First One In, First One Out?

Cork Boss

Hi, long time lurker.

I own a small business, opened about 18 months ago.

Business has been good, and 4 months ago took on my 5th employee. I knew I was taking a little risk, but business was expanding month on month, and I felt there was plenty more business to attract. (I'm happy with this persons performance so far.)

This judgement that there was more business to attract has proved correct however the business attracted is not moving through my production pipeline quickly enough. So although I have plenty of incoming leads and confirmed orders, sales are down from lack of efficiency.

This is (in my opinion) down to an existing employee who is cruising in 2nd gear, we're a small business and can't afford passengers, and his position is a central cog in the production process. It's hard for me to prove his lack of urgency, as he always 'looks busy' but is basically 'faffing around' pretending to be working on necessary designs etc...

So with increased overheads, yet reduced sales, it's starting to bite. If things don't improve soon, I'm going to have to reduce overheads i.e A salary. There is no logical reason why my sales shouldn't be increasing.

My question is that if I have to let someone go, does it have to be my latest recruit, or can I let the person I feel is slowing down my business?
I don't want to land in a tribunal, as he is a bit sure of himself and his 'workers rights'.
However if if I decide my business cannot sustain it's overheads then surely I can make this decision without fear of reproach?

Is the first in first out policy a legally binding one?

Advice appreciated.

GoneShootin

Note to future repliers:

Please don't offer legal advice for this thread. Base comments perhaps on experience and anecodatal commentry.

Happy_Harry

Surely there are better ways than letting someone go ? Would it not be better that the employee you suspect of "faffing around" becomes more productive ? It will solve your business problem as well.

Why not present the problem of an inefficient production process to your employees and see what they can come up with in terms of improvements ? Maybe there are other reasons the process is inefficient, maybe there are inhibitors for this one employee to complete his piece of the line efficiently. If it is faffing around that you are worried about why not do a time management exercise ( I am sure you can download these online) ? I would probably include other employees as well.

Whether you have tribunals to be worried about or not , fairness requires you to make sure that you have given the employee ample opportunity to improve, which would start with highlighting the problem.

Bandara

if the slacker is a salesperson then he (and everyone else) should be given set revenue targets, if he hits his targets his commission kicks in and he get a good financial bonus.

If he fails his target repeatedly (3 failed months in a row) then he is gone.

That's fair to him as his work is easily documented and he can earn more money, it will cost you more money but that's worth it if he is doing a great job for you.

If he is not sales then some other form of performance assessment is required be it projects completed on time or whatever. He will either buck up and swim, or he'll sink. Either way you have a good outcome.

information

Cork Boss wrote: »

Is the first in first out policy a legally binding one?

No, You can sack anyone you like.
If they are there less than a year, you can fire them on the spot, just give them the statutory notice or whatever it says in their contract.
If they are there more than a year, you should follow your procedure to get rid of them, verbal warning, written warning etc.
If there is no work you can make them redundant.

Cork Boss wrote: »

This judgement that there was more business to attract has proved correct however the business attracted is not moving through my production pipeline quickly enough. So although I have plenty of incoming leads and confirmed orders, sales are down from lack of efficiency.

sales aren't down, you have a production problem, if sales were down you would have no work for the staff to do.

Cork Boss wrote: »

This is (in my opinion) down to an existing employee who is cruising in 2nd gear, we're a small business and can't afford passengers, and his position is a central cog in the production process. It's hard for me to prove his lack of urgency, as he always 'looks busy' but is basically 'faffing around' pretending to be working on necessary designs etc...

how are you measuring his work rate ?
set targets for your staff if they miss targets, start giving out the warnings so you can dismiss them

Bandara

information wrote: »

No, You can sack anyone you like.
If they are there less than a year, you can fire them on the spot, just give them the statutory notice or whatever it says in their contract.

This is dangerously incorrect information, and you will up with a unfair dismissal case on your hands.

