WHEN Kelvin MacKenzie, former editor of The Sun, found the newspaper’s astrologer had been recycling his predictions, he sacked him with a letter that began: “As you will no doubt have foreseen...”

Not surprisingly, this brutal approach to firing staff is not recommended by the Chartered Institute of Personnel and Development. Nor is sacking people by text message, used notoriously last year by Accident Group, a personal-injury claims firm.

“Letting people go” is a tricky and unpleasant business at the best of times, but if you don’t get it right you could find yourself at an employment tribunal facing a charge of unfair dismissal. And if the employee argues successfully that the dismissal was discriminatory on the grounds of sex, race, disability or religion, your company could face an unlimited claim for compensation.

You also run the risk of a disgruntled former employee sabotaging your company, stealing secrets or damaging property. Then there is the effect on the morale of staff who have survived the chop.

Jenny Partridge, director of JMP Associates, a humanresources consultancy, said: “Chief executives often think they should be allowed to do what they want. But when it comes to getting rid of people, they can’t. Workers have rights.”

So under what circumstances can you fire someone? Employment law states that you can sack someone fairly only if they have become redundant, have shown themselves to be incapable of doing the job properly, are guilty of gross misconduct, or have done something else substantially wrong.

In other words, you have to show that you have acted reasonably and that you followed the right procedures. For example, redundancy is a specific term meaning that an employee’s role has ceased. A company cannot make a person redundant and then employ someone else to fill the same role.

There are also rules governing how redundancy should be handled. For example, companies planning to make between 20 and 99 people redundant have to give 30 days’ notice to the Department of Trade and Industry. If 100 or more employees face redundancy, the notice period is 90 days.

Staff also have to be consulted about the company’s reasons for the redundancies and the selection criteria it has used. Not only that, but a company has to explore ways to avoid the redundancies. If they can’t be avoided, the firm has to see if staff could be found jobs elsewhere in the organisation. Even then, employees have the right to appeal and make a claim for unfair dismissal if they think the selection criteria have been too subjective.

Given the complexity of the law on redundancy, it is no wonder that many companies seek to circumvent it by using compromise agreements. In effect, staff waive their statutory rights in return for a better pay-off. Once they have completed at least two years’ employment, staff are entitled to a statutory tax-free redundancy payment of £7,800. In practice, they usually receive more than this in return for their acquiescence in the process.

If redundancy is not the issue and you simply want to get rid of people because they are not up to the job, the ease with which you can do it depends on how well you have prepared the ground. Partridge said: “Probationary periods are very useful for getting rid of staff who don’t come up to scratch. As soon as a problem arises you should let the employee know why you are unhappy.”

Rebecca Clake, adviser with the Chartered Institute of Personnel and Development, said: “You need to have a disciplinary procedure in place involving verbal or written warnings. If someone isn’t performing, there could be genuine reasons. Do they really know what’s expected of them? Managers should remember that the aim of any disciplinary process is improvement — dismissal should be a last resort.”

But the bottom line is, the better your appraisal and disciplinary procedures, the less likely it is that an employee will be able to make a successful claim for unfair dismissal.