Know your rights // Termination of employment: key issues for employers

In this article, we will take a closer look at some of the matters employers need to consider when employment is (or is) coming to an end. Even if you don’t have to hire employees yet, you should know what it means when you need to restructure, transfer or simply fire an employee.

This ties in well with our last article which focused on fundamental rights enjoyed by all staff in the UK.

Termination of Employment // notice periods

All employees are subject to a statutory minimum notice period.

If dismissed by the employer, an employee who has been continuously employed for more than one month but less than two years is entitled to one week’s notice. After two years of service, an employee is entitled to an additional week’s notice for each full year of service, up to a maximum of 12 weeks. If the employee resigns, the statutory minimum notice period is one week, which applies throughout their employment.

Employment contracts often have notice periods that go beyond the legal minimum, in which case the longer contract period applies.

An employee can be terminated without notice (without notice) if there is a violation of the employment contract that would justify it, e.g. B. gross negligence.

Unfair Termination

In most cases, workers need at least two years of uninterrupted employment to gain protection against dismissal. But even if they don’t meet this minimum service requirement, in certain situations an employee can still request a wrongful dismissal (known as “automatic wrongful dismissal”).

An employee with at least two years’ service can only be fairly terminated for a potentially valid reason related to either:

  • Capability
  • behavior
  • redundancy
  • Violation of a statutory order (must mean factual illegality)
  • Another essential reason.

To avoid liability for unfair dismissal, employers must also use common sense in determining whether the reason in question is sufficient to justify a dismissal. This almost certainly means that a fair process is followed before the decision to release is made.

redundancy

An employee is terminated when he is dismissed by his employer wholly or principally for reducing or ceasing the work he is doing. This may include business closures, site closures or downsizing.

redundancy process

Employers must follow a fair and reasonable dismissal process that includes:

  • make a logical assessment of which roles are threatened by redundancy
  • Application of an objective method to select employees threatened with dismissal
  • Advising employees on the planned layoff
  • Consider whether there are alternatives to dismissal (e.g. alternative roles).

If you intend to make more than 20 layoffs in 90 days, you will need to conduct extensive mass layoff interviews. This is in addition to the individual advice given to employees.

claims for dismissal

Employees with two or more years of uninterrupted tenure are entitled to a statutory redundancy pay (SRP) calculated using a statutory formula based on their age, salary and tenure.

TUPE

The Transfer of Undertaking (Protection of Employment) Regulations 2006 (TUPE) protect workers affected by a transfer of business or a change in the provision of services. It automatically transfers the employment contracts of all employees assigned to any part of the company to be sold or the outsourced function to the acquirer (who will be the buyer of the company or the new provider of the outsourced company). Services.)

This is a complex area of ​​law and we recommend that you seek legal advice in these situations.

Post-Termination Restrictions

Employees have certain implicit duties to protect their employer’s interests during the employment relationship. Often these tacit obligations are complemented by specific contractual obligations. This could include, for example, clearly defined confidentiality obligations and/or obligations for employees not to pursue outside interests that could potentially harm business interests.

Employers also have the right to protect their legitimate business interests by appropriately restricting the post-employment activities of former employees in certain limited areas. Legitimate business interests may include confidential information, trade secrets, customer ties and/or staff stability. Typical post-termination restrictions include restrictions requiring former (usually key) employees not to solicit or do business with clients; poacher staff; or in some cases compete with their former employer’s company for a period of time.

The courts will only enforce a restrictive post-employment agreement if the employer seeking to invoke it can show that it protects one or more of their legitimate business interests and its scope and/or duration does not exceed what is reasonably necessary at the time Protection is required these interests.

Whether an agreement goes no further than is reasonably necessary is an inherently fact-specific analysis. Consequently, they should be drafted as precisely and narrowly as possible to maximize potential enforcement. Employers in the UK are not currently required to make payments to a former employee in exchange for being bound by such restrictions at the start of employment.

General

Whilst we are referring to the United Kingdom in this article, the law in the United Kingdom can often vary between the four nations, particularly when it comes to property, employment or business. When we say Great Britain we are generally setting the position for England and Wales. If you are dealing specifically with matters in Scotland or Northern Ireland, simply let us know and we can discuss this with you in more detail.

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