Telling the truth about SME life today

… to sack your staff

1 Have a heart-to-heart”Ignore advice from your HR department,” says John Timpson, chief executive of the eponymous chain of cobblers. Don?t mess around. Take the employee to one side and have an off-the-record, heart-to heart chat. Quietly tell them it’s not working out. Give them some friendly advice and send them packing. 2 Hire slow, fire fast

If you want to avoid sacking people, tread carefully during the hiring process. Don?t rush into recruitment decisions,” says Charles Cohen, co-founder of Probability, the £5m-turnover mobile-gambling software firm.

“If one of your employees has left, don’t automatically assume you have to fill the position. And if your relationship with a new employee does turn sour, act quickly. Nine times out of ten, you?ll know by the end of week one if they?re not right.

3 Beware the 51-week thresholdRumour has it that employees only accrue unfair dismissal rights when they reach one year’s service. That’s not entirely true.

?Employees who are dismissed without notice are entitled to add one week to their actual service in deciding whether or not they reach the magic 12 months,” explains Graham Paul, partner at law firm Dundas & Wilson.

So beware: employees with 51 weeks” service will already have acquired unfair dismissal protection.

4 Block their accessAs soon as an employee has packed up their stuff and walked out the door, remove their remote access to your company’s systems. If you forget, you’ve just given a future competitor a direct route into the heart of your operations. Bad move.5 Don?t pre-judge

Even if you’ve been wanting to give Gary, your sloppy IT director, the boot for months, don’t prepare his letter of dismissal and hand it to him at the end of the meeting. This will make your decision look pre-judged and will result in the dismissal being unfair,” says Anna Denton, founder of Cardiff-based Morgan Denton Jones. 6 Write out a cheque Get your cheque book out and deal with it there and then,” says Peter Knight, Real Business columnist and founder of marketing firm Phoenix.

?Pay whatever it takes to avoid all that unnecessary waste of time with lawyers and then get them off the premises that day (after they?ve signed the proper documents).

“I don’t believe in beating myself up over hiring the wrong person, but I?m very self-critical of allowing the wrong person to stay and contaminate the rest of the team.

7 And make it a big oneHere’s how you calculate the sums: ?Work out how much the member of staff is owed in redundancy pay, back pay, etc. Once you have broken the bad news, show them the calculation. Then immediately write out a cheque for substantially more than that amount and offer it to them,” says Mark Needham, founder of mobile computing company Widget UK.

“Tell them you are paying them far more than you owe them, and the only thing you ask in return is that they sign a disclaimer saying they have been paid in full and will not sue you for anything in the future. A tricky-minded lawyer once pointed out to me that employees could claim they had accepted my cheque under duress and attempt to have a court overturn the disclaimer they signed. But, in practice, most people will stick to their word, even if they regret it.

8 Have tact”The first time that I had to sack someone, I was concerned about saying the right thing,” admits Graham Gough, co-founder of recruitment firm Maxxima Group. My boss at the time advised me to keep it short and sweet. When I asked him if he could suggest anything, he said to try this: “Margot, I don’t know what we d ever do without you but, from tomorrow, we re going to have a bloody good stab at it!” I didn?t take his advice; I would have been sued! Treat others as you would like to be treated.

9 Handle clients with care Don?t rely on restrictive covenants to stop ex-employees from poaching clients,” says Graham Paul at Dundas & Wilson. Preparation for the day that an employee leaves should begin on the day they join. Make sure that no single employee has too great a monopoly on one client relationship. When an employee does resign, there needs to be a strategy in place for communicating with their contacts. Clients don’t want to be the last to know.

10 Even your best staff can turn bad I employed a fantastic guy. Unfortunately, he discovered hard partying and drugs. His attendance started to fail miserably, his physical appearance deteriorated and his character completely changed almost overnight.

“It was bringing the rest of the team down and I couldn?t ignore it. I sat down with him twice to try and sort it out,” remembers Marco Gonzalez, a management consultant at But he wouldn?t go easily. I resorted to collecting evidence and then asking him to leave that day.

11 Don?t spook emWhen Gonzalez was a financial controller, he worked with a lady who ?was very obliging but wasn?t the brightest in the world . When she got a warning about her (lack of) performance, she got scared. And things went from bad to worse.

?She tried to make herself look good by posting things in the ledgers to balance them,” says Gonzalez. It was the most unoriginal form of creative accounting and I had no choice but to dismiss her.

12 Keep countMaking 20 or more people redundant in any 90-day period triggers a statutory consultation obligation of at least 30 days. Catherine Gannon, employment specialist at Gannons Solicitors, reveals what happens if you forget this rule: A London business initially made 15 people redundant. Ten weeks later, five more people left when their fixed contracts expired. Legally, these counted as ?redundancies” and triggered the consultation obligation, which the employer breached. All of the 20 employees were entitled to claim up to 13 weeks” gross pay at the Employment Tribunal.

