Employment Law Advice for Employers - FAQs

Q. What are the Advantages and Disadvantages of Using a Compromise Agreement?
A. The main advantage to employers is the contractual obligations compromise agreements give to employers. Once signed the employee has signed away any right they may have had to bring a claim against you.

Q. I want an employee to sign a compromise agreement but I am not sure how to approach them.
A. The compromise agreement should be presented to an employee on a "without prejudice" or "off the record" basis. If you have any concerns about approaching your employee, call for advice.

Q. When does the ex-gratia payment become taxable?
A. Ex-gratia payments to employees are paid tax free up to £30,000, but provided this does not include any payments in relation to the employee's contract e.g. salary or outstanding holiday pay.

Q. Where can I get a compromise agreement from?
A. We are able to draft a compromise agreement to reflect and confirm the particular circumstances.

Q. I have presented my employee with a compromise agreement. What happens next?
A. In order for the agreement to be legally binding and to comply with the applicable law, the employee needs so take legal advice as to the terms and effect of the agreement and the agreement has to be signed off by a practising solicitor and the legal costs are normally payable by the employer.

Q. What do we need to worry about, if we handle a dismissal badly and get things wrong?
A. Depending on the circumstances, any of the following claims, alone or in combination, might be brought against you:

Wrongful dismissal
Unfair Dismissal
Discrimination

Q. Do we have to go through the whole of our disciplinary procedure every time?
A. It is advisable to do this, as it is important to allow an employee to put forward their arguments/case in defence.

Q. Can we dismiss for persistent poor time-keeping?
A. This is a conduct/performance issue and is a potentially fair reason to dismiss, but again a fair and reasonable procedure must be followed.

Q. We have an employee who has been off sick for almost six months, and shows no sign of recovering. Can we dismiss them?
A. To avoid a successful claim for unfair dismissal, you must be able to show that you acted reasonably in treating the absence as a reason to dismiss, and that you acted fairly before dismissing. It is important that you follow the correct process before you take any action.

Q. An employee has recently been sent to prison. Surely we can dismiss them?
A. Even though the employee has been convicted of an illegal act, you should still carry out such investigations as are reasonable in the circumstances before making any decision.

Q. What can we do, if an employee who has been dismissed refuses to work out their notice?
A. You can sue for breach of contract but you must be able to establish a loss. It is important to look at this as a commercial decision before taking any action.

Q. How long can an ex-employee wait before filing a claim?
A. The employee has 3 months from the date of termination to issue any claim, although there is discretion to extend this by the Employment Tribunal in certain circumstances.

Q. What do we do about requests for references, especially where we have dismissed an employee for incompetence or disciplinary offences?
A. It would be surprising if they still thought they would get a reference in this particular circumstance but best practice is to provide nothing more than a factual reference. You are not legally obligated to provide a reference at all!