A
decision by the Court of Appeal to overturn a controversial employment appeal
tribunal ruling on the Cerebus vs Rowley case, will allow employers to avoid
expensive severance payments to employees.
The
decision means that employers will not have to pay out the full six months’
notice if the dismissed employee secures a job immediately afterwards, if the
employees has a payment in lieu of notice clause in their contract.
"Employers
will welcome the decision as it puts them in a more equitable position on the
issue of termination payments," explains Russell Brimelow, head of the
employment at law firm Boodle Hatfield.
He added,
"The Court of Appeal has returned the law to the previous position,
allowing employers to profit from the employee’s success in finding work
elsewhere during the period of time for which the employee should have been
paid in lieu."
Mark
Childs, global head of compensation for Fidelity Investments, said, "This
confirms my view that the decision marks a return to common sense, but this
does not excuse personnel managers from exercising care in breach of contract
cases.
www.cchnewlaw.co.uk
By Karen Higginbottom
