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David Roath | 3rd July 2015

Don’t leave me this way (a short guide for leaving employment for senior executives)


David Roath | 3rd July 2015

Don’t leave me this way (a short guide for leaving employment for senior executives)

For those of you who are not football fans, bear with me for a while as this is not about football but employees generally. However, being a football fan myself, this time of year is always a fascinating time. Who will leave your football club and who will join? When someone leaves, will this be done with a handshake and best wishes, or will it be a bitter parting of the ways?

In the football world, the departure of a player is often less than amicable and leaves a sour taste for supporters. If we take Adam Lallana at Southampton last year, I am sure he would not have wanted to have the left in the way he did. Adam saw a chance to play at what he perceived to be a higher level and this will have been weighed against the advantages of staying with his then current employer. His leaving was played out in the press and in a few short weeks he turned form hero to villain. The same thing is happening with Raheem Sterling who is unlikely to be welcome on Merseyside (at least the red side) after this summer.

Moving away from football (non-football fans please re-engage at this point) we have all seen employees leave their employment badly and others leave amicably and professionally. I have been advising employers and employees for many years in relation to senior level exits. These days I will act for the outgoing director as often as I will for the employer. This allows me to see and advise on senior level exits from both sides on a regular basis. What is clear is that, save in certain cases where the gloves have to come off, senior level employees will often have the chance to leave a business in a manner which allows him or her to retain respect and relationships, whilst at the same time ensuring fair recompense for the loss of employment. However, achieving this goal requires careful planning and a good solicitor who understands senior level exits.

When I first started advising senior executives on departure terms and options, the natural litigation instinct would kick in and I would start gearing up for a fight. What became clear was that certain employees were very aware of their reputation or “brand” and needed the lawyer to be aware of this in all dealings with the employer or the employer’s solicitor. These employees are generally very smart and they know when the writing is on the wall and the employment is coming to an end. They also know, however, that the business world can be small and a person’s reputation can be seriously damaged by the lawyer’s handling of a departure. Lawyers advising senior executives always need to be aware of this. Any well trained employment lawyer can advise on loss and put together a firm letter to the employer. However, a good employment lawyer will consider carefully with the departing employee how the departure will impact on their next position and how they wish the leaving process to be handled. For senior executives choosing their lawyer, I recommend that you ask at the outset how experienced the person is in dealing with senior level exits and what their strategy is in dealing with these cases? If the answer is to use shock and awe litigation tactics then you might want to reconsider.

In some cases, there might be no option but to be far more aggressive. An amicable and professional departure requires both employer and employee to be willing parties. There will always be the case where the employer is trying it on and acting in an unlawful and/or grossly unfair manner. In these cases, the employer needs education or sometimes a legal claim to bring them round.

Save for the few cases where an amicable departure cannot be agreed, I consider it important for employers and employees to approach the termination of employment in a mature, realistic and sensible manner. A few tips for all involved are as follows:-

For employees:-
• Take advice early and don’t agree any figures or timing without taking advice.
• If you are called into a pre-termination meeting, keep cool and just listen in the first instance. It is perfectly acceptable to say that you want any offer in writing and to say you wish to take legal advice.
• Choose your lawyer carefully. Ask if he or she specialises in senior level exits? Ask how he or she will handle such exits.
• Consider immediately what you plan to do next. Any experienced lawyer should ask you this as one of the first questions as it will drive the process and influence the figures and timing.
• If you need to take some heat out of the situation, ask for a period of paid leave.

For employers:-
• Take advice and have a clear strategy before you start the process. Too often an employer will start the process without proper preparation and/or planning.
• Decide how much risk you are willing to take at the outset
• Use the law which allows you to have pre-termination discussions.
• Don’t be too mean and make a silly offer.
• Make a fair offer at the outset and stick by it.
• Consider the use of benefits that might sweeten the deal, but not cost too much, such as:-
o Giving the employee equipment (such as the iPhone he or she is attached to)
o Extended benefits
o Outplacement
o Reference
o Good leaver benefits if shares are involved
• Agree to contribute to the employee’s legal fees, but not too much. Why pay to receive a long letter from the employee’s lawyer that is rather dull and won’t change your mind anyway.
• Take advantage of tax free exemptions and structure payments in manner which might benefit employer and employee (if this can be done)

For lawyers (acting for employees):-
• Ask at the outset what the employee plans to do next. Plan your strategy around this. This sounds obvious but it does not happen every time.
• Consider how important the employee’s brand and reputation is to him or her?
• Don’t make crazy offers or unrealistic statements about your client’s loss or job prospects.
• Before you write a letter damning the process and threatening all manner of claims, consider who will receive your letter and whether its really going to influence/help the process.
• Be creative and try and help the employer move to where you want to be. Many employers don’t have high quality advice and might miss something that can help the deal to go through.
• Be realistic with your client. It’s harder to recommend acceptance of a deal if you have oversold what might be achieved at the outset.

An unexpected departure from employment is not uncommon for senior employees. Businesses change and time changes. Sometimes the face simply no longer fits. So, there may be no choice as to whether to leave but there is often a choice as to how the departure is handled and whether this is handled well or badly.

If you (employer or employee) can handle a departure so both parties feel that it was fair, controlled and well documented then the parting of the ways need not be so bad. At least the employee who has left doesn’t need to do what the departed footballer has to do when he runs onto the pitch the following season wearing the opponent’s shirt.

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