10 minute read
Post employment
Postemployment
Even after employees have left your employment, whether it is to go to another employer, to retire or because of dismissal or redundancy you as an employer still have certain responsibilities towards your former employee.
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As an ex-employer there are various aspects of a continuing responsibility, including giving references and ‘garden leave’.
References
The legal position
There is no legal obligation on an employer to provide an individual with a reference, unless there is a specific contractual term obliging the employer to do so or if you are employed within a specific industry, e.g. financial services. Sometimes, however, an employer’s refusal to supply a reference may constitute discrimination so all such situations should be carefully considered.
Any reference given must be truthful and factually accurate. Therefore, employers/authors of references should ensure that any reference provided is carefully drafted.
An inaccurate or defamatory employment reference can be the subject of an action for negligence or claim for defamation against an employer and/or the individual author at an employment tribunal or county court. You should remember that the author of a reference owes a ‘duty of care’ to the person about whom it is written.
Where the author of a reference is proven to have acted negligently, the subject of the reference does not have to prove ‘actual loss’ of employment, only that he or she has lost a ‘reasonable chance’ of employment and thereby sustained a loss.
You should note that the recipient of the reference may be able to sue the individual referee and/or the employer for damages if the information contained in the reference is inaccurate or misleading.
Aims of a reference
There are two principal reasons for an employer requesting a reference on a prospective employee. These are:
1.
2. To provide opinions as to the candidate’s suitability for the post in question and his or her potential for the future.
To confirm the accuracy of statements made in his or her application.
In responding to a request for a reference, the facts about an individual’s employment history and any opinion about his or her ability to undertake a new role should not be confused. If you offer an opinion regarding an individual’s abilities, you must make clear your reasons for such a view. If challenged, you would need to provide evidence to support your points of view.
Providing a reference
When writing a reference, you should always indicate how long you have known the individual and in what capacity. Ensure that the facts stated about the individual are correct. No reference should be made to facts which you may be unsure about.
If you are asked to express an opinion on an issue about which you cannot make an unequivocal statement, for example regarding an individual’s honesty and integrity, it is appropriate to use a phrase such as: ‘I know of nothing that would lead me to question X’s honesty.’
You should ensure that you take care if asked to make a judgement concerning the individual’s suitability for a role, particularly if the role is significantly different to the work the individual did for your company.
As a general rule, only comments on an individual’s performance or ability that have already been the subject of discussion with him or her should be included.
All references should be marked ‘confidential’ to the addressee. It is also a good idea to include a disclaimer in the final paragraph of a reference. This could be something along the lines of:
Note: There is no guarantee that a disclaimer can prevent an individual bringing a claim. Therefore, due care must be exercised when preparing a reference.
All references must be given in the strictest of confidence. The recipient may be required to disclose a reference under certain circumstances, such as a request for disclosure by an employment tribunal or a court dealing with a case of negligence or defamation.
Under the General Data Protection Regulation (GDPR) 2018, individuals have the right to request to see references written about them by their current or past employer. This should be taken into account when you are writing references.
Template 8.1 – Letter giving a reference
Telephone or verbal references
Although requests for telephone or verbal references are frequently received, such requests should be declined other than in exceptional circumstances, as information given in this way may be misinterpreted in its transmission. If, exceptionally, a verbal reference is given, steps should be firstly taken to identify the enquirer. It is also a good idea to make notes of the content of the conversation.
Note: Where a verbal reference is given, the person giving the reference should not make any statements that he or she would not be willing to make in writing.
Disciplinary sanction/criminal convictions
Care should be taken when the area of disciplinary sanctions are the subject of a reference. If disciplinary sanctions have been taken against the subject of the reference, or if his or her performance is under formal review, you should disclose only those warnings which remain current on file. In doing so, you should state which rule has been breached, the level of penalty imposed and the date when the warning will expire.
Where an employee has been dismissed as a result of disciplinary action, the employment reference should be purely factual, stating the dates of employment, the capacity in which the individual was employed, and the date and reason for dismissal. If there is an outstanding appeal, this should be stated.
Care should also be taken not to refer to spent criminal convictions in references.
Unsolicited references
It is generally inadvisable to provide unsolicited references addressed ‘to whom it may concern’. If you do provide such references, ensure that the reference is limited only to factual statements, such as the individual’s dates of employment, sickness record and the capacity in which he or she was employed.
