Wrongful Dismissal - Employers Beware!

The High Court has recently handed down its judgment in the case of Geys v Societe Generale [2010] EWHC 648 (CH).

This case concerned an employer’s right to terminate its employee’s contract with a payment in lieu of notice.

For an employer to do so lawfully, it must give notice to the employee that it is making a payment in lieu of notice and state which contractual provision allows it to do so. The employer must also make the appropriate payment in lieu of notice calculated in accordance with the specific contractual clause.

Should the employer fail to satisfy these two requirements, the employee may be able to treat the purported termination as a repudiatory breach of contract, which in turn, would allow the employee to resign and subsequently pursue a claim for constructive dismissal.

Furthermore, if the employer is found to have been in repudiatory breach of its employee’s contract, and that contract contained the benefit of post termination restrictive covenants, the employer will no longer be able to rely on these to protect its business interests.

The Geys case therefore has important ramifications for employers who wish to make payments in lieu of notice to their employees!

The best course of action, if you are considering dismissing an employee, is to seek professional legal advice. To comment on this article, or if you would like further employment law advice on wrongful dismissal or unfair dismissal, please contact employment law solicitor Nick Benton by clicking here