It is usual for employers to insert clauses (especially into senior employees’ contracts) which seek to restrict their conduct post-termination. It is also, however, becoming more and more common for employers to put these into the contracts of junior employees. But what are they?
The types of post termination restrictive covenants which you may find in your employment contract are:
- Non- Competition Clause – This seeks to prevent you from working for a competitor in a similar role to the one you previously held, and also prevents you from setting up a competing business.
- Non-Solicitation Clause – This imposes a duty not to approach your ex-employers customers or prospective customers. Usually, this is with specific reference to those customers you had direct dealing with for the 12 month period prior to your termination date.
- Non-Dealing Clause – This is more onerous than a non-solicitation clause in that it prevents you from dealing with your ex-employers customers whether you encourage them or not. So if they approach you, the restriction would bite in the same way as it would by you soliciting them.
- Non-Poaching Clause – This aims to prevent you from taking key employees with you to your new employment or business
In order to be enforceable, the restrictive covenants will need to prevent you from one of the above activities for a set period of time after termination of your employment (usually 6, but sometimes 3 or 12 months). (more…)
What are Performance Improvement Plans?
Performance Improvement Plans (also commonly referred to as “PIP’s”) are used by employers as a means of tackling poorly performing employees and can lead to the dismissal of an employee on capability grounds. It is often, therefore, seen as a tactical step by an employer to reduce any risks to subsequent claims for unfair dismissal from employees.
What happens when you are placed on a PIP?
In the first instance, you should be informed of the PIP in writing and you should be asked to agree and sign the document. The PIP should clearly set out the areas in which you have been failing. It should further specify the improvements that are expected of you, including measurable objectives as well as the time frame within which you should achieve your targets. It should also set out the frequency of reviews, any support or training that will be provided and the consequences of failing to achieve your targets.
Employees on PIP’s usually find that they are subjected to strict targets of improvement which are usually set to be achieved in a short period of time. The targets can often be seen by such employees to be unreasonable in nature and equally, unattainable. If you have been subjected to a similar PIP, you might question the reason behind which you were placed on a PIP. This might give you an indication as to the real reason for the PIP and allows you to prepare for the possible outcomes.
What are the options available to you?
At the first opportunity, you should seek legal advice if possible. It is sometimes common for employees to seek legal advice at the later stage of a PIP and near to their dismissal. Although it is not too late to obtain a settlement for such employees, it can sometimes make it difficult to negotiate and obtain an optimum settlement. (more…)
By employment lawyer, Philip Landau
What does a redundancy mean?
You are redundant if you are dismissed because the need for the particular work that you carry out either at your place of work or in the business as a whole has ceased or diminish, or is expected to cease or diminish. This includes where the business or the actual place where you work is closing down.
When might a redundancy be unfair?
The most usual reasons for an unfair redundancy is where your role is not genuinely redundant, or your employer does not follow a fair process in making you redundant. In these circumstances, you may be able to make a claim for unfair dismissal or discrimination. (more…)
Protected conversations are a new concept which was introduced in 2013. This provides that an employer who commences a conversation with an employee with a view to terminating his or her employment under a settlement agreement, can do so without the employee being able to rely on the details of the conversation as evidence in an unfair dismissal claim. So, your employer can take you to one side and “out of the blue” have an open discussion with you in which you are offered a sum to leave- and it is that discussion that becomes “protected” and not able to be used in future tribunal proceedings. It is different to the previous position in that such protection only applies where a formal dispute had already arisen (such as a prior performance improvement plan, or disciplinary proceedings).
The aim of the new legislation is clear; it is to help employers facilitate an early exit of under -performing staff without the necessity of going through a lengthy process.
The provision is limited to standard unfair dismissal claims only; it does not apply, for example, to discrimination cases or other types of claim.
There is also a framework within employers need to operate if they wish to retain protected status of their offer to the employee. For example, employers can lose protection where they have acted “improperly” (such as exerting undue pressure on the employee) and employees are to have a 7 day “cooling off period” to consider any offer. You can access the ACAS guide to expected practice relating to protected conversations and settlement agreements by clicking here.
The idea of protected conversations will doubtless promote transparency in the workplace- after all if your employer doesn’t want you to hang around, isn’t it better you should know this early and have the option to leave with a lump sum payment and a reference rather than going through an onerous performance process? On the other hand, employers may take advantage of the ability to “cut to the chase” with their staff in the knowledge that many will not bother hanging around once they become aware they are not wanted.
It will be interesting to see the extent to which the new rules are adopted in practice, and whether there will be a sea change of trepidation in the workplace every time your line manger calls you in for a “quick chat”.
Please contact Philip Landau for further advice relating to this or any other employment matter. 020 7100 5256
You may be familiar with the term “compromise agreement”. This is a termination document which you are often asked to sign when you leave employment to ensure that you cannot make any claim against your employer. Later this year, the document will be renamed “settlement agreement” and is being introduced by a new law, which is part of the Enterprise and Regulatory Reform Bill presently going through Parliament. But that’s not all. (more…)