In the latest Business of Farming feature series, Ben Pike takes a look at the difficult process of dismissing staff.
If finding good staff for your farm is difficult, dismissing them can be even harder.
There are many reasons why employment needs to cease. It could be performance related, someone’s conduct or simply a role becoming redundant.
Regardless of the reason, failure to follow proper procedures and handle the issue professionally can land farmers in a long, expensive employment tribunal.
Farmers Guardian spoke to agriculture and employment experts to find out how farm businesses can stay out of hot water.
Alan Dark, legal director at Midlands law firm Shakespeare Martineau, has assisted many agricultural businesses with staffing issues. His simple message is fail to prepare, prepare to fail.
Consider an individual’s status
You may assume someone who provides their labour and submits an invoice at the end of the month does so on a self-employed basis. However, a tribunal may decide differently if a case is brought.
Casual labour, such as fruit pickers or harvest staff, may not be permanent or full-time employees, but if they provide their labour on a consistent basis they may have employment rights. Equally, the relationship may have started as self-employed or casual, but over time the relationship develops.
What you have agreed in writing can be evidence of status, but if in practice it does not accord with reality, you may come unstuck.
How long have they been employed?
Having established an individual’s current status, it is important to consider how long the individual has held it.
Length of service is critical as the right to claim unfair dismissal, except in limited circumstances, applies only to employees with at least two years’ service.
Why are you dismissing them?
In order for any dismissal to be fair, your rationale must be either redundancy, capability, conduct, illegality or ‘some other substantial reason’. This can often be hard to define – conduct or capability in particular – but establishing the reason at the outset will dictate the process you must follow.
What procedure should I follow?
Getting the process right is equally important. For example, before deciding a person’s role is redundant you should meet with the employee, discuss ways in which their redundancy might be avoided and possibly implement retraining. If it is capability related, they should be told and given a period of time to improve.
How long will it take and how much will it cost?
Redundancy, for example, can take as little as one to two weeks. However, if you need to carry out a selection process among a group of staff this can take longer.
Large scale redundancies of 20 staff or more have statutory time limits and procedures. The amount of redundancy entitlement is set out in statute and linked to length of service and age.
On capability grounds, farmers need to allow time for the employee to address the issues, but there is no statutory severance if eventually dismissed.
Remember, except in dismissals for gross misconduct, an employee is entitled to be given notice once their dismissal has been communicated to them. Often there are commercial reasons why a business would not want an employee working notice to remain on-site. You should therefore factor in the cost of paying an employee upfront in lieu of notice. For long-serving employees this can be up to 12 weeks’ pay, subject to the contract stating anything more.
A relatively new piece of legislation allows for employers to enter in to a frank discussion with their employee about their future employment.They can make the employee an offer to terminate their contract, usually including a cash settlement. Crucially, the content cannot be referred to in subsequent tribunal proceedings.
This is a tactic which could be deployed when a potential dismissal could involve a number of witnesses and take a lengthy period to resolve or if it is otherwise commercially sensitive. A successful settlement can save time and expense.
Prevention is better than cure when it comes to employment law.
If a claim of unfair dismissal is brought against a farm it can be extremely expensive and time-consuming to deal with.
Priya Sheth, an employment law consultant with the NFU’s Employment Service, says there are a number of preventative steps which farmers can take to reduce the risk of a claim being pursued by an aggrieved former employee.
The NFU Employment Service provides practical help and legal advice to reduce the risk of being taken to a tribunal.
Disputes over employees’ rights are usually settled at a tribunal.
This is an independent judicial body and evidence is gathered and presented under oath.
Hearings are open to the public and the most common reasons tribunals are held are in matters relating to unfair dismissal, discrimination, wages and redundancy payments.
Tribunals can be lengthy affairs which end with ill feeling and large legal fees.
Fees of £160-£250 are charged for issuing a claim, and there is a further £230-£950 fee for a hearing. For lodging an appeal the issue fee is £400, plus hearing fees of £1,200.
Losing employers will be ordered to pay a penalty on top of any award made to the claimant if the tribunal finds the employer has breached the employees’ employment rights and has aggravating features.
This will be at least £100 with a maximum of £5,000 set.
The Advisory, Conciliation and Arbitration Service (ACAS) acts as an independent body to attempt to resolve disputes before they reach a tribunal.
Before lodging a claim, ACAS must be notified and one of its conciliators will then look to settle differences without the expense of a hearing.
The body says resolving a dispute through conciliation is faster, cheaper and less stressful than going to the tribunal.
However, not all disputes will be resolved and the next step is a tribunal hearing.
ACAS research has shown conciliation leads to 70 per cent of disputes being resolved without the need for a court hearing.
The body’s chairman, Sir Brendan Barber, says: “Our advice is it is always better to try and resolve a workplace dispute at the earliest possible stage. But anybody who finds themselves in a position where they are considering legal action should definitely consider our free conciliation service first.”