Managing Difficult Employees Without Ending Up at Tribunal

Ministry of Justice statistics: UK employers face over 120,000 employment tribunal claims annually, with unfair dismissal accounting for 35%. Average award? £11,800—before legal costs of £8,000-£25,000. Yet ACAS research shows 80% are preventable with proper processes.

The UK SME Reality:

FSB's "Employment Tribunal Survey": 40% of small businesses faced an employment dispute in the past five years. Of those:

• 62% said it significantly impacted operations
• 38% settled to avoid tribunal (average: £8,500)
• 45% spent over 100 hours of management time
• 28% experienced damaged team morale

Common UK Scenarios:

Underperformance: CIPD's "Managing Performance" report shows 23% of UK managers have at least one seriously underperforming team member.

Misconduct: CIPD Absence Management survey 2023: UK employees took average 7.8 days sick leave (highest in a decade). Persistent lateness and unauthorised absence create operational headaches.

Capability Issues: With 19% of UK employees now over 50, capability issues are rising. Health issues or skills gaps require sensitive handling under Equality Act 2010.

The Legal Framework:

Unfair Dismissal Protection: After two years' service under Employment Rights Act 1996. However, Employment Rights Bill 2024 proposes day-one protection.

Current tribunal statistics:

• 42% of unfair dismissal claims succeed
• Average basic award: £1,800
• Average compensatory award: £11,800
• Maximum: £115,115 or one year's salary

The ACAS Code:

Not law, but:

• Tribunals expect you to follow it
• Failure can increase awards 25%
• Following it can reduce awards 25%
• It's considered basic good practice

The Right Process (UK-Compliant):

Step 1: Informal FirstACAS strongly encourages informal resolution:

• Explain concerns with specific examples
• Listen to their perspective
• Agree improvement plan with timescales
• Document the discussion

UK reality: Many SMEs skip this, jumping to formal action. Tribunals view this negatively.

Step 2: Formal Process (ACAS Code)

Investigation:

• Gather facts and evidence
• Keep objective and documented
• Appoint someone independent

Invitation to hearing:

• Give 48 hours notice minimum
• Explain allegations clearly in writing
• Provide evidence copies
• Confirm right to be accompanied

Disciplinary hearing:

• Present evidence
• Allow employee response
• Allow representative to contribute
• Adjourn to consider
• Keep detailed notes

Decision:

• Consider all evidence
• Decide sanction: warning or dismissal
• Confirm in writing with reasons
• Confirm right of appeal

Step 3: Appeal Process Mandatory under ACAS Code:

• Different manager if possible
• Hold appeal hearing
• Review decision and process
• Appeal decision is final

Common UK Tribunal Mistakes:

No warnings given (28% of successful claims): Jumping to dismissal without documented warnings.

Inadequate investigation (35%): Making assumptions without gathering facts.

No right to be accompanied (22%): Workers can bring colleague or union rep to formal meetings.

Inconsistent treatment (31% of discrimination claims): Handling similar situations differently.

Poor documentation (42%): No written records. If not documented, it didn't happen in tribunal eyes.

Procedural failures (38%): Not following your own procedures or ACAS Code.

Special UK Considerations:

Gross Misconduct: Theft, violence, serious breaches can warrant summary dismissal, but you must still investigate, hold hearing, allow appeal.

Sickness Absence: Equality Act 2010 considerations:

• Is it disability-related?
• Have you made reasonable adjustments?
• Have you obtained Occupational Health advice?
• Use capability approach, not disciplinary

Protected Characteristics: Extra care if employee:

• Has disability
• Is pregnant or on maternity
• Has raised discrimination complaints
• Is a whistleblower
• Recently returned from family leave

Dismissing without proper process risks discrimination claims—averaging £18,200.

Probation Periods: Many wrongly assume probation means no risk. Reality:

• After two years, full unfair dismissal rights apply
• Before two years, still protected against discrimination
• Still need fair reason and basic process

The True Cost:

Direct costs (MoJ data 2023):

• Average basic award: £1,800
• Average compensatory award: £11,800
• Discrimination claims: £18,200
• Aggravated damages: £5,000-£15,000

Legal costs:

• Simple case: £8,000-£12,000
• Contested case: £15,000-£25,000
• Complex discrimination: £25,000-£50,000+

Hidden costs:

• Management time: 50-150 hours
• HR/legal advice: £2,000-£5,000
• Recruitment replacement: £3,000-£8,000
• Lost productivity: Immeasurable
• Team morale impact: Significant

Total average: £25,000-£40,000

When to Get Expert Help:

ACAS research shows early advice reduces tribunal risk by 60%. Get help:

• Before starting disciplinary process
• When considering dismissal
• If employee has protected characteristics
• For sickness absence cases
• When employee raises grievance

Your Action Plan:

1. Review disciplinary policy—does it follow ACAS Code?
2. Train managers on basic employment law
3. Document everything: concerns, conversations, evidence
4. Always follow your process, every time
5. Get HR advice before dismissal
6. Never dismiss in anger

Fair treatment and ACAS-compliant process protects both you and the employee. Doing it right is always faster and cheaper than defending tribunal claims.

UK tribunals judge you on process as much as reason. Get the process right, dramatically reduce your risk.

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