Employers often ask us how to bring an employment relationship to a close quickly and efficiently once it has run its course. This situation can arise without any serious misconduct, perhaps due to a personality clash, a drop in performance or a negative attitude that impacts overall staff morale. However, it’s important to approach the end of an employment relationship with care. Mishandling the process could lead to claims of unfair dismissal and potentially legal action, exposing the company to unnecessary risks. 

In this blog, our expert employment law solicitors at Walker Foster discuss how employers can reach optimal outcomes when ending employee relationships.

Effectively ending the employment relationship

When advising our clients on dismissing an employee, we begin by discussing the five potentially fair reasons for dismissal:

• Conduct: situations where the employee’s behaviour or actions are unacceptable, such as breaches of company policy, misconduct or inappropriate conduct in the workplace.
• Redundancy: circumstances where the employee’s role is no longer necessary due to business changes, such as restructuring, downsizing or the introduction of new technology.
• Capability: instances where the employee is unable to meet the required standards of performance, which could be due to a lack of skills, qualifications or health-related issues affecting their ability to do the job.
• Illegality: cases where continuing to employ the individual would result in a breach of legal obligations, such as when an employee loses the right to work in the country.
• Some other substantial reason: any other legitimate and significant reason that justifies dismissal, such as refusal to accept new terms of employment, breakdown in trust between the two parties or conflicts of interest between the employee’s external interests or activities and the company.

Our goal is to identify the most appropriate reason for dismissal and ensure that the legally required procedures are followed. This careful approach is essential to minimise the risk of an unfair dismissal claim, especially since, under UK law, employees with at least two years of continuous service generally have the right to challenge their dismissal.

Claims might arise, for example, if an employee believes they were dismissed for a reason unrelated to their performance or behaviour, or if the employer did not properly investigate the situation or follow the correct disciplinary procedures.

We also carefully consider the background of the situation to further minimise the risk of dismissal claims. For example, could some factors lead to a discrimination claim based on protected characteristics, such as age, race, sex or disability? If a decline in performance or commitment is observed, we explore whether this could be linked to a disability or other factors, such as a female employee needing to leave on time for childcare reasons. This could introduce the risk of a disability discrimination claim or indirect sex discrimination. In such cases, a different approach may be necessary to address these potential risks and maintain a legally fair and sound dismissal process.

Speeding up the process

When protected characteristics are not an issue, employers are often eager to expedite the termination process. Few enjoy the administrative burden of investigating conduct issues or holding disciplinary or capability meetings. Once it’s clear the relationship should end, employers typically want to sever ties quickly and with minimal disruption, particularly if the employee poses a risk to the business, staff morale or client relationships.

‘Protected conversations’ are a useful tool in such cases. These conversations allow employers to explore an agreed termination of employment with the employee, often leading to a quicker resolution. Typically, this results in the employee signing a settlement agreement, creating that all-important ‘clean break’ between the parties and providing the employer with peace of mind that no appeals, grievances or claims will follow.

How do you benefit from a protected conversation? 

While protected conversations can be valuable tools, they come with certain risks. To maintain their protection and prevent the conversation from being used in a subsequent unfair dismissal claim, you must conduct them appropriately and thoughtfully, avoiding any ‘improper behaviour.’

Here are four tips to keep the conversation on track and minimise the risks of protected conversations:

• Maintain a neutral tone: present the reasons for the proposed exit offer in a neutral and calm manner. Avoid any language that could be seen as confrontational or biased.
• Allow reasonable control of the conversation: give the employee some control over the process. Allow them the freedom to end the conversation at any time or to take a break if needed. This helps to create a more balanced and less pressured environment.
• Provide options: frame the offer of an agreed exit as one of several options. Avoid ultimatums or any statements that could be perceived as threats or bullying. This approach encourages a more open and constructive dialogue.
• Be patient: although you may be eager to reach an agreement quickly, it’s important to give the employee reasonable time to consider the offer and seek legal advice if they wish. You might also discuss whether the employee would prefer to be on ‘garden leave’ while they make their decision, rather than continuing to attend the workplace.

By following these guidelines, you can better manage the risks associated with protected conversations and increase the likelihood of reaching a mutually agreeable outcome.

How do you improve the chances of reaching an agreement?

To enhance the likelihood of a successful negotiation, it’s helpful to go beyond simply avoiding “improper behaviour.” Consider these strategies:

• Be flexible: if the employee is unwell, confirm that they feel able to participate in a face-to-face conversation. Offer alternatives, such as conducting the discussion over the phone or via Teams, if that is their preference. This approach shows consideration for their circumstances and helps maintain a constructive dialogue.
• Allow support: although there’s no legal right for the employee to be accompanied during a protected conversation, consider allowing them to bring a family member, colleague, or workplace representative for emotional support. This gesture can create a more comfortable and open environment, which may lead to a more positive outcome.
• Prepare your proposal: ideally, have a draft settlement agreement ready for the employee to take away after the meeting. This allows them to review the terms in detail and demonstrates your commitment to a fair and transparent process.
• Provide clarity: be clear about the next steps in the process. If the employee decides to accept the exit offer, explain that they will need to seek legal advice on the terms and effects of the settlement agreement from a solicitor of their choice. The company will contribute to these legal costs. If the employee declines the offer, they will remain employed, and you will need to consider alternative approaches to improving or resolving the situation.

How will we help you resolve your issue?

Here’s what you can expect from us as we guide you through each step towards achieving a fair and effective resolution:

• Bespoke assistance: we understand that every employment situation is unique, which is why we provide personalised advice tailored to your specific circumstances. We begin by thoroughly assessing all relevant factors in your case, and then aligning our guidance with your objectives. Whether your priority is to minimise legal risk, protect commercial interests or achieve a swift resolution, we work with you to develop a strategy that suits your needs.
• Comprehensive support: our role is to support you throughout the entire process. This includes offering practical advice on how to handle sensitive conversations over the phone, assisting with drafting emails and equipping you with a concise ‘crib sheet’ for any protected conversation. We aim to make these difficult discussions as straightforward as possible.
• Legal expertise: in addition, we remain on hand to assist with any challenges that may arise, such as counteroffers or allegations made by the employee. Our focus is on helping you keep negotiations on course, ensuring that the financial terms of any agreement are both fair and reflective of your commercial realities, while also mitigating legal risks.
• End-to-end guidance: once a settlement agreement has been reached, we take care of drafting the document and will remain involved until it is signed by all parties and is legally binding. 

Find out more

If you want to bring an employment relationship to an end or explore your options regarding a problematic employee, please get in touch and we will be happy to assist you.