URGENT Advice Needed - Reasonable Notice Clause

**Lilspoon** · 15th July 2015, 21:12:PM

Re: URGENT Advice Needed - Reasonable Notice Clause

To add clarity if needed..

My contracts reads extactly...

21.3 After completion of your probationary period, the College may terminate your employment by giving you notice in writing as follows:

Three months notice in writing.

In regards to notice we have to give if leaving it reads...

21.2 You may terminate your employment by giving the College Human Resources Department appropriate notice which is based on your grade, as set out below:

Three months notice in writing.

If you need any further quotes or anything please let me know

**matt3942** · 15th July 2015, 21:25:PM

Re: URGENT Advice Needed - Reasonable Notice Clause

Hi [MENTION=69645]Lilspoon[/MENTION] - Welcome to the forum. I am sorry to read about your situation.

If you've spoken with ACAS already and they've advised you are entitled to 3 months' pay, and offered to assist with legal proceedings, I'm not sure how we can be of further help.

The one thing I will say is don't spend too much time reading up on standard contract law - it often doesn't apply to employment law. I would wait to hear back from your Union rep and then take things forward with ACAS if necessary.

- Matt

**teaboy2** · 16th July 2015, 00:03:AM

Re: URGENT Advice Needed - Reasonable Notice Clause

Yep its 3 months notice pay, they can not pay you any less!

**Employment Law Clinic** · 16th July 2015, 17:16:PM

Re: URGENT Advice Needed - Reasonable Notice Clause

Hi to all,

Just using a registration I made previously to jump straight in on this thread -please excuse the lack of fora etiquette; I'll try to post an introduction when time permits.

Originally posted by teaboy2 View Post

Yep its 3 months notice pay, they can not pay you any less!

What makes you say that so confidently Teaboy? The contract has a clear clause stating that notice for redundancy will be with "reasonable notice", so why do you think it has to be 3 months'notice?

Originally posted by Lilspoon View Post

What they are using as their 'clause' is a paragraph in the contract that says 'in event that your employment is terminated by reason of redundancy, you will be entitled to a reasonable notice period which is based on your length of service with the college.'

Karl Limpert

**teaboy2** · 16th July 2015, 17:28:PM

Re: URGENT Advice Needed - Reasonable Notice Clause

Originally posted by Employment Law Clinic View Post

Hi to all,

Just using a registration I made previously to jump straight in on this thread -please excuse the lack of fora etiquette; I'll try to post an introduction when time permits.

What makes you say that so confidently Teaboy? The contract has a clear clause stating that notice for redundancy will be with "reasonable notice", so why do you think it has to be 3 months'notice?

Karl Limpert

Employment law and notice period being expressed term supported by statutory law. Reducing the contracted notice period for redundancy would make such clause unfair as it amounts to a financial penalty! Also redundancy is dismissal, where you are dismissed without being allowed to work your notice period, such dismissal amounts to breach of contract therefore payment in lieu of contractual notice period is a compensatory payment. If dismissed but allowed to work the notice period then no payment in lieu is required to be paid!

If they give 3 months notice as required notice in your contract to terminate your contract, then they can not revert to paying you the statutory minimum notice period when making you redundant, they must pay you noticed based on the notice period in your contract! Reasonable notice is to broad a term, they give no clear indication as to what would amount to reasonable notice per year worked! So it wouldn't be a valid term, and besides its not an expressed term so where as the term stating 3 months notice is an express term and it gives a clear indication as to the length of notice period!

**Employment Law Clinic** · 17th July 2015, 00:53:AM

Re: URGENT Advice Needed - Reasonable Notice Clause

Wow, and thank you, that’s quite a comprehensive explanation TeaBoy.

Unfortunately I beg to differ with some opinions or views you’ve expressed in there.

Originally posted by teaboy2 View Post

Employment law and notice period being expressed term supported by statutory law.

Employment/statutory law (the same thing, the former describing the particular field of law being discussed in this thread) are actually implied terms. If the employment contract stipulates precisely what the statute says is necessary, it would be an express term, but otherwise it’s implied that the law forms part of the contract.

Originally posted by teaboy2 View Post

Reducing the contracted notice period for redundancy would make such clause unfair as it amounts to a financial penalty!

I agree with this… but it’s not what’s happened in this case.

Originally posted by teaboy2 View Post

Also redundancy is dismissal, where you are dismissed without being allowed to work your notice period, such dismissal amounts to breach of contract therefore payment in lieu of contractual notice period is a compensatory payment. If dismissed but allowed to work the notice period then no payment in lieu is required to be paid!

Yes, I would acknowledge what you say here. (No idea why it’s mentioned though.)

Originally posted by teaboy2 View Post

If they give 3 months notice as required notice in your contract to terminate your contract, then they can not revert to paying you the statutory minimum notice period when making you redundant, they must pay you noticed based on the notice period in your contract!

