“You’re fired!”…is fraught with HR risk…but is an Alan Sugar-style dismissal always unethical?

“You’re fired!”…is fraught with HR risk…but is an Alan Sugar-style dismissal always unethical?

To sanction the ‘you’re fired’ Alan Sugar style of instant dismissal is going to be controversial, particularly for those who have been on the receiving end of one. Nevertheless, many employers will prioritise decisiveness over process. This will always heighten the HR risk, but is a swift determination necessarily a bad thing for the employee?

Over the years myHRdept have worked with hundreds, if not thousands, of employers. We’ve worked with those who are obsessively risk averse, but we’ve worked with an awful lot more who are prepared to accept a higher level of HR risk. One of our early jobs with a new client is to try to assess the HR risk level they are happy with.

Deciding on acceptable level of HR risk

By HR risk level, what I mean is the level of risk an employer is willing to accept (i.e. of a successful claim against them) in exchange for shortening HR processes in order to (usually) reshape their workforce, or remove an employee who is not performing. Proper HR processes take time and can involve substantial management input, even with HR support on hand.

Let’s consider an example:

Long serving Employee A is not performing, and the problem needs to be fixed. A proper HR process would suggest a staged approach with time and support to help the employee achieve the level of performance expected of them. Properly applied there is very little risk to the employer in following this process, even if the employee is eventually dismissed.

The problem for some employers is the ‘eventually’ part – a properly conducted process can easily exceed 6 months.Time and effort spent here means less time is available for doing and developing business. For those businesses in a hurry, particularly private equity backed businesses (myHRdept supports a number of these), the time and effort required by HR processes becomes a frustration, and many will want to simply remove the employee, even if that comes with a higher level of risk.

The fastest (and potentially riskiest) solution happens when the first meeting with employee A starts something like this…

“In the interests of transparency I’m going to say up-front that by the end of this meeting, you will no longer have a role with us, and my focus in the meeting is not to change that decision, but to find a way for us to part company in the most amicable and supportive way possible in order to help you secure a new position quickly.”

Now anybody with a modicum of HR knowledge will know that this approach is fraught with risk, never mind the ethical angle. Nevertheless, this is what many employers will prefer to do, and it can’t be argued that it isn’t swift and decisive. Some might argue that it’s also kinder to the employee (once the initial shock has subsided) than stringing them along for months, with the Sword of Damocles hanging above them.

Using settlement agreements to achieve a mutually agreed outcome

Many employers who choose to follow this approach will use a settlement agreement to neutralise their risk, and indeed that might cost less overall than if they had followed a 6-month process of performance management. It might also be more financially beneficial to the employee.

‘Commercial HR’

When a client mentions that they want our HR support to be ‘more commercial’, what they really mean is they want a faster resolution to their HR challenges than a strict adherence to the ACAS codes would allow. We operate in a commercial HR environment, and are to large extent governed by our client master’s wishes – although we will never be unethical. Our clients range from those who’s priority is risk minimisation (common, for example, amongst the charities we support) to those who want minimum or zero process outcomes. Swift resolutions, whilst initially shocking, can also be fair to employees, provided there is a deal on the table and the necessary support to help the employee move on – and that might be as simple as a skilfully worded reference.

What if a deal can’t be done?

For employers happy to live with the risk, what is the worst that can happen? Mostly employees will want to move on with their lives, rather than pursue a year’s worth of litigation by the time their case reaches a tribunal. With average awards from tribunals ranging from £10K to £30K, it’s rarely a route to great riches either – a tribunal award might not even cover the employee’s costs if they’ve hired legal representation.

I think the real risk is reputational – internal as well as external. Tribunals are public forums and outcomes and participants are a matter of public record. Other employees might be unsettled to learn of their employer’s behaviour towards a well-liked former co-worker, and potential hires might be put off. Employees not tempted to accept a financial settlement might be determined to have their ‘day in court’, and myHRdept presided over 2 such cases last year.

Choice is the employer’s prerogative

Should HR be prepared to support an employer who wants to take the short route?  Part of our job is to advise employers on the application of the ACAS codes, but if an employer wants to take a shorter route, and it is after all their prerogative, our role moves to helping them achieve that with the least risk possible. HR should never stand by and accept unfair and unethical practice, but there are many ways to achieve decisive resolutions that also meet the employee’s needs, and might be better for the employee than the alternative.

Whilst we would never encourage employers to shortcut ACAS codes the reality is that employers will do what they want anyway, and by being there we can at least use our experience to help both parties achieve an amicable deal.

HR Support from myHRdept

Now in our 20th year, we include in our outsourced HR packages a bank of support hours which could be used for anything HR-related, from HR administration to employment law. We frequently assist clients to manage their workforce issues, with a degree of risk they’re happy to live with. An effective HR resource is an enabler to organisational goals, and should not be a barrier. We pride ourselves on our commercial astuteness – for more about the team behind myHRdept, see our meet the team page.

If you’re thinking of outsourcing your HR or employment law needs, why not contact myHRdept? Call us on 01628 820515, email us at enquiries@myhrdept.co.uk to discuss your requirements, or contact us via our website and we’ll call you back.

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