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Ben Jones
Ben Jones, UK Lawyer
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Notice is unreasonable?

Resolved Question:

I currently work as the Head of Actuarial Services for a Life insurer in the UK, and have been in the firm for 18 months. I am looking to leave to move to a non-competing UK insurer, but my current organisation are trying to enforce a 6 month notice period. Given that I will not be working for a directly competing firm, and that my role is relatively easy to replace through headhunters, and my employment with the firm has only been 18 months, would a court deem it reasonable that my employers can hold me to a 6 month notice period?


 


It is pertinent to add that I have only recently signed a contract including this 6 mth notice period, and have been paid a "sweetner" bonus to sign the deal.  I am happy to give this bonus back to facilitate my exit!   Many thanks

Submitted: 3 years ago.
Category: Law
Expert:  Ben Jones replied 3 years ago.

Ben Jones : Hello, my name is ***** ***** it is my pleasure to assist you with your question today. How will you leaving early affect the current employer?
Customer:

There will clearly be a detrimental effect,given my seniority within the business, but BAU should be able to continue with little impact. I am undertaking a couple of projects that would be more adversely affected, but I would not belive that they would be able to argue that I am business critical.

Customer:

Whilst it is a senior role that I occupy, it would be relatively simple to find a replacement for me with the assistance of a market-specific headhunter.

Ben Jones :

A 6-month notice period could certainly be enforceable if that is what you and the employer have agreed on. The length of your service with the company will have little impact and the key is whether this is what you both had agreed on, which appears to be the case here.


 


So if there is a written contract in place and it contains a specific clause detailing the notice period an employee is supposed to give if they wanted to leave their employment, they will be contractually bound by it. Therefore, if the employee fails to honour this notice period then they will be acting in breach of contract. The employer then has the option of suing the employee to seek compensation for damages resulting from their breach. However, in reality such claims are very rarely made. This is mainly due to the costs and time involved, also the relatively small damages that can be recovered. So whilst there is no way of predicting whether the employer will take this any further or not, chances are that they will not. A more likely outcome is that the employer refuses to provide a reference in the future or if they do, it could mention that the employee had breached their contract.


 


As to the potential costs, these would generally be those incurred in getting a replacement on short notice, for example recruitment fees they may have been forced to pay to get someone in to replace you, assuming these fees would not have been spent had you worked through your full notice period.


 


The bonus issue is something you can use in your negotiations with the employer to try and facilitate their agreement to release you early but they do not have to accept this if they did not want to.


 


It is therefore best to try and negotiate a mutually acceptable notice period that would suit both parties. However, if that is not possible and there is a pressing need to leave early, that is still a possibility, subject to the risks identified above.


 

Ben Jones :

Hope this clarifies your position? If you could please let me know that would be great, thank you

Customer:

Hi Ben

Customer:

Thank you for your response, but if I may say, it seems to be a little 'basic'. I do understand UK Contract Law, but have been led to believe that all contract clauses are subject to a contextual reasonability test, and that in employment law, current case-law would indicate that it is difficult for a firm to enforce such a punitively long notice period on an employee who is relatively easy to replace, and with a relatively short tenure. Whether I leave at the end of my notice period or not, they will still have to pay a significant recruitment fee (north of £40K) to replace me, therefore I would suggest that it not a relevant argument. Naturally I am keen to negotiate a mutually acceptable solution with my MD, however I am looking for leverage to ensure that I get my notice period reduced as I require. Just so that I am clear, is your advice that there is no grey area here, and that the contract that has been signed is sacrosanct? Rgds Tim

Ben Jones :

A court cannot enforce notice periods, meaning that they cannot force you to remain in your position in order to work through your notice period. The only issue if you were to breach such a clause is how this has impacted the employer and what, if any, losses they have suffered. If you are easy to replace then this would work to your advantage because there would be an argument that whatever losses they have suffered would be minimal and as such they would not really have a case against you. So this is not a matter of whether you can be forced to work for the next 6 months, but what the impact on the employer is from you not doing so.

As to the contract, then yes it would be legally binding assuming you both knew what the terms were and had agreed to them. Had your employer misled you in any way, then there could be leverage to argue the validity of the contract but assuming you both knew what you were agreeing to, then it would be binding on both of you

Ben Jones :

Happy to discuss further if needed

Customer:

Thank you for your assistance Ben - you have been clear with your interpretation.

Customer:

Rgds

Customer:

Tim

Ben Jones :

Thanks Tim, glad this has clarified your position, all the best

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