UK Law and Practice Contributed by: Phil Linnard, Philippa O’Malley, David Rintoul and Clare Fletcher, Slaughter and May
7.2 Notice Periods All employees are entitled to receive notice of ter - mination, with the exception of an employee com - mitting a repudiatory breach of contract that justifies a summary dismissal (see 8.1 Wrongful Dismissal ). The notice period is usually specified by the con - tract, although there is a statutory minimum that is implied in the event that no greater express provision is made. The statutory minimum notice required from the employer is one week’s notice for each complete year or service, up to a maximum of 12 weeks. The statutory minimum notice from the employee is one week, provided that they have been employed for at least one month. There is no general right to severance on top of notice, other than in a redundancy scenario (where employees may have a right to SRP and potentially an enhanced redundancy payment from their employer). Employ - ment contracts frequently provide employers with the right to make a payment in lieu of an employee’s notice period (PILON), or to place the employee on “garden leave” for the duration of their notice period. There would also typically be provision made in bonus and share scheme documentation about the employee’s rights on termination (although there may also be dis - cretion for different treatment in some circumstances). In some termination situations, the parties agree to a severance package, typically in exchange for a waiv - er of claims from the employee (see 7.4 Termination Agreements ). 7.3 Dismissal for (Serious) Cause There is no statutory definition of summary dismissal in UK law. The employment contract would usually outline a number of situations in which the employer would be entitled to summarily dismiss the employee without notice, which may include: • gross misconduct; • conviction of a criminal offence; • bankruptcy; and • loss of right to work in their role/in the UK. “Gross misconduct” is also not specifically defined, but would typically involve serious or persistent diso - bedience or breach of the employee’s duties, often
Collective Redundancies A specific collective redundancies regime applies where an employer proposes to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less. The ERB will introduce a new threshold to trigger collective redundancy, where an employer is proposing to dismiss as redundant within a period of 90 days or less at least “the thresh - old number of employees” across multiple establish - ments. Regulations will define this threshold, but such threshold cannot be lower than 20. “Redundant” for these purposes means that the dis - missal is for a reason not related to the individual concerned. It would therefore not only catch more traditional redundancies, where there is a workplace closure or diminished need for employees, but also other types of dismissal, most importantly in the con - text of restructurings to effect a change in terms or job functions (including “fire and rehire”). Where the regime applies, the employer must consult collectively with elected employee representatives about the dismissals. Consultation must commence in good time before any redundancies are confirmed, and dismissals should not take effect until the expiry of a minimum period following the start of consulta - tion: • 30 days – if between 20 and 99 dismissals are proposed; or • 45 days – where 100 or more redundancies are proposed. Failure to comply with the obligations to collec - tively consult in a redundancy situation may result in compensation being payable of up to 90 days’ full uncapped pay per affected employee. The ERB increases this level of compensation to 180 days’ full uncapped pay per affected employee. In addition, employers must notify the Secretary of State of the proposed dismissals. The notification must be made in a prescribed format (Form HR1), and it must be made within the 30- or 45-day timescales set out in the foregoing. Failure to comply with this obligation is a criminal offence that attracts an unlim - ited fine (although prosecutions are rare in practice).
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