Oyster policy is denoted in purple.
There is no concept of “mutual termination” under UK law. However, severance may be paid as compensation for a “settlement agreement.” There are various terms and conditions of such a settlement agreement, and advice from employment counsel should be sought before pursuing a mutual termination or settlement agreement. Processes and procedures regarding termination of employment and employee disciplinary procedures must be put in writing by the employer. Terminations must be fair and reasonable, and there should be a process that is followed to ensure it.
Fair vs unfair dismissal
Fair dismissals are the only legally allowable kind of dismissal. They are backed by valid reasons as well as a reasonable action.
Valid reasons can include:
- The employee’s capability to perform the job duties;
- Their conduct;
- Other reasons that prevent employees from legally being able to do their job (i.e. lack of license or certification when required).
Reasonable action includes:
- Following any relevant procedures;
- Completing necessary investigations;
- Genuinely believing in the reason provided for dismissal;
- Informing the employee of their potential dismissal and listening to their response;
- Giving the employee the chance to appeal and allowing them to be accompanied at any disciplinary hearings;
- Considering whether the employee understands the consequences of their behavior (if a behavior-related dismissal).
Unfair dismissals are backed by invalid, untrue, or irrelevant reasons. They also could be lacking in appropriate, reasonable action even if for a fair reason. Certain reasons are de facto unfair. These include:
- Membership in a trade union;
- Representation of a trade union.
Unfair dismissals can be brought before employment tribunals. Following the written process when considering termination is essential to ensure fair dismissal.
Other terms can be found in the section on restrictive covenants.
Best in Class