Restrictive covenants
The business relationship between you, as an employer, and any one of your employees is built on trust. You trust your employees to get on with the jobs they are employed to do in accordance with the rules that you set and in an efficient manner. In return, the employee trusts that you will provide him or her with reasonable working conditions and that you will pay him or her the salary and other benefits that you have agreed at the outset of the employment.
The law imposes certain obligations upon you, as an employer, and one of these, as set out in section 1 of the Employment Rights Act 1996, is that you will provide your employee with a statement of his or her main terms and conditions of employment.
However, in any relationship, you have to guard against that relationship coming to an end, which is why there are notice periods for each party, and disciplinary procedures in the event that there is a breach of your rules.
The law also makes provision for redundancy as a reason for termination in the event that the business is affected by a shortage of work and is unable to maintain full employment for all.
In situations where employees are leaving, whether through resignation or otherwise, it is often necessary to protect the business against disclosure or use of its trade secrets, manufacturing processes, details of the services provided and their costs, customer lists, details of suppliers and so on.
For this reason, it is essential to build into the terms and conditions of employment a clause which protects the business in the event that an employee leaves. Such a clause is known as a restrictive covenant or post termination restriction.
A restrictive covenant/post termination restriction in the terms and conditions or contract of employment sets out the employee’s obligations to the employer, not only during employment but also after employment has ended.
During employment, the law implies a duty of fidelity from the employee to the employer, which protects employers against breaches of confidence and activities that could amount to harmful competition on the part of employees.
Once employment has ended, the law does allow that an employer is entitled to continued protection for his or her business and, therefore, the implied duty of fidelity survives after the employment has ended.
The key to the successful enforcement of a restrictive covenant/post termination restriction is in its reasonableness. Restricting your employee from taking up additional work or a second job that is, or is likely to be, in competition with your own business during his or her employment with you is certainly reasonable. Where the additional work or second job is not in competition, a restrictive covenant/post termination restriction is not appropriate.
When employment has ended, it can be reasonable to put a restriction on an employee using your trade secrets elsewhere, or going to work for a competitor, sometimes within a specific radius of your premises. Restricting the employee from soliciting customers or suppliers, or making use of information that he or she has only obtained whilst working for you, would also be considered reasonable.
It is also reasonable to prevent your employee from ‘poaching’ your existing staff by inviting them to leave your employment.
Similarly, it is reasonable to protect the genuinely confidential information your ex-employee has obtained during employment with you. This information must be genuinely confidential because, if it is in the public domain, the clause will be ineffective.
It is usual to put a timescale on the effect of the covenant, and the length of that timescale has to be reasonable. For example, to restrict someone from working, say, in a hairdressers for a period of 12 months would normally be unreasonable, whereas 12 months might not be unreasonable if the type of business you operate is fairly exclusive and your competitors are few and far between.
Restrictive covenants/post termination restrictions are usually in force for a period of between three and six months, or even up to 12 months depending on the sector/ industry which has been regularly held by the courts to be reasonable.
Template 2.1 – Statement of terms and conditions of employment (contract of employment)
Final pay/records
Salary and pay records
Once your employee leaves your employment, you need to ensure that he or she receives all monies owed to him or her, including any outstanding expenses incurred just prior to his or her departure.
You need to retain records of pay for three years by law from the end of the tax year they relate to. These may be required at a later date by HMRC or the Department of Work and Pensions (DWP).
Personnel records
Under the General Data Protection Regulation (GDPR) 2018, personal information should not be retained ‘for longer than is necessary’.
Upon your employee’s departure, you should review the information in his or her personnel record, retaining only that which is relevant. Documentation must be securely disposed of, for example by shredding.
Note: An ex-employee can make a claim for redundancy pay after the dismissal in some circumstances. Similarly, injuries or medical conditions arising from employment with you may not become evident until later in an ex-employee’s life, meaning that insurance claims for these can sometimes be received many years later.
Garden leave
‘Garden leave’ is the term given to a situation whereby an employee is required to serve out a period of notice at home. During this period, the employee continues to receive all salary and benefits, but is prohibited from commencing employment with a new employer until the period of garden leave has expired.
It is a practice that employers often adopt with employees who have a certain status whereby they have access to confidential information or customers, and where they are leaving to join a competitor. During the period of garden leave, the employee’s access to such information or customers is either restricted or denied.
Note: You cannot enforce a period of garden leave if you do not explicitly state this as your policy in your contract of employment.
