Notice pay after termination of employment – when can it be withheld?
Case study – how we recovered a significant sum for notice pay on behalf of a client recently
Kuldeep S. Clair, our senior Consultant Solicitor in Employment Law and Civil Disputes offers his views and tells the story of one of his recent cases:
This question commonly arises particularly when an employee does not have the right to claim unfair dismissal due to short length of service. Or otherwise it may be especially important where the employee is lucky enough to be entitled to a lengthy period of notice or has been on a high salary.
I advised a client recently who worked with a notice period of six months, as a lecturer at one of the country’s most reputable universities. She had initially been dismissed with notice and the university had intended to pay her ‘in lieu of notice’. Within a matter of days afterwards, an allegation was made that she had breached certain confidentiality requirements after the termination of her contract and that the notice pay was to be withheld.
My client disputed any breach. I advised that the suggestion of a breach was nonsense, and I wrote to say that unless any serious evidence of a breach was brought forward by the employer’s HR department, we required payment in full. There was aggravated correspondence between me and the employer; I set out the legal principles which applied, and it did not seem that the employer was disagreeing with anything much that I said, but their HR manager seemed to regard it as a matter to be proven by my client, with the burden on her, rather than by the University.
We were forced to issue a ‘letter before action’ to demand payment of the notice pay, combining my thorough employment law knowledge with my civil litigation skills. I considered that this approach would be the best in ‘upping the stakes’ and extracting payment as quickly as possible. It would also give us the right to claim interest and court costs, if the employer continued to be so obstinate. This was particularly so, given the large amount in question, a substantial five-figure sum for six months pay for a lecturer in London.
We were met with a response from solicitors instructed by the University. This was a well-known respectable ‘Legal 500’ firm with offices around the country. Although their letter was over two pages long and sought to defend their client’s position vigorously on the face of it, it ended in the final very short paragraph by surrendering to our very reasonable demand and offering to pay the outstanding salary. Our client readily accepted, was delighted with the result, and she received payment a few days ago.
Moral and conclusion of the story:
It is always a good idea to seek advice early as to your entitlement in an employment dispute:
Is there a valid wrongful dismissal claim? Here, the answer was yes – a very substantial claim.
Is there a valid unfair dismissal claim? This is a completely different question. Here the answer was ‘no’ – and we advised our employee-client accordingly from the beginning.
Here, the employer was even seeking to recover alleged losses from my client for the so-called breaches of confidentiality that had been committed by her. Until eventually caving in totally and paying what was due to her!
And more to the point, we managed to conclude the dispute without having to resort to proceedings, although we would have issued proceedings if necessary.
Kuldeep S. Clair
Employment, Dispute Resolution and Litigation
Sterling Lawyers Limited