It is the start of a new year for me and the Book Group. At our latest meeting, while we welcomed in the New Year with champagne, Cyril told us he is considering a job change. He’s in a demanding role, made harder recently with problems of workplace bullying.
Cyril was on the verge of resigning. He was unsure of his entitlement to holiday pay and sick pay if he left. His employment agreement says he has to give one month’s notice. He said he has three weeks of annual holidays owing and five days of untaken sick leave.
If Cyril resigns, he should expect to work out his notice period, unless his employer has the right to pay him out for it and exercises that right. He is entitled to be paid for his accrued annual holidays, but not for his sick leave.
Also, his employer must pay Cyril for any public holidays that occur during the three weeks after his employment ends if they meet a complex test.
They have to fall on days that would otherwise have been working days for him had he still been employed, and as if he was taking all his accrued annual holidays.
What that means for Cyril is if his employment ended on Thursday 20 March (the day before Good Friday), he would get paid for his accrued annual holidays plus the public holidays of Good Friday and Easter Monday. The payments are to be made immediately Cyril’s employment ends. His employer must make a written record of the payments (or a record easily capable of conversion into writing) and keep it for not less than six years.
By the time I’d finished talking him through that, we’d missed the top-ups of champagne.
Cyril phoned several days later. Even though his employer disputed that he’d been bullied, he had negotiated a resignation deal that included a special bonus payment, though he hadn’t completed the bonus year. In return, his employer wanted written confirmation that the deal was in full and final settlement of all matters to do with his employment.
I explained if he signed, once he was paid he wouldn’t be able to make any legal claims against his employer over the termination of his employment, such as constructive dismissal. He had said he might argue he had resigned because his employer failed to stop the bullying he had suffered at work.
I added that some employers want more than just written confirmation that any problems have been settled; they request a formal record of settlement under the Employment Relations Act 2000, signed by employer, employee and a Labour Department mediator. The settlement is then binding and enforceable under the Act.
Cyril asked what I would say if he was asked to sign a similar settlement letter but without the bonus payment. As Cyril wouldn’t receive any benefit in return for his promise not to bring claims against his former employer, there wouldn’t be a legally binding agreement.
My advice then is to refuse to sign the letter.
If Cyril didn’t have any potential employment claims, his employer might ask him to undergo an exit interview or assessment. This could include Cyril confirming that he resigned of his own free will and didn’t have any unresolved problems in his employment. The actual wording should be checked with a legal adviser.
Cyril is still thinking about it. I hope he shows his thanks with champagne to replace the drinks we missed.
By Penelope Ryder-Lewis, first published in The Dominion Post