offer them the right of appeal (see below).

Grievances and Accompaniment

Employees can raise grievances at any time and this right cannot be restricted to employees over one year’s service. It is important to deal with all grievances by following your procedure, and this will include the right of appeal against the decision to dismiss someone with less that a year’s service.

The right to be accompanied is not dependent on service, so make sure that employees are aware that they may be accompanied at a grievance or disciplinary meeting. This can either be a colleague or accredited Trade Unions official, and it is a free standing right.

Remember:

* You should allow all employees some access to your Disciplinary procedures, Dismissal should not be the only option in the first 12 months

* Contracts should specifically allow early termination to protect you

* There is no protection from proven discrimination on any grounds

* If you follow the right procedure and keep performance records, spurious claims are less likely later

* Everyone should have the right of appeal

* Everyone must be allowed to be accompanied

* Hearings should be fair and not pre-judged

* Confirm decisions in writing after (not before) the event.

Close to the edge

3 days before the end of the year and you decide to dismiss. Our nightmare, but I have to say, your problem. Why have you left it so late?

The bad news is that a year is at best 51 weeks in unfair dismissal terms! You have to leave some time for the formalities to take place, and that will automatically take the last minute dismissal over into 12 months and you will have to justify a whole host of reasons for the dismissal. And you will have really upset and emotional employee on your hands, and they are always the most likely to litigate.

There is only one thing worse than getting a call about dismissing someone at 53 weeks because the client forgot or miscalculated, and that is a call asking if it is okay to dismiss in the final few days of the year.

If an employee is dismissed in the 11th month then employers have to be very careful to ensure that nothing they do could be construed as giving sufficient service to achieve 12 months service. With more senior people on say 3 months notice then care need to be exercised after 9 months.

As ever, the way to avoid much of this worry is to have robust system for monitoring performance and not letting sub-standard employee get to anywhere near the 12 month mark. Take robust and firm action early and you will not get into difficulties. A formal review at 9 months should address most issues. If people are not really much good at 9 months then it is unlikely that any extra time will help.

To make absolutely sure that such an employee does not come close to the year’s service, if you decide to terminate after 9 months then it would be best to do so with immediate effect and give them pay in lieu of notice.

Remember:

* A year is at best 51 weeks

* If employees have long notice periods it may be much shorter

* Monitor continuously and act early when you know things are not right

* People get even more upset if you leave things to the last possible moment and litigation is more likely, and may be more difficult to defend.

* Keep records

Conclusion

Part of good HR is recruiting successfully – you can really improve your recruiting success by making sure the initial stages of your new starters careers goes well, is properly monitored and their concerns and insecurities addressed as soon as possible. And make you get the right documentation to them at the right time.

Where things are not working out, then try and intervene to put everyone back on the right path, but if you have to part company then do it early and properly. And above all, record it all in their personnel file – it really does count when things go horribly wrong.

Many groups of businesses are having to make cuts to adapt to the new credit crunch” realities. A recent decision against JJB Sports emphasises the need to take good advice and be very careful when making redundancies.””” The company tried unsuccessfully to claim that each of its stores was a separate workplace. As a result it argued that it did not need to give 90 days notice of redundancies, a claim the tribunal rejected.

UK law imposes much greater restrictions and longer time scales on companies that wish to make large scale redundancies, specifically 20 and 100 redundancies are the break points.

Every case needs to be considered carefully, but groups like JJB with centralised controls and very tight reporting structures are more likely to be viewed as one establishment for this purpose, than companies who operate their subsidiaries very independently. Independent accounting and real local decision making are key, but not conclusive, indicators.

If this was not bad enough, tribunals are beginning to view a redundancy programme as being much wider than job losses. Where employees have their job restructured, are transferred or even have their salary altered, they can be counted as part of the 20 or 100 affected by ‘the redundancy’. Tribunals are trying to make sure employers do not duck their responsibilities.

In case companies believe it is irrelevant, the cost of getting it wrong can be costly in terms of time and money. All this when companies are trying to survive. In JJB’s case, they have had to pay at least 65 days of salary to more than 100 employees who lost their jobs – quite a bill not budgeted for.

Key points

  • Each site may not be considered a separate work place establishment
  • If you are making 20 or more redundancies 30 days notice is required
  • If you are making over 100 redundancies 90 days notice is required
  • Redundancies may not necessarily mean job losses
  • Take legal advice before any redundancy or restructuring programme to be sure

Suspending someone, even on full pay, is an emotive and serious step that most employers do not do lightly. And many are unsure if they are even allowed to do it. So when can you suspend someone? Providing there is a suitable reason and the employee suffers no detriment – they continue to receive full pay and other benefits as normal – then most employers will have the right to suspend. For many this right is set out in their handbook, but ACAS’s Code of Practice also allows for suspension, which means that the courts are likely to view it as reasonable behaviour.

