🚪 Dismissal and Redundancy
Big Idea: Dismissal means the employer ends the employment because of the employee's behaviour or performance. Redundancy means the job itself no longer exists -- it is not the employee's fault.
Dismissal
- The employee is removed because of their own actions -- misconduct, poor performance, or breach of contract
- Must follow a fair process: investigation, formal warning, hearing with right to representation, decision, right of appeal
- Unfair dismissal occurs when the correct procedures are not followed or the reason is not legally valid -- this can lead to costly legal action
Redundancy
- The job role is no longer needed -- this is NOT the employee's fault
- Common causes: business restructuring, downsizing, automation, outsourcing, relocation, declining demand
- Employees made redundant are usually entitled to redundancy pay (compensation)
- Can be voluntary (employees choose to leave, often with enhanced payments) or compulsory (employer selects who goes)
This is a crucial distinction that exams test: Dismissal = employee's fault (behaviour/performance). Redundancy = NOT the employee's fault (the job disappears). Never confuse the two!
In the DA case study, the proposal to outsource production to Star Electrics raised concerns about redundancies. Ben, the HRM director, worried about the impact on DA's employees -- some would lose their jobs not because of poor performance but because their roles would no longer exist within DA.
Steps in a fair dismissal
- Step 1: Investigation -- gather facts about the alleged misconduct or poor performance
- Step 2: Formal warning -- notify the employee in writing, explaining the issue and expected improvement
- Step 3: Disciplinary hearing -- a formal meeting where the employee can present their case, with the right to have a representative present
- Step 4: Decision -- the employer decides the outcome: no action, further warning, or dismissal
- Step 5: Right of appeal -- the employee must be given the opportunity to appeal the decision
Exams may ask you to 'outline the steps in a dismissal process.' Learn this five-step process -- it scores well every time. ✅
Impact on the business
- Legal costs if dismissal is challenged as unfair
- Morale -- other employees may feel anxious if dismissals are handled badly
- Recruitment costs -- the business needs to find and train a replacement
- Reputation -- frequent or unfair dismissals damage employer brand