UK: Termination - employees can be held to notice period and need not be paid if they refuse to work

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)