Employee deemed “too expensive” by employer

A former executive who was dismissed when told by their manager that they couldn’t afford to give her a pay rise has been awarded £25,014 after winning a claim for unfair dismissal.

The employee was told that her pay rise request was being considered but the company’s cash reserves fell. When senior managers realised that they could no longer afford to give her a pay rise, they claimed her performance had worsened and accused her of gross misconduct.

The employee was dismissed and was awarded £3,425 for unfair dismissal, £18,288.82 for wrongful dismissal and £3,300.19 for unauthorised deductions.

This case serves as a reminder to employer to ensure that there is adequate evidence before claiming an employee’s performance has deteriorated. Be mindful that a decision relating to performance management has to be supported by documentation that exists at the point in time, not be historic and must demonstrate objective evidence of declining performance.

Employers must not attempt to manufacture evidence retrospectively to justify adverse employment actions. In all cases, employers must adhere to a fair and proper procedure, to avoid a finding of procedural unfair dismissal.

In addition, employers should ensure they are communicating any information relating to changes to pay effectively to employees, especially if an expected pay rise is no longer feasible. If an employer can no longer award a pay increase, they should first consider whether they risk breaching any contractual obligations in doing so. If not, inviting the employee for a meeting to explain why the pay increase can no longer be given.

Should you have such a situation then contact 121 HR Solutions to discuss. Contact us on 0800 121 9995 where one of our qualified consultants will discuss your options.

Employee deemed “too expensive” by employer

121 HR Solutions Ltd