According to the Times, global management consulting firm McKinsey offered some of its employees up to 9 months paid time “on search” to look for new jobs elsewhere. During this time, it was reported that employees were to be provided with their full pay as well as offered career-coaching services to find new work, instead of working on their client’s matters.
At the end of the 9 months, the employees must leave their position regardless of whether or not they have found alternative employment.
The rationale behind the idea is that the employer is able to manage its’ workforce reductions and headcount issues, whilst maintaining employee wellbeing and the business’ strong brand.
However, the question remains of how employers offering “on search” employment are able to legally dismiss their employees once their time looking for a new job is over.
Under the Employment Rights Act 1996, most employees with over 2 years’ service have the right to not be “unfairly dismissed”.
To be a potentially fair reason for dismissal, the reason must be one of either:
- Capability,
- Conduct,
- Redundancy,
- Illegality, or
- Some other substantial reason.
Capability and redundancy seem to be the most likely reasons which an employer offering “on search” employment would rely on, with those employees offered this option presumably either no longer adding value to the company, or where their role was no longer needed by the employer.
However, for an employer to dismiss someone fairly, they must also follow a fair procedure.
In relation to a capability dismissal, this fair procedure should usually take the form of a thorough investigation into the capability issues identified; the employee being made aware of the problem and given the opportunity to improve; providing appropriate support and training; regular review meetings; and the opportunity to appeal against any decision to dismiss.
In relation to a redundancy, this fair procedure should involve those employees who are affected by the redundancy being warned and consulted of their risk; the employer identifying an appropriate selection pool of employees; adopting reasonable selection criteria for that pool; and the employer considering alternative employment/re-engagement for those employees subject to the redundancy.
Additionally, employees who are being let go because of redundancy are entitled to take reasonable time off during work, to look for new employment or arrange training for a future job. Those employees who choose to exercise this right, granted to them under sections 52 and 53 of the Employment Rights Act 1996, must be paid their appropriate hourly rate, usually based on their contractual salary at the time when the notice of redundancy was given.
Considering an employee at the end of their time “on search” is automatically dismissed, whether or not they have found alternative employment, it is difficult to imagine either one of these fair procedures being implemented into the process.
Employers adopting this approach should therefore be aware that they may be opening themselves up to potential employment law claims from those same employees they believe they are helping.
The most obvious way for them to avoid being dragged into an employment tribunal action may be to offer those same employees a settlement agreement. This may offer protection from legal claims but can often be expensive.
If, as an employer, you would like more advice on how you can avoid being liable for a potentially unfair dismissal; or would like information on your possible rights and claims as an employee, please contact our Employment Law for Employers team on 03456 465 465 or email enquiries@rotherabray.co.uk.
Disclaimer: This blog is for information only and does not constitute legal advice. If you need legal advice please contact us to get tailored advice specific to your circumstances from our qualified lawyers.
