Alternatives to employee dismissal

Dismissing employees should always be a last resort. Firstly, because it’s much better to avoid the staff turnover and employee relations costs that come with firing someone. And secondly, letting an employee go always carries the risk of an unfair dismissal claim.

It’s usually better to resolve performance or conduct issues and retain the skills and knowledge of your staff. Here are some useful alternatives to employee dismissal.

Try to resolve issues informally

When a problem with an employee arises, your first response should be to try resolving things informally (assuming the problem isn’t really serious, like a theft or violent attack).

You can hold a meeting with the employee, address your concerns and agree on a course of action. Follow up with a review meeting later, to make sure the action has been taken. In most cases, this will be enough to sort the problem out.

Use formal disciplinary procedures

If the issue is serious, or informal efforts have failed, using your organisation’s formal disciplinary procedure is the next step.

Formal disciplinary procedures can be used when an employee is suspected of misconduct, is under-performing, or has unacceptable absences. All these can lead to dismissal — but not before you follow an Acas-friendly process that includes a full investigation, clear communication, a meeting with the employee, and the right of appeal.

Issue a formal warning or put them on probation

Even if your formal disciplinary procedure finds the employee firmly in the wrong, you don’t have to dismiss them. You could give them a final opportunity to improve their performance, by issuing a formal warning or placing them on probation.

Probation should be for a fixed period of time. You should let the employee know what improvement you expect and provide support, such as training, to achieve it. Depending on the terms of the employment contract, you may be able to withhold certain benefits and provide shorter notice of dismissal while the employee is on probation.

Offer alternative employment

If the employee is underperforming, a useful alternative to dismissal is to find a suitable alternative role for them.

Offering alternative work should be a last resort before dismissal — you should use disciplinary procedures first. The new role does not have to offer the same level of pay or conditions. Offering alternative work may count in your favour if the employee claims unfair dismissal and the tribunal must decide whether you acted fairly.

Agree on a settlement and part by mutual agreement

If you decide the employee really has to go, dismissal is still not the only option. You can also negotiate a settlement agreement with the employee, the terms of which could include termination by mutual consent rather than dismissal.

The agreement will usually involve a financial settlement payment from you to the employee, in return for the employee waiving their right to make a legal claim.

Have a question?

Ask away, we’ve got lightning fast answers for UK business owners and employers powered by qualified experts.

    Share this article

    More on dismissal and redundancy

    Redundancy consultation letter template

    Making redundancies is stressful. Not only is it difficult to let good employees go, but there’s also a complicated legal process you must…

    Job at Risk of Redundancy Letter Template

    Redundancies are unfortunately common during turbulent times. They serve as a method of keeping a business open and running whilst…

    Employee dismissal and redundancy rights

    When it comes to employee dismissal and redundancy rights, you need to get them right — or you could face a complaint ending in a costly…

    What is voluntary redundancy?

    No business enjoys bringing its workforce bad news. Redundancy is just that. But there’s a way to make it a little less upsetting. You can…

    Compulsory redundancy guide

    Making redundancies is always a difficult process for businesses. But depending on circumstances, it might be the only option you have…

    Statutory Redundancy Pay

    Employers will always take pains when considering redundancies . Not only do they lose valuable talent, but any growth or expansion must…

    Redundancy for furloughed employees

    Many businesses have faced financial difficulties because of the COVID-19 pandemic. One scheme put in place to help with business money…

    Alternatives to Redundancy

    No company wants to lose its hard-found talent. Losing employees can cripple a team, slow down workflows, and even permanently damage a…

    Redundancy on maternity leave

    When considering redundancies , employers must choose employees to make redundant carefully. They must use a fair process, one that…

    Disciplinary at Work

    Managers and employers often work hard to ensure their employees work effectively and happily in their workplace. However, sometimes an…