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

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

1 EmployeeTerminations in the UK Bettina Bender, Partner, CM Murray LLP Law Society / UKTI: Doing Business in the UK The British Consulate Boston27 July 2009 The Harvard Club New York 28 July 2009 CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

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3 Key Issues to Consider English employees benefit from:- –Contractual Rights (Notice) –Statutory Protections The ‘at will’ status does not translate well across the Atlantic! CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

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

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

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

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

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

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

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

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

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

13 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 Law

14 “ There is a way through!” CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

15 Speaker Details Bettina Bender, Partner CM Murray LLP 37 th Floor One Canada Square Canary Wharf London E14 5AA United Kingdom CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law If you have any questions, please do not hesitate to contact: Phone: (0) Website: CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law


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