Archived News - October 2009
16 October 2009 - DISMISSAL WITH NOTICE – A GENERAL OVERVIEW
The purpose of this article is to look at the law and to examine some of the problems that can arise.
1. General Position
Save in exceptional circumstances (for example where the employer is entitled to dismiss for gross misconduct such as theft or fraud or violence at work) an employee must be given notice of their dismissal.
Even if however the employee is given the correct period of notice that does not mean the dismissal will be fair or that these are the only monies that an employee is entitled to – for example there may be an additional payment in respect of outstanding holiday.
2. Statutory minimum period of notice/Contractual notice/Reasonable notice
The period of notice an employee is entitled to cannot be any less than the statutory minimum notice.
The statutory minimum notice period applies after an employee has been continuously employed by their employer for one month. At this point they are entitled to one weeks notice. This notice period rises to two weeks after they have been working continuously for their employer for two years. It then rises by a further week for each additional year of continuous employment up to a maximum of twelve weeks (see below).
Length of continuous employment | Employee’s notice entitlement |
1 month up to 2 years | 1 week |
2 years | 2 weeks |
3 years | 3 weeks |
4 years | 4 weeks |
5 years | 5 weeks |
6 years | 6 weeks |
7 years | 7 weeks |
8 years | 8 weeks |
9 years | 9 weeks |
10 years | 10 weeks |
11 years | 11 weeks |
12 years and above | 12 weeks |
If an employee has a contract and their contract provides for a longer period of notice than the statutory minimum then, the employee is entitled to be given the period of notice set out in their contract.
If the employee’s contract is silent or there is no contract then, the employee is entitled to reasonable notice. In most cases that will be the same as the statutory minimum notice period (see above). Whether or not it actually is depends on such matters as the employee’s job title, what they get paid, their length of service and the usual practice in that type of trade or industry. For example if an employer is looking at dismissing a senior manager who has been with them for just under two years and, there is no contractual provision governing their period of notice then, the statutory notice period of one week will not be reasonable – a reasonable period of notice in this case could be anywhere between two to twelve months.
3. Working out notice – "Garden Leave"/Payments in lieu
It may well be that an employer does not want their employee to work out their notice or, alternatively wants them to remain at home during their notice period (“Garden Leave”).
Such clauses can be incorporated within a contract of employment.
If the employer wishes to reserve their right to pay an employee is lieu of notice then, they should provide that it is a matter for the employer’s discretion as to whether or not that power is exercised and, if it is, that any payment will be based only on the employee’s basic salary. If there is a pay in lieu provision then, it is likely to impact on the tax treatment of any notice monies.
4. What if an employee resigns during their notice period?
If an employee who is under notice of dismissal resigns before their notice expires then, their employment will come to an end by reason of their resignation.
This is particularly important in the redundancy context i.e. where the employee has been told that their employment will come to an end by reason of redundancy and they are currently working out their notice period. What it means is that unless the employer agrees to accept a shorter notice period then, the employee will lose their right to a statutory redundancy payment unless they comply with certain statutory provisions.
5. Employees who resign
An employee must give their employer the longer of any contractual or statutory notice period.
The statutory notice period to be given by an employee who has been continuously employed for one month or more is one week. Unlike the statutory notice period which an employer must give to an employee this does not increase with length of service.
An employee may ask to go early. It is a matter for the employer whether or not he agrees to that. If he does then, there is no obligation to pay the balance of any notice monies.
If any employee does resign it is important (insofar as possible) to hold an exit interview because of the possibility that the resignation may expose the employer to a claim for constructive (unfair) dismissal.
If the employee resigns without giving the correct period of notice then, they cannot be forced to work out that notice period. In theory they are in breach of contract entitling the employer to sue for damages/obtain an injunction to prevent the employee from working during the notice period but, such actions are unusual.
6. Dismissing employees who are ill
Dismissing employees who are ill is an area of law that is fraught with difficulty and you should always seek advice before doing so.
An employee who is off ill is still entitled to notice of their dismissal.
Employees who are off ill during their notice period are entitled to be paid at their normal rate of pay – not Statutory Sick Pay. The only exception is where the employee’s contract provides for a notice period that exceeds the statutory minimum notice period by at last one week (see above).
This article does not provide a full statement of the law and readers are advised to take legal advice before taking any action based on the information contained herein. For further information please contact Paul Croker on 01553 692737.
30 October 2009 - Compromise Agreements
Compromise Agreements can be a useful and cost effective method of managing out employees. They are binding agreements which prevent an employee from bringing claims against an employer but need to be used with caution. We recommend that you take legal advice prior to taking any action to negotiate a compromise agreement.
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