Doing business in the UK: ending the employment relationship

Termination of the employment relationship in the UK works differently from terminations in the United States. Except in certain cases of collective redundancies, or as provided for in an employment contract or collective agreement, unlike the situation in the UK, US law does not impose a formal “notice period” for terminating a relationship individual work. Most US employees are employed “at will,” and either party can terminate the employment relationship without notice. This article highlights the differences between ending an employment relationship in the UK and the US.

Use “at will”

Under US federal law, there are no minimum requirements for an employment contract. Also, in most states, the terms do not need to be in writing. An employment relationship in the United States is presumed to be “at will”, that is, terminable by either party, with or without cause or notice.

Whether the employment relationship is “at will” or under a written employment contract, the parties are free to negotiate and set the terms and conditions of their relationship. That is as long as none of the provisions violates any federal, state, or local law, or rules or regulations governing the employment relationship – for example, the wage practices established in the Fair Labor Standards Act.

In the UK, the employment relationship is governed by a mixture of common law and statute. The common law aspect concerns what the parties have agreed upon as a matter of contract, as well as the case law that has developed in the field. Employee statutory rights are extensive, including the right not to be unfairly dismissed (for employees with at least two years of service) and the right not to be discriminated against on prescribed grounds. Many statutory rights derive from EU law. Therefore, UK employment law relies more on written contracts which set out the terms under which a UK employee’s contract can be terminated.

A fair dismissal

In the United States, no declaration is necessary upon termination of employment, except that in certain mass terminations in certain states, notification to local authorities may be required.

In the UK, the written statement of the main terms and conditions of employment must contain notice periods for termination by both employer and employee. Otherwise, he must refer the employee either to the law or to the provisions of any collective agreement directly affecting the conditions of employment reasonably accessible to the employee.

Employees with continuous employment at least one month, but less than two years, are entitled to at least one week’s notice from the employer. Employees with two or more years of continuous employment are entitled to one week’s notice for each completed year, up to a maximum of 12 weeks’ notice. The parties may agree to longer notice periods.

When dismissing an employee in the UK, the employer must consider both the employee’s contractual rights and their statutory rights. In most cases, honoring contractual rights means giving the correct notice or paying the correct notice amounts. Normally, employers should follow the procedures set out in their policies (usually non-contractual) and/or the recommendations set out in the law. Acas Code of Practice on Disciplinary and Grievance Procedures, where applicable, to ensure that any dismissal is not unfair. It should be noted that every employer in the UK is required by law to have a disciplinary policy in place.

The five legal legitimate reasons for dismissing an employee in the UK are:

  • aptitude;
  • conduct;
  • redundancy;
  • illegality; and
  • another material reason (for example, dismissal due to a fundamental breach of trust).

The right not to be unfairly dismissed is the main legal right to be aware of when dismissing; it only applies to employees with at least two years of seniority, except if the dismissal does not require a training period (for example, for the alert). However, workers are also protected against discriminatory dismissal from day one, without the need for qualifying service.

Employees with two years of service can also claim unfair dismissal if they believe they were forced to resign, with or without notice (known as constructive dismissal). There are many reasons that could lead to this, but some examples would be because they are not being paid or because they have an unsafe work environment.

Essentially, to sue for constructive dismissal, an employee would have to demonstrate that their working life has been made so difficult by their employer, often by the acts or failures of their co-workers, that they have no other choice. than resign.

The length of service

As noted above, employees will generally need two years of continuous service to file a wrongful termination claim; however, just to keep you on your toes, there are exceptions.

Day 1 rights – automatic unfair dismissal

“But they don’t have two years of service, so it doesn’t matter.” If a UK employee has not yet accrued two years of service, it is a common misconception that they will not have accrued unfair dismissal protection. However, in certain circumstances, two years of service is not required and a dismissal may be considered automatically unfair. It is therefore extremely important to be aware of what constitutes “automatic wrongful dismissal”.

Although this list is not exhaustive, UK employees could claim automatic unfair dismissal if terminated for any of the following reasons:

  • pregnancy, including all maternity-related reasons;
  • take or seek to take leave for family reasons;
  • remuneration and working hours, including Working Time Regulations, Annual Leave and National Minimum Wage;
  • act as a staff representative;
  • act as a union representative;
  • act as a trustee of an occupational pension scheme;
  • whether or not to join a trade union;
  • engage in protected industrial action;
  • assert a legal right;
  • jury service;
  • make a protected disclosure (i.e. report);
  • take measures at work for health and safety reasons.

In addition to this, it is even more important to know that if an employee is made redundant for any reason relating to a protected characteristic as set out in the UK Equality Act 2010 (e.g. age, disability, race, religion, gender or orientation), then not only would this be automatically unfair dismissal, but it would also constitute a separate discrimination claim. Unlike unfair dismissal claims, if a discrimination claim is successful, the amount of compensation is not subject to any legal cap.

Final Thoughts

It is recommended that the starting point for any UK employer is to ensure that a clear and easy to digest set of basic (and legally required) HR policies are in place. As stated above, this should include a disciplinary policy, which will be a good starting point for any employer needing to end an employment relationship fairly.

Comments are closed.