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Provisions relating to contract termination

Employment contracts will contain provisions relating to the termination of the contract. In addition to notice periods, these may include:

Any date set for retirement

Although you can only operate a set retirement age if you can objectively justify it. Justification of direct age discrimination must be based on 'social policy objectives', such as those related to employment policy, the labour market or vocational training.  This means the aims must be of a 'public interest nature', rather than purely individual reasons particular to one employer's situation. Read more on when an employee retires.

Whether pay can be given in lieu of notice

Read more on notice periods.

Reference requirements

Read more on providing references.

Restrictive covenants

Some businesses also put restrictive covenants in the contract of employment. These are designed to prevent employees from disclosing or using confidential information, trade secrets, etc, and/or soliciting or dealing with customers during a specified period after leaving the business.

It is a good idea to take advice from a solicitor before drawing up such restrictive covenants or other clauses to ensure they will be enforceable.

Garden leave

Some employers ask employees who are dismissed or who resign to work out their notice but not to come into the workplace. This is known as 'garden leave'. The employee stays on the payroll and is still employed during the period of garden leave, but is not required to attend work.

For more information on notice periods, how to issue the correct periods of notice.

If you want to be able to rely on garden leave as a means of retaining control over the employee during the notice period, it is advisable to include an express clause in the employment contract permitting this. Read more on the employment contract.

Any period of garden leave should be taken into account when you decide on the duration of restrictive covenants.