EmployeeTerminations in the UK Bettina Bender, Partner, CM Murray LLP Law Society / UKTI: Doing Business in the UK The British Consulate Boston27 July.

EmployeeTerminations in the UK

Bettina Bender, Partner, CM Murray LLP

Law Society / UKTI: Doing Business in the UK

The British Consulate Boston 27 July 2009

The Harvard Club New York 28 July 2009

CM Murray LLP: Specialists in Employment, Partnership and Business Immigration LawCM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

Key Issues to Consider

• English employees benefit from:- – Contractual Rights (Notice)– Statutory Protections

• The ‘at will’ status does not translate well across the Atlantic!

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The Key Statutory Protections

• Unfair Dismissal

• Discrimination (sex, marital status, pregnancy, race, disability, age, sexual orientation, gender re-assignment, religion or belief) – NB: compensation loss-based

• Whistleblowing

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Unfair Dismissal – the one that causes all the problems…

• Applies to employees with > 1 year’s service (exceptions, e.g. trade union membership, pregnancy)

• To dismiss an employer needs – A fair reason; and– A fair procedure

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Fair Reason

• Conduct (e.g. theft, persistent lateness)• Capability (e.g. underperformance)• Redundancy; • Retirement;• A Statutory Restriction; and • Some other Substantial Reason (e.g.

reorganisation)

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Fair Procedure ACAS (Advisory, Conciliation and Arbitration Service)Code of Conduct

The basic steps:-

• Notify the employee of complaint • Investigation into the issues• Meeting; allow witnesses to be called• Written decision and right of appeal• Appeal meeting• Final written decision

NB the employee needs to be told of their right to be accompanied at the meetings

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The Penalties

• If a successful claim is brought and the Employment Tribunal makes a finding of unfair dismissal it can order:-

– Reinstatement

– Re-engagement

– Compensation – this is the usual remedy

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Tribunal Uplift

• A failure to apply such a process (including providing a right of appeal) could result in a 25% increase in compensation if the employee succeeds at Tribunal

• Different Rules apply on retirement or redundancy but again very specific procedural steps must be followed

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Compensation

The Basic and Compensatory Award

• The Basic Award is based on a maximum weekly wage of £350, age and length of service and is currently subject to a maximum of £10,500.

• The Compensatory Award is based on the employee’s loss of earnings resulting from the dismissal, subject in most cases to a maximum limit of currently £66,200 (The employee is under a duty to mitigate their losses, i.e. find another job)

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Do Watch Out

• US employees in Britain usually obtain UK statutory rights despite US/state choice of law clauses

• Importance of procedures/consultation

• Employee/Worker/Self-Employed Consultant

• Employees with less than 1 year’s service claiming discrimination/whistleblowing

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Collective Redundancies

• Large-scale workforce reductions – collective consultation rules apply

• 20 – 99 redundancies – 30 day consultation period

• > 99 redundancies – 90 day consultation period

• Protective award – maximum 90 days pay• Notify the Secretary of State of planned

redundancies

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Minimising Risk

• Plan ahead • Keep a papertrail of warnings, appraisals etc• Options on termination:-

1. Follow process – potentially lengthy, but reduces risk

2. Terminate – high risk but often commercial approach taken

3. Undertake/commence process and then negotiate terms of severance agreement

CM Murray LLP: Specialists in Employment, Partnership and Business Immigration LawCM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

“ There is a way through!”

CM Murray LLP: Specialists in Employment, Partnership and Business Immigration LawCM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

Speaker Details

Bettina Bender, PartnerCM Murray LLP

37th FloorOne Canada Square

Canary WharfLondon E14 5AAUnited Kingdom

CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

If you have any questions, please do not hesitate to contact:

Phone: 00 44 (0)207 718 0090 Email: [email protected]

Website: www.cm-murray.com

CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law