Employment Lawyers Can Answer Your Employment Law Questions
So he has been told that he will be leaving, but no formal discussion as yet. No formal warnings, but frequent discussions that sales position not acceptable. Actually over more like 10 months.
He is at 40% of target and very far below what was set as a minimum for bonus etc.
Hi, when you say he is leaving is that because he is being dismissed for poor performance?
How long has he worked there for?
But we want to do amicably as a settlement agreement if possible.
Do you remember his approximate start date?
ok you can actually dismiss him legally without having to go through a fair procedure or justify that there was a fair reason for dismissing him. He is not protected against unfair dismissal as he needs at least 2 years' service with you and he does not have that yet. If you wish to dismiss him you may legally do so simply by issuing him with the contractual notice he is entitled to and he will not be able to challenge this. So whether you wish to issue him with warnings prior to dismissal is up to you - it is not a legal requirement and not something he can challenge you over
Thanks Ben, that is very clear.
You are welcome
Do we need settlement agreement then?
Are there any risks at all?
You don't actually need a settlement agreement in this case - you can legally dismiss them without risks as long as you give them the contractual notice they are entitled to and follow any contractual dismissal policy
Sorry, Ben, one last point. We want to pay him one month (contractual) notice (taxed) and then an ex-gratia tax free payment. Can you confirm that we can do the tax-free without a formal settlement agreement?
The ex gratia payment could still be taxable as it may come under the rather wide definition of earnings under law so to be able to pay it tax free you must be able to show that it is for example paid as damages for compensation for breach of contract or something else. But this is really a tax matter so best discussed with a tax adviser. But I can confirm that you do not need a settlement agreement to pay an ex gratia payment
OK, Ben, that is all I needed. Thanks.
Great, all the best