When terminating an employee, the dismissal must be valid and justified. If the employee has been with the company for more than two years, they have the right to ask for a written statement of the reasons for dismissal. The employer must provide it within 14 days.
If the employer ends the employment for gross misconduct (a serious violation of workplace conduct), they do not need to give any notice.
If, however, the employer ends the employment for poor performance, misconduct or redundancy, they need to give a notice period, depending on the employee's length of service.
An employee's dismissal may be unfair if the employer doesn't have a good reason for it or if they do not follow the company's formal disciplinary or dismissal process.
Some situations where dismissal is likely to be unfair include:
If an employee believes that they have been dismissed unfairly, they can get help from a third party to mediate the situation, such as a union representative. They may also go to an employment tribunal.
Any employee who has been continuously employed for over two years has rights to Statutory Redundancy Payment (SRP). They also have the right to a written statement setting out the amount of redundancy payment and how the employer calculated it. Redundancy pay is equal to:
The length of service is capped at 20 years, and the weekly pay is capped at £571. The statutory redundancy pay is capped at £17,130.
When an employee resigns, it is good practice to write to the employer giving notice of their resignation and for the employer to acknowledge the resignation in writing. They need to confirm the termination date and any other arrangements, including any money owed to or by the employee.
There are two types of notice periods – statutory notice, which is required by law, and enhanced contractual notice period. Whichever notice period the employer chooses to apply should be provided in the employee's employment contract. When giving notice, the employer must provide whichever notice option is longer.
The statutory notice is calculated as follows:
The notice period based on the employee's contract is at the employer's discretion. A typical notice period is one month for regular employees and up to three months for more senior employees. A right to pay in lieu of notice is also common in contracts.
There's no statutory requirement for severance pay. It is usually negotiated and agreed between the employer and employee before ending the employment with the terms set out in a Settlement Agreement.