Michelle is a skilled employment lawyer, with over twelve years’ experience in advising clients on a broad range of non-contentious and contentious employment law mattersChristmas just so happens to be one of the busiest times of the year for employment lawyers. It is a time when many of us will be thinking over what has happened this year and what we would like to happen next year. Many employers will be musing over that very same sentiment and this can often trigger personnel changes. Whether due to a business restructuring completing at the end of the year, or an employer’s determination to shake things up, the fact is that many employees find themselves unexpectedly unemployed around Christmas time.
So, what should you do if you get an unexpected call from Human Resources inviting you to a meeting late one Friday afternoon to discuss your “future employment”?
If your employer wants to speak with you on a “without prejudice” basis, this means they want the conversation to be “off the record”. If your employer broaches the subject of a without prejudice discussion with you, then the hard fact is that your employer is likely to want to terminate your employment on the basis of a financial settlement.
You may find the prospect of such a meeting daunting and stressful. However, there are some steps that you can take in this situation, to help you feel more in control and prepared for such a meeting:
- Know your contractual entitlements. You should locate your employment contract and review its terms. Your employment contract will be the point of reference in determining what you are entitled to in the event of the termination of your employment. In particular, make a note of:
a) Your notice period;
b) Your benefits, including any share options;
c) Any applicable restrictive covenants. These are clauses which will limit what you can do following the termination of your employment and may affect your future employment prospects;
d) Whether your employment contract contains a payment in lieu of notice clause, which enables your employer to pay you a lump sum instead of requiring you to work out your notice. If it does not, there may be advantageous tax and National Insurance consequences.
e) Whether your employment contract contains a right for your employer to place you on garden leave, to force you to stay at home during your notice period. If there is no garden leave clause but your employer wants to place you on garden leave, you may be able to use this to your advantage.
- Find a good solicitor. Taking initial advice before the meeting with your employer will help you to understand your rights and think about what you want to achieve. Bear in mind that, whilst more junior lawyers will have a cheaper hourly rate, they are also less experienced and are still training, so this may be a false economy. Once you have identified a solicitor, I would recommend checking their firm website profile and LinkedIn profile, to give you a better understanding of their background and whether they are the right fit for you. I would also recommend that you speak with that solicitor before instructing them, to ensure they understand what you want to achieve and can support you to achieve this. Many reputable solicitors will be prepared to have a short, initial, complimentary discussion with you.
- Be prepared. Ask yourself, what would I do if I knew my employment was going to end tomorrow? Would you want to have an opportunity to clear your personal possessions? Have you stored personal documents on your work laptop? Are there certain tasks you need to complete? Are you undergoing any private medical treatment under your employer’s private medical scheme, which you need to complete? It is very unusual for an employee’s employment to be terminated immediately at the first meeting, but you may be placed on garden leave or simply asked to stay at home while you consider any offer made by your employer.
- Sit and listen. In my experience, other than expressing your disappointment and sadness about the situation you find yourself in, it is usually best to simply sit and listen to what your employer has to say at the first meeting. Your employer may provide you with a “settlement agreement,” which sets out your employer’s financial proposals in return for you agreeing not to take action against your employer. You will need to obtain legal advice on a settlement agreement in order for it to be binding, but an employer will usually make a contribution to your legal fees to assist you with this.
My advice is usually then to say that there is a lot to think about and that you will need time to consider it. Certainly, it is usually best not to make any decisions at this meeting. If you have already taken legal advice, my advice is usually not to mention this to your employer at this stage, as it may make the situation more acrimonious.
- Talk to your solicitor. From this point onwards, your solicitor should be able to advise you on any potential claims you may have against your employer and your prospects of success. Moreover, they should be able to set out a clear strategy to help you achieve your aims. Key things to think about include:
a) Whether you wish to settle on an amicable basis, or whether you want to escalate matters, potentially to litigation. In some situations, I find it can be more amicable and lead to a higher financial settlement, if the employee deals directly with their employer, but is assisted behind the scenes by a solicitor. Employers can often be more sympathetic to individuals sat before them than they can when receiving a letter from a solicitor.
b) What level of financial settlement do you need to protect you until you find another job? You will therefore need to think about how long it is likely for you to find another job. Your restrictive covenants may impact on this.
c) Whether you would like to be able to leave as soon as possible, or whether you would like to stay with your employer for as long as possible?
d) Whether you need a reference or whether you would like to agree an internal announcement?
e) For regulated employees, you need to think about whether the termination of your employment will impact on your membership of any particular profession or regulated industry.
- Manage your legal costs. It can be expensive to obtain legal advice, but in an ideal situation your solicitor will seek to manage your case so that their legal fees are outweighed by any increase in financial settlement which they are able to achieve for you. To help minimise your costs, bear in mind the following:
a) Your solicitor may charge you each time they perform any work on your file. This includes all phone calls and emails with you. Aim therefore, to keep your correspondence as clear and concise as possible. Solicitors are not a very cheap form of counselling.
b) Try and agree a fixed fee with your solicitor. For example, that an initial call, the solicitor’s review of your settlement agreement and a follow up call to discuss the settlement agreement, will not cost you more than the level of your employer’s contribution.
c) If negotiations are protracted, ask your solicitor whether you can seek an increased contribution to your legal fees from your employer.
d) It can be more tax efficient for your employer to pay your legal fees direct to your solicitor and to deduct this from your settlement monies.
By taking the steps outlined above, you can feel more in control of what is happening to you and can start to plan for the future too. In most cases, I find that, once the initial shock has subsided and the employee is well-supported by their solicitor, they can also look forward to a better future.
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