Corkboss, I'd strongly advise you join the SFA - Small Firms Association or RGDATA (depending on your business).

The cost is reasonable and you have unlimited access to qualified people who will give you the exact legal advice for any employment law scenario, they are also various other services they offer to members.

information

information wrote:

No, You can sack anyone you like.
If they are there less than a year, you can fire them on the spot, just give them the statutory notice or whatever it says in their contract.

Hammertime wrote: »

This is dangerously incorrect information, and you will up with a unfair dismissal case on your hands.

I stand over the above that you quoted and can back it up, what is your opinion based upon ?

Bandara

information wrote: »

I stand over the above that you quoted and can back it up, what is your opinion based upon ?

Two things

One
My wife is a Solicitor.

Two
I have just phoned and spoken to IBECs employment law advisors who informed me that if the person was to bring a unfair dismissal claim they would have very strong grounds against you.

Regardless of any difference of opinion, I assume we both agree that the op needs to get direct professional advice before doing anything.

I wasn't having a go at you but such a black and white view without knowledge of the full situation is dangerous and could cause the op to make an incorrect decision, which is why the second poster in the thread warned against any legal advice being given.

information

Hammertime wrote: »

Two things

One
My wife is a Solicitor.

Two
I have just phoned and spoken to IBECs employment law advisors who informed me that if the person was to bring a unfair dismissal claim they would have very strong grounds against you.

Regardless of any difference of opinion, I assume we both agree that the op needs to get direct professional advice before doing anything.

I wasn't having a go at you but such a black and white view without knowledge of the full situation is dangerous and could cause the op to make an incorrect decision, which is why the second poster in the thread warned against any legal advice being given.

A case for Unfair dismissal cannot be brought if you are employed for less than one year.

http://www.citizensinformation.ie/categories/employment/unemployment-and-redundancy/dismissal/unfair_dismissal#rules

scab-e

Cork Boss wrote: »

My question is that if I have to let someone go, does it have to be my latest recruit, or can I let the person I feel is slowing down my business? ...Is the first in first out policy a legally binding one?

I have never heard of an employment 'first in first out' rule and I'd be amazed if it were true.

You need to understand the difference between redundancy and dismissal. You can make someone redundant whenever you want so long as you give them sufficient notice and payments in line with legislation. You need good grounds to dismiss a person and you must follow a fair procedure. Oterwise they can sue you for unfair dismissal. There is some explanation of unfair dismissal here:
http://www.basis.ie/servlet/blobservlet/unfairdismissals_booklet2001.pdf?language=EN

Even if you manage to persude him to leave without being sued, how do you know that you will not have this problem with the next guy into the job? Perhaps the problem was not him but lay somewhere else in your production process.

One of your jobs as manager is to measure the productivity of your staff. You say you can't prove that he is unproductive. is this because you don't understand the process that he is carrying out? Perhaps it requires specialist knowledge and you don't know how much work is really required.

If so, then you can't run a business by trusting your staff to work hard. That's not management. You don't have to understand how he does his work, but you do have to know what he is doing and how long it should take (by benchmarking against outside standards and by prior agreement with the worker himself). When you can do this then you can discover whether he is or is not productive. if you can prove he is repeatedly failiong to meet fair targets agreed with him then you can dismiss him.

Legal issues aside, dismissing people on a whim, a hunch or whatever is destructive of company morale. There is also a moral aspect in that the employee is not a cog but a human being and may be going through a personal problem. Sometimes managers fire staff due to their fear of talking to the employee and working something out.

Bandara

information wrote: »

A case for Unfair dismissal cannot be brought if you are employed for less than one year.

http://www.citizensinformation.ie/categories/employment/unemployment-and-redundancy/dismissal/unfair_dismissal#rules

Where does the poster indicate the person has been working for them less than a year?

information

Hammertime wrote: »

Where does the poster indicate the person has been working for them less than a year?

reread my posts, if you are still having dificulty understanding, ask your wife to explain or maybe make some more calls

Bandara

Not the brightest spark I see

lanod2407

Come on guys - toys back in the pram please!!!

