Posted on Jul 16, 2014 in Employment by Noele McClelland
As the UK Cabinet reshuffle takes shape, we look at how employers deal with under performing employees and the issues they may face.
The news has been dominated this week by the Prime Minister's reshuffle of the UK Cabinet. The whole process occurred quickly and as individuals left (some to a ministerial car, some not) their status and position could have altered considerably. Depending on which media story you read, some of the changes were far from mutually agreeable to the parties.
Cabinet Ministers are not "employees" and serve at the pleasure of the Monarch on the recommendation of her Prime Minister. There is therefore considerable freedom for the "boss" of UK plc to shake up of his senior management team.
But could a "normal" employer be able to do something similar? The short answer is no and in fact if an employer were to try to follow a similar strategy the most likely effect would be a claim to the Employment Tribunal and the incurring of significant cost to resolve matters.
Employers faced with underperforming employees normally cannot dismiss the employee immediately. The drama and speed of Westminster normally cannot be seen in ordinary businesses. An employer seeking to dismiss (or discipline) an employee for capability issues requires to go through a proper process before action can be taken. This will normally involve providing the employee with support, assistance and (most crucially) time to allow them to improve.
The cost and time involved in dealing with underperforming employees is a common concern for employers. While a robust management system can address some of these concerns, dealing with senior employees (who may be less willing to see their faults) can have its own challenges. However the potential Tribunal award if the process is not carried out properly or an employer is deemed to move too quickly, means that a longer process may well be a more cost effective option.
One element of a reshuffle could be an option to an employer. They may wish to move around their senior team between departments to allow for new perspective and the utilisation of differing skills. Whether it can be done will depend on an employee's contract and if the appropriate flexibility has been built in, this may be possible, provided the changes are reasonable. There is of course the practical issue of managing personalities in such an exercise and where possible ensuring both sides agree with the move.
Of course sacking a Minister does not actually mean they leave the "company" and in fact their continuing presence (albeit from the backbenches) can be a considerable problem for a government. Similarly for an employer, demoting an employee or moving them to a different role can merely leave a performance issue unaddressed. The ability of an employer, albeit possibly at a financial cost, to be able to remove the source of disharmony from a business may be seen as a positive compared to the fevered atmosphere of Westminster or Holyrood.
One unusual aspect of a reshuffle is that if an individual ceases to be a minister, then they also get an automatic pay off, in the region of between £8,000 and £17,000. Given that some of the departures appear to be on the grounds that the individual's performance in his role was not good enough the right to such a payment may come as a surprise to many. For a few of the people affected (as they are merely moving to another post) there is no pay off despite the fact that they may be losing stature and a grace and favour residence. For employers, dismissing an incapable employee does not normally (if done properly) trigger any other entitlement other than notice pay.
Overall, faced with underperforming employees, an employer is best to have a robust process for addressing such concerns. Improvement may result, but at the same time the proper process allows an employer to address the position should it not be forthcoming. It may not be as fast as a reshuffle but equally if done properly will minimise the risk of unpleasant publicity and cost.
Noele McClelland is an Associate in Thorntons Employment Law team.