Compromising Dismissal Procedures: Employment Judge Condemns Banks’ Breaking of Employment Law

April 10, 2012

In a recent Employment Appeal Tribunal decision, an employment judge took the opportunity to comment on a practice widely described as “compromising staff out”.  The judge described the employer’s approach in the case King v Royal Bank of Canada as “a very limited procedure” apparently common in the banking industry. It involved inviting the employees to a meeting, explaining the reasons for the termination of their employment, putting them on garden leave with immediate effect, not giving them the right of appeal, while offering them a compensation package in return for signing a compromise agreement. The reason the employer put forward for this approach was the potential risk of damage to the business from a disgruntled employee who remained in the office and continued to carry out day-to-day work. The employer’s evidence said it had subsequently changed this practice.

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