My input - you're potentially on sticky ground if you dismiss without "due process". In my years within the multi-national sector I've seen an increasing requirement to have a strong process to deal with performance. Pick up the local papers and you'll always find a case where an employee successfully brought an unfair dismissal case to court.

- Do you have agreed goals with the employees? All of them, not just the slacker?
- You need to manage the team and review goals with people on a regular basis.
- Where goals are not being met you need to raise the issue with the employee and document, document, document!
- Did I say document everything?
- Go through a process where there's a formal verbal and then written warning to the employee regarding the need to improve performance.
- Proceed to disciplinary process up to and including dismissal.

The process takes time - and you'll find it going one of two ways .... .(a) the employee recovers and puts his shoulder to the wheel, or (b) the performance grinds along, dragging you and the organisation down and you end up either sacking the person or they get the message of the light at the end of the tunnel being a speeding train and they leave of their own volition.

It's incredibly important for small businesses to keep their teams productive and one bad apple certainly spoils the barrel.
Regarding a previous suggestion to join the SFA ............ given the recent call from the head of that organisation to cut the minimum wage by €1 per hour I'd run a mile from such thinking ......... more "Small Minds" than "Small Firms". I won't get into a ranting session (mods have a shoot to kill policy!!;)) but if we cannot pay a person a living wage to do a job then we shouldn't be in business!

Last bit of advice - hire in a local HR specialist who knows the process to giude you through it - well worth the money spent. Typically HR people in large MNC's are extremely uptodate with the legislation and also with high quality processes to manage performance.
There's no guarantee that a case brought to court won't succeed - but it may be worth biting the bullet instead of continuing to see the overall organisation being dragged down.

Best of luck.

Bandara

Hi ianod,

consulting a HR specialist is definitely the way to go. I only suggested the SFA thing as the fee to join is quite small and you get access to legal advice on such matters, I'd agree that a lot of their ramblings in the media are a tad silly.

Interestingly enough (and veering off topic) though I do think there is a argument for the €1 off the minimum wage, imo a lot of people jumped on this as an example of the big bad employers shafting the workers by not paying them enough to be able to live.

I personally feel there is a lot of circumstamces where being able to pay lower than the minimum would create more work opportunities and would give younger people more of a chance of being able to get a job ahead that would otherwise go to a more experienced candidates.

Its a hard one to explain but my thinking is going back to the old 'apprentice' concept. Someone who gets paid less than others as they have not yet the skills or experience to justify being paid the minimum wage (I really want to stress here I'm not in the slightest bit talking about getting away with paying staff less). I just feel there should be a 'training rate' or some such wage band for people up to maybe 22 years old (or extending the JLC age brackets slightly). In reality these younger people are only learning and as they have to be paid the same minimum wage as an adult with years of experience there chances of getting a job are slimmer as I'm picking the more experienced person everytime. Also they are in many cases living at home and do not have the required earnings as an 30 year old with a mortgage etc, again I'm talking out loud here I'm aware there are exceptions to every situation

We need to be looking at ways to get our young people on the ladder and making them more employable by whatever means has to be a good thing, there can of course be clauses put in to ensure that after 1 year at the training level they must be increased to full regulation wages. Even if a small amount of hungry scumbag employers get rid of them once they hit this years service they are still in a better position with the years work on their CV. In reality I'd imagine that if they are still there after the year the employer will be happy to move them to the higher pay grade as they now have a fully capable staff member who has proved themselves.

I can;'t see it ever happening as the public perception would be such a backlash without really understanding the reasoning behind it, that no politician would touch it.

Obviously I'm talking about the jobs most affected by the min wage scenario, retail, food industry etc., which is also the areas where our young people are most under pressure from the influx of experienced adult foreign workers who are far more qualified than your average Irish 20 year old guy/girl.

