No longer required to work in the UK

It is possible that your employer might look to end your current UK working arrangements, whether temporarily (e.g., seconding you to another country) or for good (e.g., terminating your employment). Here are the key points for you to consider in either scenario.

Secondments

Overseas secondments are common within international organisations, especially for senior level staff. Generally speaking, you (as a secondee) would remain employed by your current employer, albeit seconded to work for a group company in another country (the “host employer”); you should be asked to sign a secondment agreement, detailing the relevant terms.

Assuming a working visa for the host employer’s country can be obtained, the main points to consider, include:

• Relocation costs: Who is responsible for paying what costs? Relocation is expensive: flights (for you and perhaps family members), shipping of personal items and temporary accommodation can all come at a price. It is common for employers to fund/contribute towards these, but you should understand exactly what will and will not be covered.
• Duration: Understand and agree the duration of the secondment and relevant notice periods. This is not only relevant from a personal planning perspective (e.g., renting properties, children’s schooling arrangements, etc.), but could impact on your tax position.
• Pay: Will you continue to be paid in UK sterling or in local currency? Logistical or tax issues may arise as a result of doing either. Also, if you are relocating to a country with higher living costs, you should consider asking for an increased living costs or an out-of-pocket expenses allowance, as well as possibly, a financial ‘buffer’ to guard against any currency fluctuations (if applicable).
• Benefits: Check that your current benefits (such as health insurance) cover you whilst you are in the host employer’s country. Also, ensure that the cover under any such plans is fit for purpose, especially if you are being seconded to a country with high healthcare costs, such as the US.
• Tax: It is important to understand what impact any secondment will have on your personal tax position, especially where the secondment gives rise to a presumption of tax residency in the host employer’s country. Tax advice should be sought both before and during the secondment and you should request that the employer funds this advice.
• End of secondment: It should be clear what arrangements will apply at the end of the secondment. For example, how you will re-integrate back into the UK’s business and the details of any relocation expenses back to the UK should be explained and understood.

In addition, by virtue of working in the host employer’s country, you will likely benefit from the relevant local employment laws and, depending on the circumstances, obtaining local employment law advice might be appropriate.

Termination

Sometimes things do not work out. Your employer might seek to terminate your employment where they have formed the view that you are no longer the best person for the role (especially in circumstances where there has been a change in ownership and the new owners wish to put their preferred leadership team in place, as is often the case in a private equity takeover) or there is a general clash of senior personalities.

Depending on the circumstances and how long you have been employed in the UK, you might benefit from employment protections (such as “unfair dismissal”) which would prevent your employer from simply terminating your employment without triggering a potential claim. As such, in these scenarios, it is common for your employer to approach you to discuss matters on a “protected” or “without prejudice” basis, seeking to agree a mutual separation in return for you agreeing to waive any claims you might have.

The main points to consider in such negotiations, include:

• Settlement payment: In return for your waiving any claims, it is common for senior executives to receive a settlement payment in excess of what they are otherwise entitled to. Large employers may have formalised severance payment plans, but typically this will be a point for negotiation. The greater the deemed legal risk, the higher any settlement payment is likely to be, so taking early legal advice is key.
• Notice periods: It is common for senior executives to be subject to long notice periods and so it is unusual for an employer to make a senior executive work out their notice. As such, a discussion around whether garden leave or a payment in lieu of notice is appropriate is most likely. A payment in lieu would likely result in an accelerated receipt of funds, but remaining employed during garden leave might be more attractive for the purposes of: (i) securing a new role (i.e., at interview it is often felt that confirming you are still currently employed, as opposed to confirming that you are out of work, is preferable); and/or (ii) immigration, where your right to stay in the UK is conditional on remaining employed.
• Bonuses and long-term incentives: It is vital to understand how unpaid bonuses and any vested and unvested employee incentives are to be treated. Depending on the circumstances and the underlying contractual position, you will want to ensure that any separation confirms that you will be treated as a “good leaver” under any relevant plan and/or that you are entitled for a pro-rated award in respect of the current bonus year (if applicable).
• Communication and references: It is common for parties to agree both internal and external announcements concerning a senior executive’s exit, as well as what an employer will say to any future employer or recruitment agent.
• Post-employment restrictive covenants: Most senior executives will be subject to restrictions in their employment contracts (such as non-compete or non-solicitation of clients). Depending on the circumstances, you should seek to have these limited or waived.
• Other benefits: Consider the wider impact your termination might have on you personally. For example, if you have been using a work mobile number for personal use, query whether you ask your employer (during negotiations) to transfer that number to you personally. Also, if you are undergoing any medical treatment which is funded via any workplace insurance scheme, it would be important to understand the impact that any dismissal would have on that and/or whether you can remain on the scheme for a period after termination in order to complete any treatment.

The terms of any mutual separation will typically be detailed in a settlement agreement which needs to be signed by both parties and the senior executive’s legal advisor.

Senior Executives: thinking of relocating to the UK?

Moving on from the UK

• I have Indefinite Leave to Remain (ILR) in the UK having permanently resided here to work as a C-suite executive for a number of years. I’m considering a new employment opportunity abroad. What’s the impact on my ILR if I leave the UK for this new role?
• By becoming a non-resident in the UK, do I escape the tax net?
• I bought a property in the UK in my name while I was here. I am undecided whether to sell it or keep it – what UK tax considerations should I bear in mind?
• How will my cryptoassets be affected if I were to move country?

Please do contact any member of our Sen Ex Advisory Group to suggest a question or to find out more about how we can help.

Senior Executives: thinking of relocating to the UK?

We answer common questions raised at key stages of the relocation process.