When an Employee Leaves…

When it comes to employees giving notice, there are several key areas to note:
There is no entitlement to be paid instead of being asked to work notice. Employees can still be disciplined for misconduct, refusal to follow reasonable instructions (such as carrying out a handover) or failing to attend work during this time during a period of notice.

If the employee starts work for someone else in their notice period, it is possible to obtain an injunction to prevent them starting with their new employer and there is no obligation to pay them if they do not come to work. Although this is expensive and time-consuming so not something to be undertaken lightly!

If the contract allows, it may be commercially preferable to put the employee on ‘garden leave’ for some or all of the notice period. During this time, they remain an employee, are not required to attend the office and should be prevented from contacting clients, suppliers and colleagues, but they continue to owe all the usual duties of confidentiality and fidelity to the business. Garden leave must be for a reasonable and proportionate duration only and the contract may reduce post-termination restrictions by the garden leave period.

Employers may consider making a payment in lieu of notice (PILON) if there is a contractual right to do so. A PILON ends the employment immediately. Howeve holiday pay accrued during the notice period must also be paid.

Company property and reclaiming training costs

Employers are entitled to the return of their confidential information and company property, including passwords and logins, and this should be stated in the employment contract.

Subject to the terms of the relevant schemes, employers can seek repayment of money owed by the employee; for example, season ticket loans or cycle to work schemes. Training costs (and the like) can be reclaimed, provided the repayment terms are reasonable and proportionate. Check that there is a signed contract confirming that deductions can be taken from a salary, otherwise it is an unlawful deduction.

Restrictive covenants

Employers can lawfully restrict employees’ activities after the employment ends regarding confidentiality, intellectual property and, in some cases, contacting clients or colleagues and working for a competitor. But restrictions will only be enforceable if they are reasonable and proportionate ways of protecting a legitimate business aim and take into account things like the role carried out by the employee, their knowledge and workforce stability. However, if an employee has been placed on garden leave or paid a PILON without a contractual right, these restrictions will usually be invalid.

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