South Korea continues to overhaul its labour and employment landscape. We look at some upcoming changes to the notice of dismissal provisions and the prohibition of workplace harassment rules – both effective this year.
On 21 September 2018, the Minister of Labour announced the National Legislative Assembly’s (“NLA“) in principle approval of the draft amendment (“Draft Amendment“) to the Labour Protection Act B.E. 2541 (1998) (“Act“). Key changes and implications for employers are discussed below. Continue reading
Employers currently contemplating or negotiating termination agreements should be aware of changes to the tax regime which will apply for the 2018-19 tax year onwards. The expectation was that these will apply to payments received from 6 April 2018, although we understand that HMRC have advised that the new rules will only apply where the employment terminates on or after 6 April. HMRC have also stated that they are in the process of drafting detailed guidance on the application of the new rules and hope to publish it in the Employment Income Manual before 6 April. Once there is clarity on the date, employers will need to start factoring in the new rules when considering the timing and negotiation of termination payments.
Employers wanting certainty as to the date of termination for contractual purposes should ensure that the employment contract specifies when notice is deemed to be given or, if it does not, that they hand over notice in person to the individual. The Court of Appeal in Newcastle upon Tyne NHS Foundation Trust v Haywood ruled that, where an employment contract was silent on when notice was deemed to be given, notice sent by letter to the individual's house while she was on holiday did not take effect until her personal receipt of the letter on her return home (and possibly not until she read it). As a result, her termination date was pushed back to after her 50th birthday, entitling her to a much more generous pension.
Employment contracts often provide that employees may be dismissed without notice or payment in lieu of notice for 'serious misconduct'. However, what constitutes 'serious misconduct' is not always clear. The recent decision of the Court of Appeal of Singapore in Phosagro Asia Pte Ltd v Piattchanine  SGCA 61 provides some clarification on this question.
Employers may be entitled to summarily dismiss an employee for a grossly negligent failure to act, for example where the employee is senior and fails to uphold a key policy of the employer.
In the recent decision of Richards v Nicoletti  WAIRC 00941, the WAIRC Full Bench has determined that there is no scope to imply a term of reasonable notice of termination in employment contracts.
The applicant, Mr Richards, was a stockman whose employment was terminated without notice for alleged incompetence. Mr Richards brought a number of claims against his former employer, including in the WAIRC’s denied contractual benefits jurisdiction. Mr Richards alleged that his employer had breached an implied term of his employment contract by failing to provide him with notice of termination. At first instance, Mr Richards’ claim was dismissed by then-Chief Commissioner Beech.
A recent judgment of the District Court of South Australia has held that a term providing for termination on reasonable notice should not be implied into an employment agreement because of the application of the statutory minimum period of notice required by the Fair Work Act 2009 (Cth) (FWA).
The Court of Appeal has upheld a High Court ruling that, if an employee leaves without giving contractual notice (save in constructive dismissal circumstances), the employer has a choice whether to accept the breach as ending the contract, or to affirm the contract. If it chooses to affirm, it cannot force the employee to work but it can require the employee not to work for a competitor or contact clients (unless there is evidence that this would in effect compel the employee to return to work for the original employer). It can also require the employee to observe any restrictive covenants, provided the scope and full term of these are reasonable and enforceable at the date of the contract and it is reasonable to enforce them at the date of the injunction hearing. The Court of Appeal considered that the court’s discretion on the latter point was not all-or-nothing and enabled it to enforce covenants only for part of their term. Continue reading
Last year the Supreme Court ruled that, where an employer dismisses an employee with immediate effect in breach of the employment contract, the employee can choose whether to accept this breach as bringing the contract to an end or to affirm the contract so that it continues until the end of the contractual notice period. A recent High Court ruling has confirmed that the reverse also applies: if an employee leaves without giving contractual notice (save in constructive dismissal circumstances), the employer has a choice whether to accept the breach as ending the contract, or to affirm the contract. If it chooses to affirm, it cannot force the employee to work but it can require the employee not to work for a competitor or contact clients and to observe any restrictive covenants. Further, if the employer is willing for the employee to work during the notice period but the employee refuses, there will be no obligation to pay the employee during this period.
The case highlights the importance of making a prompt decision on how to respond to a repudiatory breach by an employee. If the decision is to hold the employee to the contract, care must be taken to avoid conduct which could be treated as accepting the breach (such as issuing a P45).
(Sunrise Brokers LLP v Rodgers, HC)