The termination of an employee’s employment can happen as the result of a number of different actions: resignation; dismissal or by operation of law.
Someone who resigns effectively gives up their rights as an employee, and as such there are legal safeguards in place to protect employees who feel they have been forced into resigning. This is usually known as a case of constructive dismissal.
In an employee is dismissed, the employer must be able to prove that the dismissal was for a potentially fair reason related to:
- Capability or qualifications, for the job they were employed to do.
- Conduct.
- Retirement.
- Redundancy.
- Illegality – where the employee cannot continue to be employed without breaking the law.
- Some other substantial reason – any other appropriate or reasonable reason which does not fall into one of the above categories.
If none of these reasons apply, then the dismissal may be ruled as unfair.
Else Solicitors can supply advice and support to businesses of all sizes concerning any issues around termination of employment. We would recommend that you speak to one of our employment team before making the decision to dismiss.
Ensuring a fair dismissal
Employers are required to follow a fair and reasonable procedure on dismissal. This is covered in detail in our dedicated section on Grievances and Disciplinaries and Redundancies. Failing to follow a fair and proper procedure can result in an employee taking their case to an Employment Tribunal, complaining that they were unfairly treated and claiming compensation.
Our expert team can work with you to ensure that as an employer you are taking steps to avoid risks of possible claims arising over redundancies or other forms of dismissal.
Termination of fixed term appointments
Fixed term contracts can be a useful way for a company to employ workers, but employers should be mindful of the difficulties of dismissing an employee before the end of a fixed term contract.
Unless the contract contained provision for early termination, an employee could have a valid claim for wrongful dismissal. Damages may have to be paid equal to the money the employee would have earned during the remainder of the contract. If the contract is being terminated at the end of the fixed term, the employer still needs to abide by any notice period stated in the contract.
Limiting liability for Employment Tribunal claims
Else Solicitors offers an insurance policy protecting employers against the cost of Tribunal claims. For more information please see our Else Protect section.
Settlement Agreements
As of 29 July 2013 Compromise Agreements have changed and are now called Settlement Agreements. Discussions can be had, and the employment relationship brought to an end, on a Without Prejudice basis following without prejudice conversations which are not disclosable as part of any subsequent Tribunal proceedings.
A legally-binding settlement agreement between an employer and an employee sets out the terms and conditions around terminating employment or resolving a dispute. Once the settlement agreement is signed, it protects both parties from any subsequent claims and gives certainty. A confidentiality clause and restrictive covenants can also be included.
The use of settlement agreements is becoming increasingly common, particularly in redundancy situations. It is essential that the employee receives independent legal advice, generally paid for by the employer, before signing the agreement.
For more detailed legal advice in relation to termination of employment, please contact the HR and employment team on 01283 526200, alternatively you can send us a message and we will get in touch at a time that suits you.