The lesson” Stagger the departures.

13 Three magic stepsThere are three golden rules that you need to remember when sacking staff. First, invite the employee to a meeting with you. Make sure they realise that it’s a disciplinary meeting, not a chat about the weather.

Second, let them have their say. Take notes and record how long it lasts so you can prove it wasn?t rushed.

Third, ask a senior manager to review your initial decision you need an impartial opinion. If you fail to follow any of these steps, the dismissal is unfair and a tribunal has the power to inflate any award it makes to an employee by 50 per cent.

14 Deal with the adminHere’s the boring bit: admin. Paying pension contributions for years after an employee leaves, or allowing them to exercise share options that should have lapsed on termination, will burn serious holes in your pocket. Remember to tell your payroll and administrators about terminations,” warns Graham Paul at Dundas & Wilson.

15 Be consistentLast year, you discovered that Barry in sales had been colluding with a rival. You gave him a warning. A few months ago, you found out that Jenny in sales was doing the same thing. You sacked her. Watch out: if you behave inconsistently, you won’t have a leg to stand on in court.

16 Fools rush inDon?t ambush a member of staff with an allegation and fire them on the spot. Notice of a disciplinary hearing must be given at least 24 hours before the meeting.

17 Record everything?Entrepreneurs get into legal hot water by forgetting to record things like verbal warnings,” says Linda Narbeth, managing director of IT training firm Cherry Blue. Make employees sign a form that says they are aware of the action taken against them and agree that it’s fair. Don?t let anything slip by undocumented. It will come back and bite you on the bum.

18 Stagger payments You?ve just sacked Annie in accounts and now you’re facing a quandary: should you call in the solicitors and ask Annie to sign a compromise agreement and waive her statutory claims (quick fact: staff can bring an unfair dismissal claim within three months of the dismissal date) or will she presume you’re buying her silence and up her demands?

If you want to keep Annie away from the lawyers, offer her compensation and then stagger the payments. Give her the final payment after three months but only if she hasn’t made a claim.

19 Let them take a mateBefore you march an employee into a disciplinary meeting, ask them if they?d like to bring a companion with them. Failure to do this can result in a tribunal award of up to ?620.

20 Get the press on sideHeadlines about staff cuts aren?t going to do much for your brand. If the job losses are going to be substantial, my advice is to invest in media training for radio and television interviews,” says Marianna Marks, MD of M&M Communications. It can mean the difference between keeping and losing a good reputation.

21 Witness the sicknessBefore you sack someone for poor attendance, check whether they have a medical condition. The person you just fired for missing work for two weeks might have depression in which case you’ve just fallen foul of disability discrimination legislation.

22 Don?t dent their prideWant to give a senior manager the boot but worried they?ll kick up a fuss” Give them the dignity of telling family and friends that they?ve been made redundant or decided to leave. This can help you reach amicable terms of departure relatively quickly,” says Graham Paul at Dundas & Wilson.

23 Get your Facebook policies rightAn Argos employee posted the following comment on Facebook: “I work at Argos and can’t wait to leave because it’s shit. He was dismissed for gross misconduct. Fair” Maybe, but dealing with cases related to social networking sites are a legal minefield unless you have clear policies in place.

Imagine that comment was written by one of your employees. If it was made outside of work hours, you can’t use the argument of time wasting. The job may have been ‘shit” because he was being bullied by a colleague. And he may not have realised that you were scrutinising his webpage.

“If employers do not inform their workers that they monitor not only internal IT usage but also external social network sites, this will seriously complicate the disciplinary process,” says Chris Cook, an employment solicitor at SA Law.

24 Be wary of womenDismiss or demote a pregnant employee (or a woman on maternity leave) at your own peril. A Scottish accountant was demoted from her job after returning from maternity leave. She took legal advice and was awarded more than £20,000 in an out-of-court settlement,” warns Neeta Laing, head of employment law at Lewis Hymanson Small. Fall foul of the law and you face claims of sex discrimination.

25 And other minority groups Regardless of length of service, it’s unlawful to dismiss an employee on these grounds: sex or marital status; colour, race, nationality or ethnic origins; physical or mental disability; sexual orientation; religion.

26 Don?t sugar coat the newsBarry Skelhorn was working as a team leader at a Brighton-based call centre, running a team of 20 agents. He was summoned into the boss’s office with the one other team leader, only to be told that sales were down and that he had a choice of “heads” or ?tails?.

“The boss flipped a coin. I lost and was left to tell both teams that they would be let go that day, just two days before Christmas. It was awful but I got straight to the point. The employees told me they knew it was coming, thanked me for being honest and went to the pub.

27 Or be Mr Nice Guy”I would always get too emotionally involved when making tough employment decisions,” says Les Ashton-Smith, group chair of the chief executive development organisation Vistage International (UK). But being Mr Nice was not getting me anywhere. You have to take your emotions out of the equation and decide what’s best for the business.


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