We were recently asked to provide UK payroll services to a West-Coast company taking on their first employee in the UK.
We scheduled an initial discussion with that company, a software/technology firm in the Bay area, to find out more about their intentions and what was being offered to the UK hire.
They knew about being paid monthly over here (as is normal for salaried positions) – although we occasionally come across US subsidiaries in the UK struggling to pay bi-monthly (a method that does not fit into the UK tax systems which supports either weekly or monthly calculations – but not bi-monthly, and is not liked by UK employees). We talked about car allowances, mileage rates and benefits normally provided in the UK.
We offered to review the UK hire’s job offer/ contract of employment to check whether there were any potential problems in them.
“No need” we were told. The offer has been reviewed by their US attorneys who confirmed it complied with US law. Did it include the term employed at will?
We knew that the concept of “Employed at will” was often included as being standard in the US, and the fact that it was not legal in the UK was not generally known to companies new to the UK environment.
Nor, as it transpired, to their US lawyers. “Of course it is included” came the reply.
In the UK an employee has employment rights that prohibit being dismissed at will. Dismissal must be for a reason (justifiable) and procedures need to be followed even then. These procedures are often set out in the employment contract. Failure to justify their dismissal and/or follow the procedures would lead to hefty claims through employment courts and even, potentially, reinstatement.
In the honeymoon period shorter periods of notice can be built into the job offer (for instance be subject to 2 weeks’ notice on either side during the first 3 months of employment), but once beyond that probationary period statutory employment protection legislation would apply.
They came to us as a trusted adviser in the UK capable of giving impartial and practical local help. Having now heard about this illegal term they were going back to the potential hire to renegotiate the deal with them (and get the contractual aspects reviewed in the UK).
Employment at will – normal in the US – an alien concept in the UK – employees are protected in the UK.
For further information regarding employment at will, or if need support in drafting your employment contract to be compliant in the UK, please get in touch.