Are restrictive covenants worth the paper they're written on?
Yes so long as they are properly drafted and go no further than is necessary to protect the company's legitimate business interests then they are likely to be enforceable.
Restrictive covenants must be reasonable in duration. Most restrictive covenants in employment relationships apply for somewhere between 6 and 12 months. Longer restrictions are more likely to be reasonable for senior employees or employees in specialist roles. However, whether a restrictive covenant is enforceable depends on the particular facts of each case. For example, if clients are locked into contracts with a business for a minimum period of time, this may justify a longer restricted period, because it is only at the end of the period that the business is likely to suffer damage as a result of solicitation by the ex-employee.
Restrictive covenants must also be reasonable in geographic scope. For example, it would be unreasonable to stop a solicitor working anywhere in the UK but it may be reasonable to stop them from practicing at any firm within a five mile radius for a period of six months.
There are other important factors to consider when drafting restrictions and so employers should consider taking further advice to ensure employees are signed up to bespoke contracts of employment which are tailored to an individual's role.
I have five staff. I want to change their working hours from 9.00am - 5.00pm to 8.00am - 4.00pm. Can I do this?
Changing an employee's contract of employment without their agreement, even where their employment contract allows you to do it, can be risky. If an employer simply imposes different contract terms such as a change in hours or pay, they will be in breach of contract and employees may well resign and make a claim against the company for constructive dismissal.
Before making changes, employers should consult with employees and explain and discuss the reasons for the change. Employees are far more likely to accept changes if they can understand the reasons behind them and have an opportunity to express their views.
Involving employees also makes good business sense, as it drives up levels of employee engagement and motivation. Some employers offer incentives to encourage their employees to agree to the change(s). Incentives do not have to be financially costly to a company, for example, a company wishing to alter shift patterns may be able to offer extra paid or unpaid leave in exchange.
Where an employee is refusing to agree to a change, it is advisable to take further advice at that stage as it may be necessary to consider bringing the employment relationship to an end.
Any agreed variations should be recorded in writing and a copy of the agreed changes should be issued to the employee as soon as possible.
One of my longstanding employees is underperforming and I don't think there is any chance of them improving - can I let them go now as long as I pay them notice pay?
We believe most employers know this is a risky thing to do but we still see it happening.
Where an employee has over two years service, dismissing someone in these circumstances, i.e. without first giving them the opportunity to show improvement, will result in the dismissal being unfair.
As in cases of misconduct, employers should always follow a fair procedure before considering dismissal; in most cases of underperformance employers will need to show they have issued the employee with a series of warnings through a disciplinary process before they can justify ending the employment relationship.
As part of this process it is vital that employers set clear targets and objectives so that employees know exactly what is expected of them. It is important that employers establish the reason why an employee believes they are underperforming and to try to establish whether there is any assistance or further training that could be offered to help them improve.
Where an employee is just generally unhappy in the role or even agrees that they are not going to be able to make the improvements necessary, there may be the option of having a discussion about bringing the contract to an end by mutual agreement under a settlement agreement. This can be a quick and safe way to bring about the end of the employment relationship without going through a full capability process as set out above.
I have three people doing the same role and I need to make one of them redundant. Do I need to keep the two people who have been here the longest?
No. The purpose of a fair redundancy process is to choose the best person or people for the remaining roles.
Where employees are all doing the same role, and a selection has to be made, it is important to apply fair and objective selection criteria. Whilst length of service can be one factor to consider, it does not have to be and a variety of other objective factors will be much more important to a business such as an employee's skill set, qualifications, punctuality and their disciplinary record. Employers can also take into account an employee's absence record but must not score in a discriminatory way i.e. an employee should not be marked down for any pregnancy related absence.
Before employers make a decision that a role is redundant (and before they can go through any selection process) they should firstly be consulting fully with the employees who are going to be affected.
They may have suggestions for how the redundancy can be avoided or may even opt to take voluntary redundancy, which would avoid the need to go through a selection process at all.
If selection is necessary, employees should be advised about what selection criteria is going to be used and why, and should be given the opportunity to challenge their particular score as part of the process; transparency and communication is crucial to a fair redundancy process.
An employee has gone off sick the day before they were due to attend a disciplinary hearing. Do I have to wait until they return to continue the process?
No. This is a common misconception. If it were true then employees could delay disciplinary processes indefinitely by staying off sick for weeks or even months. This has no benefit whatsoever and is just avoiding the inevitable. This is especially the case where an employee is claiming work related stress; the longer they avoid the process the worse they are likely to feel.
It's important for employers to appreciate the difference between asking an employee to come in to work and asking an employee to attend a meeting at work. Unless an employee has a fit note stating they are too ill to attend a work place meeting, there is nothing wrong with asking them to attend.
Other alternatives should however be offered, for example, it is sensible in some cases to offer to hold the meeting at the employee's home or at a neutral venue. Employers could also consider allowing the employee to bring someone other than a trade union representative or colleague, for example a family member or friend for support.
At the same time as arranging the hearing, employees should be advised that should they fail to attend without good cause, the hearing may go ahead in their absence and a decision reached without their input.
It really is therefore in an employee's interests to attend and take part in the process.
What is continuous service?
Continuity of service is measured by reference to a ‘statutory week’ this is defined as continuous service and the amount of time that you have worked for an employer, or associated employer. Associated employers are outlined within the legislation.
Under the Employment Rights Act 1996, continuity of service is maintained if an employee moves to a new job with an ‘associated employer’ within a statutory week (Sunday to midnight on Saturday). In order to break continuity the break must exceed one statutory week. It is therefore possible to leave one employer on the Monday of week one and start work with a new employer on the Friday of week two and still maintain continuous service.
Continuous service is used to calculate redundancy payments and entitlement to other contractual benefits (i.e. sickness and maternity pay).