Ending an employment relationship | EEF

After the love has gone: How to end an employment relationship

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Breaking up is hard to do - especially when it comes to terminating an employment contract. As Valentine’s Day roses start to spoil and the champagne goes flat, it may be time to consider a permanent separation from certain recruits. Lucy Atherton explains some of the common ways of breaking-up, as well some of the associated legal issues that require careful thought.

Conscious uncoupling

Those looking for an amicable and drama-free separation should look no further than the example set by Gwyneth Paltrow and Chris Martin last year. This celebrity break-up proves that uncoupling doesn’t have to be painful. If both parties agree that the employment relationship should come to an end, then a contract can be terminated by mutual agreement. But as many other celebrity divorce cases demonstrate, your employee may look for a financial reward in exchange for their agreement.

‘Til X do us part?

Commitments made in the workplace should be treated with respect. When an employee commits in the form of a fixed-term contract then an employer should be careful when deciding to end the relationship before the pre-agreed date. If the contract spells out a procedure for early termination then it should be honoured precisely as written. If there are no such clauses allowing for early termination (and in the absence of gross misconduct by the employee) then any early separation would amount to wrongful dismissal. Additionally, if the contract spans more than two years, then employees are protected by ‘long-term relationship’ employment legislation – if so they may have a claim for unfair dismissal too if they are dismissed before the end of the fixed term.

Don’t crush young spirits

Apprentices can be a great addition to any workplace, bringing value in multiple ways. However, terminating an apprenticeship before completion of the training can be complex. There are two forms of apprenticeship and whilst the apprentice is an employee under each arrangement the implications for employers when it comes to terminating them early differ. Ending a ‘traditional’ contract of apprenticeship early is permitted only under certain limited circumstances. Normally, it is only acceptable in cases of gross misconduct, in the event of serious incapacitation, or where business circumstances fundamentally change. If you breach a contract of apprenticeship and dismiss an apprentice early, then be prepared for a large damages bill.

Ending a ‘traditional’ contract of apprenticeship early is permitted only under certain limited circumstances.

Apprentices engaged under the more modern apprenticeship agreements can be treated by their employer in the same way as ordinary employees and do not benefit from enhanced rights on early termination.

Don’t get caught up in the heat of the moment

When an employee resigns it’s usually good to accept the decision nobly. However, sometimes it’s necessary to make sure that employee actually means what they say. Real life isn’t like the movies. If an employee gives a particularly ‘Hollywood’ resignation speech, or you know that they are under significant emotional stress, or if you have any reason at all to doubt the sincerity of their resignation - it’s a good idea to give them some time to cool-off before checking their intentions are true.

We need to talk

It’s long been the case that employers cannot regard 65 as the "safe" age at which to retire employees and staff-members who are approaching retirement are entitled to set their own leaving date. An employee who feels forced into an early retirement may have grounds to bring a charge of unfair dismissal and age discrimination against their employer. It is important to promote open discussion about short, medium and long-term plans and workforce planning - not just with older employees, but with the workforce as a whole. For example, you might want to build such discussions into the appraisal system and conduct them at least annually.

It’s not me ... it’s you!

Dismissing an employee is one of the uglier ways of terminating an employment contract. It must be done properly - following a fair procedure and acting reasonably - if you want to limit legal repercussions. You also need to clearly explain the reasoning behind your decision to dismiss. Employees with two years or more service are entitled to ask for a written statement - giving reasons for their dismissal. And employees who are dismissed while pregnant, or on maternity or adoption leave are entitled to this without having to ask regardless of their length of service. To protect yourself, it is normally good to explain your decision clearly to all employees, making sure to avoid any reasoning that could be seen as discriminatory.

Get support through your break-up

EEF's employment experts run training courses and provide HR and employment business consulting services specifically geared to addressing terminations.


Legal Compliance Lead

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