Key Employment Law Differences

What are the key employment law differences that I should be aware of?

The key differences will depend on the jurisdiction in which the senior executive currently works or is otherwise familiar with. That said, common areas of difference include:

  • Probationary periods: unlike jurisdictions such as France where probationary periods are restricted in length, there are no restrictions in the UK. Sometimes employers ask senior executives to sign up to probationary periods of up to 12 months (during which time they can terminate the employment on short notice). Where possible, senior executives should negotiate a shorter probationary period or agree that one will not apply at all.
  • Family leave: employees in the UK are, generally, eligible for generous amounts of time off for maternity and/or adoption leave (both 12 months) and paternity leave (where it is possible for the mother’s partner to share her leave (for example, both parents taking 6 months off)). However, pay during these periods is limited and, except for the first 6 weeks of leave (where employees will typically receive 90% of their pay), employees will only be entitled to receive a small statutory payment, unless their employer offers enhanced pay as an employee benefit.
  • Bonuses: UK law does not oblige employers to operate bonus schemes (as the law in, for example, Hong Kong can sometimes provide). Senior executives will need to agree any bonus or employee incentive arrangements separately with the employer.
  • Notice periods: unlike in the United States it is common for UK senior executives to be subject to long notice periods (normally around 6 months). Employers will normally reserve the right to make a senior executive ‘work out’ his/her notice, put them on garden leave, or pay them in lieu of notice.
  • Termination payments: except where an employee’s employment is terminated due to redundancy, UK employees are not entitled to a severance payment on termination like they are, for instance, in Dubai. However, UK employees with more than two years’ service benefit from unfair dismissal rights which limits an employer’s ability to terminate their employment without triggering a claim. In our experience, where an employer looks to dismiss a senior executive, they will seek to do so via a settlement agreement under which the employee will receive an ex-gratia payment in return for waiving his/her rights to bring any claim.
  • Non-competes: it is very common for UK employers to insist that senior executives enter into a non-compete, preventing him/her from working for a competitor for a period (normally between 6 – 12 months) after their employment has terminated. Unlike in much of continental Europe, there is no requirement on employers to ‘pay’ employees during such restricted period. Where possible, senior executives should seek to limit the effect of the non-compete (including limiting the duration and its geographical scope) or, if in a particularly strong bargaining position, insist on a contractual payment being paid in the event the restriction is enforced.

For more information or advice, please contact Joe Beeston, Counsel in our Employment team.

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