Ending the Employment Relationship – Getting it right

DSM Legal Solicitors is urging businesses in Warrington and Cheshire to review their policies and procedures to ensure that they do not fall foul of employment law when dismissing employees.

The law states that a full and fair procedure must be followed when dealing with a grievance or disciplinary matter and the same applies in redundancy situations. Employees must be selected for redundancy in a fair way and it is crucial that a fair procedure is followed.

This includes careful consideration of selection criteria, the pool of employees and scoring.

The ACAS website www.acas.org.uk contains some useful information and guidance when dealing with redundancy, grievances or disciplinary matters or when considering dismissal.

The ACAS Code of Practice in particular provides guidance on disciplinary and grievance procedures by setting out the minimum process which an employer should follow.

Diane Massey of DSM Legal says: – “If it becomes necessary to terminate an employee’s contract of employment, perhaps because of redundancy or for other reason, it is well worth considering offering them a Settlement Agreement, regardless of how long they have been employed by the Company.

Whilst an employee must have been employed for two years to be eligible to bring an unfair dismissal claim, there are many other claims that they can bring that do not require them to have a

minimum length of service, such as breach of contract or discrimination claims.”

What is a Settlement Agreement?

A settlement agreement is a legal document by which an employee agrees to give up their employment rights in exchange for a lump sum compensation payment from the employer. The settlement agreement will also include a confidentiality clause and requires that the employee withdraws any grievance or complaint, as well as agreeing not to bring any claims in the future.

Why offer a Settlement Agreement?

A properly drafted legally binding settlement agreement can save the Company the time and expense of following formal procedures provided both parties agree. They can be a solution where an employee has been off sick for a considerable period of time and it has become apparent that they are no longer able to do the job.

A settlement agreement is the most effective means of ensuring that a claim will not be brought against the Company or its officers in the future.


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