Q&As

What legal issues should an employer consider before terminating an employee's employment?

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Published on LexisPSL on 28/02/2017

The following Employment Q&A provides comprehensive and up to date legal information covering:

  • What legal issues should an employer consider before terminating an employee's employment?
  • Notice and other contractual entitlements
  • Unfair dismissal
  • Redundancy
  • Discrimination and prohibited conduct
  • Other relevant issues

In most cases, once an employer has decided that he no longer wants to retain a particular employee, he will want to dismiss him as soon as possible. Before taking that step, however, the employer should first consider:

  1. what needs to be done in order to minimise the risk of contractual and/or statutory claims, and

  2. what is consistent with good employment practice

In summary, the employer should consider:

  1. the reason for dismissal, and the risk of an unfair dismissal claim if a fair process is not followed

  2. the provisions of the employment contract, including the right to notice and whether there is a payment in lieu of notice (PILON) clause

  3. the protections the employee may enjoy against discrimination or other prohibited conduct under the Equality Act 2010 (EqA 2010), relating to any protected characteristic

  4. other relevant statutory entitlements, such as the minimum period of notice and the right to a written statement of reasons for dismissal

  5. whether any regulatory requirements apply, eg Prudential Sourcebook for Investment Firms (IFPRU) Remuneration Code provisions relating to termination payments in the financial sector

  6. other relevant issues, eg references, announcements, whether the employee is a director, rights under bonus, commission or employee share schemes

  7. the need to protect business interests

  8. whether there are potential claims that could, and should, be settled

The employer will need to make sure all relevant information

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