Answer ... In order to lawfully terminate an employment contract, the employer must:
- comply with the applicable provisions of the employment contract that relate to the termination of employment, including giving sufficient notice (see question 5.2). A failure to comply with these requirements will give rise to a claim for wrongful dismissal (which is a breach of contract claim). However, a valid reason is not required in order to avoid a claim for wrongful dismissal;
- not unlawfully discriminate against the employee in relation to the dismissal – see questions 1.1 and 4.1 for further information about unlawful discrimination; and
- have a fair reason and follow a fair process before dismissing any employee with two years’ service in order to avoid a claim for unfair dismissal. There are five potentially fair reasons for dismissing an employee: conduct, capability, redundancy, statutory restriction or some other substantial reason. What constitutes a fair process will depend on the circumstances and the reason for the dismissal, but will usually involve one or more formal meetings with the employee. In addition, employees with two years’ service have the right to request a written statement setting out the reasons for their dismissal.
Accordingly, terminating an employment contract without giving a valid reason will not be wrongful, but is likely to result in the dismissal being found to be unfair and potentially even discriminatory.
Answer ... Yes. The usual position is that a contractual written notice period is set out in the employment contract. However, if this is not the case, the law imposes a statutory obligation on the employer to give an employee a minimum period of notice. If an employee’s contractual notice is longer than the statutory minimum, the contractual notice period will prevail.
Statutory minimum notice depends on the employee’s length of service: if the employee has been employed for more than one month, but less than two years, he or she is entitled to at least one week’s notice. After that, minimum statutory notice is one week per year of service up to a maximum of 12 weeks.
Answer ... Although the specific process that must be followed to fairly dismiss an employee varies depending on the reason for the dismissal, employees are typically afforded the right to be accompanied to formal hearings by a colleague or trade union representative and the right to appeal any decision to dismiss them. These rights are enshrined in the Advisory, Conciliation and Arbitration Service Code of Practice, which applies to conduct and performance-related dismissals. If an employer fails to comply with the code, the employee’s compensation on a finding of unfair dismissal could be uplifted by up to 25%.
Answer ... In addition to receiving notice or a payment in lieu of notice, employees who are made redundant are entitled to a statutory redundancy payment, provided that they have worked for their employer for at least two years. This is worked out according to a statutory formula which is subject to a cap and takes into account the employee’s age, length of service and pay. The maximum statutory redundancy payment from 6 April 2019 until 5 April 2020 is £15,750. A number of employers offer enhanced redundancy payments. There are many variations, but one example would be by lifting the cap on weekly pay.