Terminating a staff contract can be a complex and uncomfortable workplace issue so it needs to be handled with care and in complete compliance with the law.
If you fail to abide by the law, then you could face an unfair dismissal claim from your employee which can end in a hefty payment and give your business a bad reputation.
An employer may choose to terminate a staff contract by dismissing an employee for any of the following reasons:
- Gross misconduct
- Lack of capability/performance
- Redundancy
- Breach of a statutory restriction
- Another substantial reason
It is important that you confirm that your decision for termination is fair and that you have issued any initial warnings to the employee where necessary.
When you decide to terminate an employee, you must give them the notice stated in their contract of employment or the statutory minimum. This is one week if they have been employed by you between one month and two years, or one week for each year of employment (up to 12 weeks).
During this notice period, the employee must receive their normal pay unless they are being dismissed due to gross misconduct.
If they have been with the company for less than a month, or the employee has committed a severe act, then they can be dismissed without notice.
A severe act would include things such as theft, fraud, violence, arson etc. which are all not only breaking code of conduct in the workplace but, also, criminal acts.
However, in this case, you would need to ensure a full investigation is carried out and that your disciplinary procedure is followed before acting.
It’s always best practice to provide written notice of termination and explain to the employee exactly why they are being dismissed. This ensures that there is evidence of fair and just dismissal, which will help you if there are to be any claims of unfair dismissal made further down the line.
You may also choose to exercise your right to implement ‘garden leave’, which is when an employee is asked to stay away from work during their notice period whilst still receiving their normal pay. A decision like this may be necessary if it is believed that having the employee in the workplace may cause problems or be a distraction. They should, however, still be available to work if needed at any point during their notice period.
Alternatively, you can issue a payment in lieu of notice which is when you pay the employee for their notice period, but they do not have to work it.
The most important things to remember when terminating a staff contract are that you must follow due process, issue the correct notice period, a written letter of termination, a fair reason for dismissal and the pay they are owed.
The biggest mistake you can make is to dismiss someone for a reason that falls under a protected characteristic, such as age, race, disability, gender etc., as this would be deemed discrimination.
If you need support with writing a termination letter or when having a difficult conversation with a member of staff, our qualified HR consultants are on call 24 hours a day to provide you with legally compliant and bespoke advice.
Call us today on 0845 2626 260 to book a COMPLIMENTARY consultation.
