Pinsent Masons Urgent Briefing header image

Dismissals in the Construction Sector; as easy as 1, 2 3?

October 2005

This article first appeared in Contract Journal on 19 October and was written by Edward Goodwyn, Employment Partner at Pinsent Masons

  

 

On 1 October 2004, new statutory Dismissal and Disciplinary Procedures ("DDP") came into force, setting minimum standards for the handling of dismissals and disciplinary matters.  One year on and the DDP is presenting serious practical difficulties for construction employers. 

The DDP should always be followed where a construction employer contemplates dismissing an employee for misconduct, for instance for fighting on site or stealing materials.  However, the DDP applies to the vast majority of dismissals and is not just applicable to dismissals for misconduct.  For instance, the DDP will apply to dismissals which are based on performance, medical incapacity/ill-health, compulsory retirement and the expiry of a fixed term contract. 

Although the DDP does not technically apply to some types of disciplinary action falling short of dismissal, such as written warnings, it is best practice to make sure that the DDP is followed in all cases where disciplinary action is contemplated.

Consequences

If an employee challenges the fairness of his/her dismissal in an Employment Tribunal and the employer has not complied with the DDP, this will automatically mean that the dismissal is unfair.  Also, the Tribunal will almost always increase any compensation awarded by between10 and 50%. 

Key steps

The DDP consists of three procedural steps:- 

  • Step 1 – Inform and Invite. The employer must inform the employee in writing why they are contemplating dismissing or taking disciplinary action and the possible consequences of taking such action. The employer must invite the employee to attend a meeting to discuss the issue;
  • Step 2 – Meeting. The meeting must not take place unless the employer has informed the employee of the reasons for the contemplated dismissal or disciplinary action and the employee has had a reasonable opportunity to consider his/her response.  The employee must take all reasonable steps to attend the meeting.  After the meeting the employer must inform the employee in writing of the decision and notify him/her of the right to appeal;
  • Step 3 – Appeal. The employee is required to inform the employer if he or she wishes to appeal.  If so, the employee must be invited to attend a further meeting.  Again the employee must take all reasonable steps to attend the meeting. The final decision must be notified to the employee in writing after the appeal hearing.

General Requirements

In addition to making sure that the three steps are followed, there are some general requirements which must be followed when applying the DDP and these are:-

  • each step and action must be taken without unreasonable delay;
  • the timing and location of meetings must be reasonable;
  • meetings must be conducted in a manner that enables the employer and the employee to put forward their respective cases;
  • any appeal should be heard by a more senior manager.

This may create the impression that the DDP is relatively straightforward.  In reality, employers and employees alike have suffered teething problems. The construction industry is no exception to this and, in fact, has its own particular difficulties.  Many construction employees work exclusively on site, rather than in or near an office, so the question of what is a "reasonable" location for a meeting is not straightforward.  An employer and an employee may have sharply differing views of what is a "reasonable" time for a meeting if, for instance, the employee works night shifts.  Furthermore, even many larger construction employers lack a specialist HR department to manage the process. 

What follows is a list of some common mistakes made by employers in conducting the procedures:

Common Mistakes  

  • "It's OK not to follow the DDP for employees with less than one year's service, isn't it?"  This is a dangerous assumption.  Generally, employees need one year's service in order to bring an unfair dismissal claim.  An employee who is ineligible to claim will have no remedy if the DDP is not followed.  However, there are some exceptions.

For example, if a Building Site Manager with two months' service is dismissed because he disclosed to his employer potential health and safety risks, he could be able to bring an unfair dismissal claim.

Also, no qualifying period is needed to bring a claim for discrimination, for instance on the grounds of race or disability.  An employee dismissed for a discriminatory reason could therefore bring a discrimination claim and obtain up to a 50% increase in compensation if the DDP was not followed.  As there is no limit on discrimination compensation, this is a frightening prospect for employers.  Therefore, it is sensible to apply the DDP to all cases to avoid being caught out.

  • "I can just tell an employee about a disciplinary hearing without having to supply evidence before the disciplinary hearing."  This is incorrect. The DDP requires employers to set out in writing the "basis of the allegations" prior to the hearing.
  • "Surely the DDP only applies to employees who have committed gross misconduct?" This is a frequent mistake.  The DDP in fact applies to a variety of dismissal situations, including those listed above.  For example, if a bricklayer is employed on a fixed term contract for 18 months and that contract is about to expire, his employer must go through the DDP before his contract expires. 
  • "I do not need to allow the employee to be accompanied at a disciplinary meeting." Employers must permit an employee to be accompanied to a disciplinary meeting by a work colleague or a Trade Union representative. Failure to do this could result in an award of two weeks' pay, subject to a statutory cap (currently £280 per week). 
  • "If an individual employee is redundant because the project she was working on has completed, I do not need to offer her the right of appeal against dismissal."  The employer must offer the right of appeal in accordance with the DDP.  
  • "I've not had time to arrange a dismissal meeting but a few weeks' delay is OK."  It is a breach of the DDP to delay any step unreasonably. 
  • "I do not have to offer the right of appeal as the employee did not put his request in writing and did not do so within the 7 days which is specified in our disciplinary procedure."  This does not matter.  The employer must still hold an appeal meeting otherwise it will be in breach of the DDP and the dismissal is automatically unfair.

Sound advice

As a starting point, employers should make sure that existing disciplinary/dismissal procedures comply with the basic minimum laid out in the DDP.  Also, managers should receive training on the DDP, its application and the consequences of not complying with the DDP.  Further information on the statutory procedures can be found on the DTI website at: www.dti.gov.uk.

For media enquiries contact :

Lakhbir Rakar
CM PR Advisor
Pinsent Masons
Direct Dial +44 (0)121 260 4005
Fax +44 (0)121 626 1040
E-mail lakhbir.rakar@pinsentmasons.com