I'm getting flooded with CV's from Irish and foreign workers for min wage jobs, these are typically aged between 19 and 40, I find myself disregarding the ones under 25 as they are too much of a hassle to train and a risk as they don;t take the job seriously. An incentive to employ these can only be good imo.

Anyone agree?

lanod2407

Points well made - and I reckon we're gonna get knocked for going off topic here!!!!
Is there not already mechanism in place to pay lower than min wage for people in "training"?

information

Hammertime wrote: »

Not the brightest spark I see

I suggest you ring these people seeing as how you go to so much effort based on an internet post, their number is in the book.

WACAIS

Wrong and Can't Admit it Society

WACAIS was founded around the same time as the internet started to grow in popularity. Many people engage in discussions on internet forum and sometime they make sweeping statements that are unfounded. WACAIS helps these people cope when they are proven wrong.

WACAIS works with people at all levels across the spectrum:
LEVEL 1 :: those who just make a simple statement
LEVEL 2 :: those who make a statement, then try and back it up with further information
LEVEL 3 :: those who make a statement, then try and back it up with further information, then insult more learned person who point out their mistake.

Levels 3 people follow a basis pattern, stupidity in making the incorrect statement, desperation in trying to back up the statement, anger when they are proven incorrect which leads to them insulting their betters. We at WACAIS realise that these people are not well and treat them as special cases who need a lot of support and understanding to get over their disability.

blindsider

So although I have plenty of incoming leads and confirmed orders, sales are down from lack of efficiency.

This is (in my opinion) down to an existing employee who is cruising in 2nd gear, we're a small business and can't afford passengers, and his position is a central cog in the production process. It's hard for me to prove his lack of urgency, as he always 'looks busy' but is basically 'faffing around' pretending to be working on necessary designs etc...


Corkboss - it sounds to me like you need some Performance Management.

i) Why are sales down? Who is inefficient? What targets have been set for sales? How do you measure these Key Target Activities? Remember 'What gets measured, gets done.' (This applies to all employees!)

ii) How long should it take him to complete a design? If you say 3 hrs, and he's taking 2 days, then you need to pull him up quickly. Otherwise it becomes contagious.

iii) The rest of the organisation must be accountable also. I suggest that you consider sitting down with ALL employees and agreeing Performance Objectives with each person. Do you know what 'SMART objectives' are? If not, google it. You need to make time for this!!!

iv) Get more info/advice on the whole 'management' thing - do a course. College of Commerce? IMI? Fás?

v) Set 1 hr aside (evening) grab a coffee/beer etc and look at www.businessballs.co.uk - have a good look around the site. Print what you need. Google a bit. Have a look at all the stuff that seems relevant. Develop a plan for your staff/business. Talk it through with someone whose judgement you trust, and who will be straight with you. Refine your plan. Do it!

Best of luck!

antoinolachtnai

The OP really needs to get some good advice tailored to situation, taking into account the realities of his business. There is a lot of subtlety in employment law. In particular, you cannot make people redundant indiscriminately. There are plenty of rules about it, although they shouldn't be too onerous for a small company.

The FIFO thing is an old thing for redundancies which happened in situations where there are strong trade unions. It's not completely irrelevant and done away with, but it is fairly close. It doesn't have that much bearing on your situation, but like I say, you need specialist advice here.

Even if a person doesn't have recourse to the Employment Appeals Tribunal for unfair dismissal, they may well be able to resort to the courts. It doesn't happen terribly often, but it does happen, and it's not much fun.

It could be that the OP has a long term challenge here which goes beyond the regulations. At the end of the day, it's hard to get great employees who work well as a team. The core problem is not sales, but recruiting, managing and motivating these people. It's a hard job to do. Hard decisions have to be made every so often.

One thing you can't do is live in constant fear of ending up before the Tribunal. You must develop things to the stage that you have confidence in your own processes.

Anyway, good luck to the OP in dealing with a hard problem.