A leaked Government report commissioned by the Prime Minister and written by venture capitalist, Adrian Beecroft, argues that businesses should be allowed to run their companies in any way which allows them to become more efficient and competitive. The report
says it should be easier for businesses to dismiss "under performing" employees, suggesting an overhaul of unfair dismissal rules to make this possible. The report is said to recommend a new system called "Compensated No Fault Dismissal", which would allow
employers to sack unproductive staff with basic redundancy pay and notice.
Alison Loveday of Berg commented: "We will have to wait and see what changes are proposed. It is important to note, however, that there are already mechanisms in place for dealing with poor performance including the use of probationary periods, appraisal systems
and capability procedures. If used correctly, they can assist in effective performance management.
It is important for the employer to bring to the employee’s attention the required standards and targets at the outset of their employment. Employees should also be made aware of the possible consequences of not meeting certain targets. In many instances, there
are other underlying issues that need to be addressed, instead of or in addition to poor performance, such as ill-health, problems with childcare or caring responsibilities, excessive workload, or bullying. Therefore, carrying out investigations and pro-actively
discussing matters directly with an employee can expose the underlying issues of poor performance, without having to resort to formal action.
Probationary periods, of usually 3 to 6 months at the start of an employee’s employment, are an effective tool to enable employers to assess a particular employee’s suitability for a role, since the employer’s exposure to claims during this period is limited.
This mechanism can also be applied to employees promoted to a new role and case law suggests that tribunals allow the employer more scope to dismiss a probationary employee on the grounds of failing to meet the required standards than they would do in ordinary
unfair dismissal cases.
In the event of dismissal, the employer is likely to be better placed to demonstrate that opportunity for improvement has been given if regular appraisals have been undertaken, which can later be used to support a fair dismissal. Following the abolition of
the default retirement age, having in place appraisal systems has become of increased importance to provide a means of discussing the future plans and aspirations of employees. In this regard, Deputy Prime Minister, Nick Clegg’s plans for the law to be changed
to allow employers to have ‘protected conversations’ with staff which could not then be referred to in later employment tribunals as evidence of discrimination, seems a sensible and balanced approach to tackling the difficulties employers face when considering
how best to deal with employees."
To discuss how we can provide further advice in connection with these issues, please contact Alison Loveday head of Berg Employment, by email to
firstname.lastname@example.org or alternatively you can call Alison on +44 (0)161 833 9211.
The information and opinions contained in this article are not intended to be comprehensive or to provide legal advice. No responsibility for article’s accuracy or correctness is assumed by Berg or any of its partners or employees.
Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of the contents of this article.