For a small business owner, being an employer and managing a team of staff can be thoroughly rewarding, but the job is not without its troubles, particularly when it comes to the difficult task of disciplining or dismissing a member of staff.

Jo Eccles, business advisor at the Forum of Private Business, said: “No one likes having to discipline a member of staff, but disciplinary and dismissal issues are some of the most frequent enquiries we receive.

"A common example is where an employer has taken on a new member of staff and they are underperforming and they are unsure of how to proceed, thinking all they need to do is have an informal chat to discuss that it simply isn’t working out.

"As an employer it’s your job to ensure that you set and uphold standards of work and behaviour that are good for your business and the other members of your team, but it is also essential that you follow the correct procedures for what can be a very difficult issue to tackle.

Below are some of the key Dos and Don’ts to make sure you follow the right steps when it comes to managing the process.

Disciplinary

Dealing with potential disciplinary issues in a timely and effective manner can often nip bad behaviour in the bud and reassure other members of staff before things become a major issue. However if dealt with in the wrong way this can not only have a demotivating effect but also result in legal action. The costs can be significant, with the average tribunal award for unfair dismissal 2012/13 of £10,127, it pays to get it right.

Do

• Make your policy clear from the start – Tell each employee as soon as possible and definitely within 2 months of them starting work about your disciplinary procedures and who they can appeal to. These procedures should also be included in your staff handbook.

• Follow different processes depending on the severity of the employee’s actions and whether the discipline is a performance issue, or due to behaviour or misconduct.

• You need to allow an employee going through the disciplinary process to be accompanied to any disciplinary meetings by either a work colleague or a trade union representative.

Don’t

• Bury your head in the sand and hope that the problem will go away. Deal with performance or conduct issues as soon as they arise and don’t wait until they become critical.

• Fail to follow the correct procedures set out in the ACAS code of practice on disciplinary and grievance procedures as a minimum requirement. In the case of disciplinary procedures, should it develop to a tribunal situation, evidence that these have been followed will be required and if you fail to follow these, a tribunal could increase any resulting compensation to an employee by up to 25%.

Dismissal

In some instances, where the employee’s performance or conduct do not improve, or where their actions constitute gross misconduct, then you may be faced with the decision to dismiss them. This is not a decision to take likely and without careful consideration.

Do

• Ensure if you do have to resort to dismissing a member of staff that this is done ‘fairly’, this means that you have a fair reason for doing so. Common reasons can include, but are not limited to capability, conduct, illegality or redundancy.

• Remember that you don’t have to take employees with less than 24 months service through a full disciplinary process in order to be dismissed, but you should seek specialist advice to ensure that you are not in breach or employment law.

• In most dismissal situations, employees are entitled to notice either under their contract of employment or to statutory notice depending on the length of service.

• If you need to make staff cuts due to changes in the way in which your business operates, or due to a reduction in demand of your products, you can consider redundancy as an option.

• You should ensure that you pay an employee what they’re entitled to including pay up to the date of termination of employment, pay for any unused accrued holidays, pay in lieu of notice and any other contractual benefits after going through the correct redundancy process. It is also worth noting that any redundancy process, cannot include the ‘first in last out’ option.

Don’t

• Feel pressured to give a reference to an employee who has had their employment terminated. There is no legal obligation to do so. If you do, you should ensure that it is true, accurate and fair and based on documentary evidence to avoid any potential legal action.

• Refuse a request for written reasons for dismissal from an employee with 2 year’s continuous service as they have a right to written reasons within 14 days if requested.

Jo saids: “Disciplinary issues are one of the most common areas that businesses will face and ensuring you have the correct procedures in place from the start can avoid any problems later.”

“These issues are complex and it’s essential that you act carefully and seek specialist advice before dismissing somebody.”

The Forum of Private Business provides members with a legal advice line providing advice on all employment and HR issues for further information visit www.fpb.org