ACAS used to say that this was to allow further investigation of the matter. They no longer limit it, as there are many reasons for suspending employees today, for example:

  • To stop any recurrence, especially where gross misconduct that could lead to dismissal is suspected. Suspension underlines the seriousness of the situation and the potential breakdown in trust.
  • To allow proper investigation – it stops the ‘offender’ interfering, and can allow other employees to come forward when they can see you are taking it seriously.
  • Cooling off can be crucial – the employee may well react better and management more rationally, after taking a while to calm down. This will stop procedural mistakes being made.
  • In high profile roles, it might be best to get them away from the public eye, for their sake and for the employer’s.
  • Finally it gets the employee focussed on the fact they could lose their job. They will now treat it seriously and they will properly review their own situation.

And you will have to balance suspending early or waiting until the case looks stronger. There are no absolute guidelines, but the seriousness of the alleged offence and the ability to investigate quickly and effectively will be the key. An early investigation may help as just asking for an explanation can resolve it or may focus the investigation and make the suspension shorter.
For most employers suspension carries only slight risks, but if you can, take advice. Do it badly or inappropriately and you could just be caught by a constructive dismissal, discrimination or a stress claim, especially if you allow it to drag on unreasonably.

Finally, how do you do it? You should announce a suspension firmly, clearly and in person. Explain what you are doing, why and how long it should last. In a unionised environment you may wish to allow accompaniment but there is no legal requirement. Follow this up immediately with a letter of confirmation as sometimes people think they have already been dismissed (or pretend that they have).

Suspension is not a step to be undertaken lightly but neither must it be shied away from. And remember, it is a step in the disciplinary procedure, not a punishment in its own right and does not imply ‘guilt’ or that disciplinary action will follow.

Key issues:

Before you suspend, consider a number of factors:

  • Are there sufficient reasonable grounds?
  • The implications for the employee.
  • The potential threat to the business or other employees?
  • Will it allow a proper investigation of the allegations?
  • How long should it last?
  • Make sure your procedure allows for it
  • Think carefully about when to do it
  • Do it properly and get it in writing

Garden Leave is a term banded around with nonchalance. Most people assume that employers can automatically continue to pay you, but keep you at home, preventing you from working for the competition. Without an express written term in the contract, it is not quite that simple. Although a recent judgement has held that in some very limited circumstances it may now be possible, it is best practice to have such a clause within the contract, and you should make sure that it prevents working for anyone else during that ‘leave’.

Typically garden leave is written into the clauses that deal with termination of employment and usually only for senior staff. We would advise that you take such wording away from the period of notice to allow for its imposition in circumstances other than resignation and dismissal.

It is probably wise not to specify on which other occasions it may be used, but such circumstances might include:

  • It is discovered that a manager is talking to the competition but has not resigned. There is no misconduct but you want them out of the way for a while.
  • An employee has been off long-term sick. They want to return to work, but you are not convinced it is safe to do so and you wish to obtain an independent medical opinion.
  • A company is consulting with staff in critical and commercially sensitive areas about redundancy. They wish to do so without having any of them in work.Garden Leave is not quite the same as Suspension with Pay, as that is rightly associated with suspected wrongdoing and tends to be quite emotive. But beware, putting someone on garden leave is never easy – just because you have contractual authority to do so, it is not a step to be undertaken lightly.

    A final note – full salary and benefits must be paid throughout the period of garden leave. Failure to do so will amount to breach of contract by the employer so that both the garden leave obligation and any restrictive covenants will be unenforceable.

    Key points;

    • Include well drafted garden leave clauses in contracts
    • Do not limit yourself to just termination/dismissal
    • Specifically prevent working for anyone else
    • Decide when it is appropriate to put someone on garden leave
    • Treat them properly so there is no breach of contract

In almost any system of law the right of appeal is fundamental. UK employers will find themselves having to conduct appeals in a variety of circumstances – to stay safe you need to carry these out impartially. Appeals might arise after disciplinary action or a dismissal, through redundancy selection, on the grounds of ill health, or through retirement. Or they can follow a grievance outcome that the employee is not happy about. Whatever the reason, the basic principles are the same.

Whoever presides over the appeal has to be impartial, so they must not have been directly involved in the original decision. They have some work to do before the hearing – they need to read and study the employee’s written appeal and any written documentation to support the case. Talk to line management about the grounds for their decision and ask whether it was objectively justified, was the process professionally conducted?

