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Max Lowry
Max Lowry, Advocate
Category: Law
Satisfied Customers: 1457
Experience:  LLB, 10 years post qualification experience
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Could you please advise me as to my position. I own a flooring

Customer Question

Could you please advise me as to my position. I own a flooring retail business, I set the business up with a friend seven years ago, I put up all the money, the shop premises are in my name as are all the supplier accounts, bank accounts (which he has no access to) I pay him a weekly wage on which I pay PAYE. The business is struggling and so I recently invested £15,000.00 of my own personal money (I already have a business loan of approximately £8,000.00 remaining, overdraft of £13,000.00 and business credit card debt £7,000.00) At the time of setting the business up he had the flooring knowledge having worked as a salesman in various other flooring retailers for three years. I have been told by my book keepers in the past that he has been doing cash deals as the accounts have not added up, I have confronted him about this but he obviously denied it, the week before Easter he gave me £450.00 cash to bank from a customer we had fitted a stair carpet for the day before. On doing the book work the following week I noticed that the invoice connected to this sale was actually for £550.00 but he had written paid £450.00 cash on the bottom of the copy invoice we hold for our records. When I queried this with him he told me that he had done a deal with her as she had brought her son and father to the shop who had also brought carpet from us. I didn't believe him and so contacted the customer direct to query the invoice. She confirmed that she had paid £550.00 as per the original invoice. Am I legally in a position to fire him ? My main concern is that he does not have a contract. I am prepared to pay him one months wages and let him keep the car that I have supplied him with on the condition that he hands over the shop keys immediately and his mobile phone which is on a business contract that I pay for. I would be very grateful for your advise on this as soon as possible
Submitted: 3 years ago.
Category: Law
Expert:  Max Lowry replied 3 years ago.

Max Lowry :

Hi, welcome to Just Answer. I will help you with your question.

Max Lowry :

You say you set up the business with a friend seven years ago, so is he also a director of the company in addition to being an employee?

Max Lowry :

And does he own shares in the company?

JACUSTOMER-ynce4mmy- : No he is not a Director and he does not own any shares
Max Lowry :

Okay. But he is an employee?

JACUSTOMER-ynce4mmy- : Yes, I have a PAYE scheme for him set up
Max Lowry :

Okay. Clearly, if he has stolen money from the company (which seems to be the case from what you have said) then that would amount to gross misconduct. This would entitle you to dismiss him without notice.

Max Lowry :

However, you should ensure that you carry out a proper investigation, to make sure that you have your facts straight.

Max Lowry :

It's often appropriate in these cases to suspend the employee for a short period of time, whilst gathering your evidence, such as by contacting the relevant customers concerned. I know you've already done this with one customer, but there may be others worthy of investigation.

Max Lowry :

The fact he does not have a written contract does not mean that you cannot dismiss him. You can still dismiss him.

Max Lowry :

There is a very useful guidance note from ACAS that you may wish to consider here: http://www.acas.org.uk/media/pdf/s/o/Acas-Guide-on-discipline-and-grievances_at_work_(April_11)-accessible-version-may-2012.pdf

JACUSTOMER-ynce4mmy- : Do I need to dismiss him in writing or can I do this verbally ?
Max Lowry :

You should put in writing, although strictly there is no legal requirement to do so, it is the most appropriate thing to do.

JACUSTOMER-ynce4mmy- : Ok thank you for your help
Max Lowry :

But as I mentioned above, he should be given the opportunity to respond to the points that you make, and the formal meeting is the best place the most appropriate way to deal with that. This is covered in detail in the guide that I have referred you too.

Max Lowry :

You're welcome. Please remember to rate the answer as highly as you can for me. Thank you for your question this morning. If you need more information later, do just let me know.

JACUSTOMER-ynce4mmy- : Surely when I queried him about the amount the customer had paid being £100 less than the amount on the invoice and he told me that he had done a deal with the customer for a cash payment because she had introduced other business to the shop was his opportunity to respond ?
Max Lowry :

That is true, although there may be other examples that you wish to query, and put to him? The consequences of being dismissed are, of course, very important and significant. It is therefore essential that you are rigourous with your investigations.

Max Lowry :

And although you may have sufficient evidence already to justify dismissal without notice, you have to follow a fair procedure as part of that process.

Max Lowry :

If you fail to follow the correct procedure, such as suspending and holding a formal meeting, then the dismissal may be considered unfair by tribunal. Is always best to act with a cool head, and rationally, and follow the appropriate procedures.

Max Lowry :

Does this answer your question this morning, or is there anything else I can help with?

JACUSTOMER-ynce4mmy- : I am a little confused as to why I need to suspend him when I already have gathered the relevant evidence that he has stolen from the company, he has been given the opportunity to respond to the claim and he continued to lie. I am prepared to pay him a months wages even though I am fully entitled to dismiss him with immediate effect (will this months wages not act as a suspension period ?)
Max Lowry :

There are two parts to a disciplinary/dismissal process. The first is the reason for the dismissal. Clearly, here, you have sufficient grounds to dismiss. The second part is the procedure that is used to dismiss.

Max Lowry :

Both parts have to be "fair" in order for the dismissal itself to be considered fair. If you fail to follow a correct procedure, even though you have good reason to dismiss, it can still be considered unfair.

Max Lowry :

The ACAS guidance note does set this out clearly for you.

Max Lowry :

Here is an additional guidance notes on the same point: http://www.cipd.co.uk/NR/rdonlyres/44BE626C-3F04-4266-A835-41E763D58912/0/Fairdismissalprocedures.pdf

Max Lowry :

If you want to be absolutely in the right, and avoid the prospect of any claim succeeding against you, it is worth suspending him for a few days and doing this in the manner suggested. I know it is frustrating, particularly when you appear to have everything in order, but the law is the law.

Max Lowry :

I hope this answers your question. If you need further information, just let me know. Please do remember to rate my answer as highly as you can.

Max Lowry :

I should have added, that the offer of months wages will not amount to an suspension. It may, however, have the same practical effect for you, and it is therefore sensible to follow the suspension route, and reduce your ultimate offer afterwards if you want to do a deal with him.

Max Lowry :

Does this answer your question?

Max Lowry :

I would add, you can instantly dismiss if you're satisfied that nothing else will come out of this, and that his explanation isn't going to be different. The proper procedure is always the best way, it puts things in a formal context, but if you really want to, then just make sure you have notes/records of what his explanation is etc. should you need to rely on it later. It's more risky doing things this way, but in theory, you can do it.

Max Lowry :

Are you there?

Max Lowry :

I hope this answers your question. If you need further information, just let me know. Please do remember to rate my answer as highly as you can.

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