Employee Termination in the UK
Termination of Employment:
When an employer decides to terminate an employee’s contract in the United Kingdom, it is imperative that the dismissal is valid and justified. If the employee has completed more than two years of service with the company, they possess the right to request a written statement detailing the reasons for their dismissal. The employer is legally obligated to provide this statement within 14 days.
If the employer terminates employment due to gross misconduct, which entails a serious violation of workplace conduct, no notice is required.
However, in cases of termination for reasons such as poor performance, misconduct, or redundancy, the employer must adhere to a notice period, which varies depending on the employee’s length of service.
Unfair Dismissal in the United Kingdom:
Employee protection is of utmost importance when it comes to dismissal. An employee’s dismissal can be considered unfair if the employer lacks a valid reason for the action or fails to follow the company’s formal disciplinary or dismissal procedures.
Instances where dismissal is likely to be deemed unfair include situations like:
- Following a request for flexible working
- Refusing to grant working time rights
- Properly resigning and adhering to the correct notice period
- Joining a trade union
- Applying for or being on maternity, paternity, or adoption leave
- Exposing workplace misconduct or wrongdoing
- Being compelled to retire
- If an employee believes they have been unfairly dismissed, they have the option to seek mediation from a third party, such as a union representative. They can also escalate the matter to an employment tribunal.
Redundancy Pay & Entitlement:
Employees in the United Kingdom who have continuously worked for over two years are entitled to a Statutory Redundancy Payment (SRP). They also have the right to receive a written statement outlining the amount of redundancy payment and the calculation method used. The SRP is determined as follows:
- Half a week’s pay for each full year of employment when the employee was 22 years of age or younger
- One week’s pay for each full year of employment when the employee was between 22 and 41 years of age
- One and a half week’s pay for each full year of employment when the employee was 41 years of age or older
- The maximum years of service considered are 20, with a weekly pay cap at £643 and a statutory redundancy pay cap at £19,290.
When an employee decides to resign, it is advisable for them to submit a written notice of their resignation to the employer. The employer should acknowledge the resignation in writing, confirming the termination date and any other arrangements, including financial matters between the parties.
Other End of Employment Guidelines:
There are two types of notice periods in the United Kingdom: statutory notice, required by law, and an enhanced contractual notice period. The notice period applied by the employer should be specified in the employee’s contract, with the longer of the two notice options prevailing.
- Statutory notice for employees with less than two years of service: one week’s notice
- Statutory notice for employees with more than two years but less than 12 years of service: one week’s notice for each year of employment
- Statutory notice for employees with more than 12 years of service: 12 weeks’ notice
Contractual notice periods are at the discretion of the employer. Commonly, regular employees have a one-month notice period, while senior employees may have up to three months. Contracts often include a provision for pay in lieu of notice.
In the United Kingdom, there is no statutory requirement for severance pay. Typically, severance arrangements are subject to negotiation and agreement between the employer and employee, with the terms outlined in a Settlement Agreement.