Write to the employee to confirm the date, time and place of the appeal hearing. Inform them of their right to be accompanied. You should establish that the employee is fully prepared and ask what else they require. Have available the person(s) who made the original decision in case you need them.

Any appeal should decide whether, considering all the circumstances, a decision was within the range of reasonable responses that a reasonable employer could make. So at the appeal allow the employee, and their companion, every opportunity to put forward their concerns and ask questions to clarify what has happened. Was the decision and the procedure fair? Was all available evidence considered at the time or has new evidence since come to light that means it needs to be reviewed? Were any mitigating circumstances taken into account?

If you stand by the original decision then the appeal has been unsuccessful. But if the decision was unfair or procedurally flawed, decide what action to take – that might include reinstating the employee if they had been dismissed.

Inform the employee (and their representative) of your decision and the reasons, confirm in writing and enclose a copy of minutes taken. Finally place these documents in the employee’s personnel file as appropriate.

Remember an appeal is an essential process. It could right a wrong, or justify an unpopular but reasonable decision. Above all, it is not just a rubber stamp for another manager’s possibly bad decision.

Appeal Essentials

  • It must be presided over by someone impartial
  • Confirm the time and place in writing
  • Allow the employee to be accompanied
  • Listen carefully to the employee’s complaint
  • Consider all the evidence
  • Take minutes of the meeting
  • Was the decision reasonable?
  • Was the procedure fair?
  • Inform the employee of your decision and reasons
  • Confirm these in writing
  • Put a copy on file.

When you need to cut costs most people think slashing headcount is the easy option. Don’t be fooled. Nowadays redundancies must be fair, which requires real planning, setting proper objective selection criteria, genuine consultation and sticking to a proper dismissal procedure. Get any of these wrong and you could be vulnerable – remember in a downturn employees are more willing to fight for their jobs or for financial compensation.

So if you want to cut heads the first thing you need to prove is that there is a redundancy situation – in legal terms that there are job roles that either have ceased or diminished, or are about to. And then you need to stick to a fair, objective and well organised process, offering alternatives where appropriate and genuinely considering suggestions from employees, especially those most affected.

Your first task is to plan a realistic timetable. Before you start in earnest though, ask for volunteers as this is a way of possibly reducing the need for compulsory redundancies. Remember, you do not have to accept a volunteer if their skills and experience are too valuable to lose.

A fair procedure is all about consultation. Having selected which jobs are at risk, build in a minimum of two weeks so that you can consult employees in a series of one-to-one meetings, to explore reasons for their selection and consider alternatives. This involves listening to their ideas and properly responding to what they have to say. Failure to allow enough time can lead to claims that the consultation was not genuine. You cannot confirm redundancy until the end of the consultation period.
Key points to remember:
1. Plan a detailed time table
2. Allow enough time
3. Consider volunteers first
4. Use objective selection criteria
5. Don’t discriminate
6. Consult employees genuinely
7. Consider suitable alternative job roles
8. Adhere to dismissal and appeal procedures

 

If you do not get enough volunteers, you may need to select staff from a pool of workers. You must do this objectively, using selection criteria that can be justified.

The law recognises that you will want to end up with the strongest workforce, so this is best done by using a variety of selection criteria, or a matrix, based primarily on relevant skills and competencies. Avoid using opinion too much – being a “good team player” and “popular with customers” is just too subjective to stand up. But if you have factual data that measures individual job performance use it.

One final point on selection criteria, do not discriminate by making it harder for a particular employee to score highly. So you can use poor attendance as a criterion, but you must exclude genuine long term ill health or maternity-related absence.

The law expects employers to minimise redundancy so you have to consider the availability of suitable alternative work within the organisation. Provide full details of any existing vacancies so that employees can evaluate these properly.

Whether a job is suitable should be mutually agreed, but be warned – if the pay or job status is less then the employee is entitled to turn it down. If they accept then there has to be a minimum of one month’s trial period (it can be longer) during which either side can decide whether the role is working out. If the trial period is unsuccessful the employee can still be made redundant.
If there is no alternative to redundancy then you must confirm this properly in a meeting. An SMS or email will not suffice – follow this process:

  • inform the employee in advance of the meeting
  • allow them to bring with them a work colleague or trade union representative.
  • Confirm the outcome in writing, advising them of their right of appeal.
  • If the employee appeals, the meeting should be conducted by a manager, preferably one not previously involved, who has the authority to overturn the original decision. Again, the employee has the right to be accompanied, and employers must confirm the outcome in writing.Making redundancies is an unpleasant task at the best of times, handle it badly and may not only lead to legal action but it can demoralise the employees who are left.