Employment at Will in the UK

We were recently asked to provide UK payroll services to a West coast company taking on their first employee in the UK.

We scheduled an initial discussion with that company, a software/technology firm in the Bay area, to find out more about their intentions and what was being offered to the UK hire.

They knew about being paid monthly over here (as is normal for salaried positions) – although we occasionally come across US subsidiaries in the UK struggling to pay bi-monthly (a method that does not fit into the UK tax systems which supports either weekly or monthly calculations – but not bi-monthly, and is not liked by UK employees).   We talked about car allowances, mileage rates and benefits normally provided in the UK.

We offered to review the UK hire’s job offer or contract of employment to check whether there were any potential problems in them.

“No need” we were told.  Their US attorneys who confirmed it complied with UK law have reviewed the offer.   Did it include the term employed at will?

We knew that the concept of “Employed at will” was often included as being standard in the US, and the fact it was not legal in the UK was not generally known to companies new to the UK environment.

Nor, as it transpired, to their US lawyers.  “Of course it is included” came the reply.

In the UK an employee has employment rights that prohibit being dismissed at will.  Dismissal must be for a reason (justifiable) and procedures need to be followed even then.  These procedures are often set out in the employment contract.  Failure to justify their dismissal and/or follow the procedures would lead to hefty claims through employment courts and even, potentially, reinstatement.

In the honeymoon period shorter periods of notice can be built into the job offer (for instance  be subject to 2 weeks’ notice on either side during the first 3 months of employment), but once beyond that probationary period statutory employment protection legislation would apply.

They came to us as a trusted adviser in the UK capable of giving impartial and practical local help.  Having now heard about this illegal term they were going back to the potential hire to renegotiate the deal with them (and get the contractual aspects reviewed in the UK).

Employment at will – normal in the US – an alien concept in the UK.

If you wish to explore the options further for the UK, our Human Resources department gives further insight or contact us for more information.

Tags: UK Employment, uk employment contract, UK Employment law, UK hires, UK Inward Investment

This entry was posted on Tuesday, June 22nd, 2010 at 7:33 am by Paul Beare and is filed under Australia, Canada, France, New Zealand, popular, UK accounting, USA. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.