This is where we disagree on what the contract actually states. Just as the contract implies there was a different notice period during the probation period (it states “after completion of your probationary period”, inferring it wasn’t the same notice during that time as after it), and there typically wouldn’t be a notice period at all for instances of gross misconduct, there is also an express term that the notice period is “reasonable” where dismissal is due to redundancy (and regardless of how the OP interpreted this, it is actually an express term: it’s clearly stated that this is a clause in the contract – an express term.)

So in practice, the contract’s express terms for notice vary dependent on the reason for dismissal, and in the case of redundancy, the terms are vague, only providing for “reasonable notice” (which would of course have to at least comply with the implied terms provided by s86, Employment Rights Act 1996). However, the fact there is a clear distinction made in the contract between notice for other reasons & notice for redundancy clearly suggests that it is not intended to be the same terms or duration – otherwise the clause would be futile, no point in drafting it as a separate term at all. But instead the clause makes clear reference to length of service (which can inform minimum notice periods, per s86). Therefore, with a clear condition of employment that provides a different length of notice period where the reason for dismissal is redundancy, it has to be concluded that the parties to the employment never agreed that where dismissal is due to redundancy that notice would be the exact same as where notice is given for some other reason, instead agreeing an express term that notice would be “reasonable”.

Which conveniently leads in to another point in the reply:

Originally posted by teaboy2 View Post

Reasonable notice is to broad a term, they give no clear indication as to what would amount to reasonable notice per year worked! So it wouldn't be a valid term, and besides its not an expressed term so where as the term stating 3 months notice is an express term and it gives a clear indication as to the length of notice period!

While I appreciate you explained your view so clearly, I find it curious that you would not accept that “reasonable notice” is a valid term, or that it’s too broad a term. I’d be surprised too if an employment tribunal ever suggested that notice of dismissal cannot be given with “reasonable notice”. Beyond what you've already said, do you have any legal reasons to support this position?

My (contrary) views are probably because the Judicial Committee of the Privy Council found that to be exactly what was required in law: in the case of Reda v Flag Ltd, their Lordships actually stated that “Most contracts of employment are of indefinite duration and are accordingly terminable by reasonable notice in the absence of express provision to the contrary.”, so I do suspect the term approved by the JCPC would not in fact be too broad a term, but would instead be a valid term for an employment contract – even though it gives no clear indication as to what would amount to reasonable notice. Therefore, personally I would think what the JCPC say should at least be implied in an employment contract would still be valid if included as an express term – as it was in this case/contract.

(Just an opinion though, I don’t assert that it is definitely a valid term, and respect (even if I don't agree with) your view that it is too broad.)

Karl Limpert

**matt3942** · 17th July 2015, 08:53:AM

Re: URGENT Advice Needed - Reasonable Notice Clause

Originally posted by teaboy2 View Post

Yep its 3 months notice pay, they can not pay you any less!

Sorry [MENTION=19071]teaboy2[/MENTION] but I disagree also - the contract term does state clearly that in the event of redundancy a reasonable notice period will be given. However, if ACAS have picked this up - and said different - I would advise the OP to go down that route.

- Matt

**teaboy2** · 17th July 2015, 10:19:AM

Re: URGENT Advice Needed - Reasonable Notice Clause

Originally posted by Employment Law Clinic View Post

Wow, and thank you, that’s quite a comprehensive explanation TeaBoy.

Unfortunately I beg to differ with some opinions or views you’ve expressed in there.

Employment/statutory law (the same thing, the former describing the particular field of law being discussed in this thread) are actually implied terms. If the employment contract stipulates precisely what the statute says is necessary, it would be an express term, but otherwise it’s implied that the law forms part of the contract.

Section 1 subsection 4 (e) ERA 1996 "the length of notice which the employee is obliged to give and entitled to receive to terminate his contract of employment," That makes notice period terms an expressed term regardless as to whether its the statutory minimum notice period or a more generous notice period, it is still an express term of an employment contract as it is prescribed by law! Also in contract law the term "express term" applies when said terms are terms that have been specifically mentioned and agreed by both parties at the time the contract is made. They can either be oral or in writing. How can one agree to "reasonable notice" if one doesn't know what "reasonable notice" would amount too!

I agree with this… but it’s not what’s happened in this case.

But that is precisely what has happened, the contractual notice period is 3 months for the OP and the employer has reduced it to just 1 months notice off the back of the clause that is invalid!

Yes, I would acknowledge what you say here. (No idea why it’s mentioned though.)

It was mentioned because the compensatory payment for dismissal and not being allowed to work the 3 month notice period, would be 3 months pay in full! By reducing the notice period as per the invalid clause they are in effect causing the employee financial detriment by paying them less notice period than the contractual notice period! The only way round having to pay the 3 months notice, would be if they had included statutory redundancy notice period as a term to the contract under the redundancy section , but they have not, they merely referred to reasonable notice!

So if they had wished to not pay the 3 months notice but the statutory minimum notice for redundacy as is the case here considering the OP has been their 3 years 11 months (4 years for the sake or argument). Then they should have included an addition term on satutory redundancy notice period giving the details of the notice periods as per below:

at least one week's notice if the employee has been employed between one month and two years
one weeks notice for each year of employment between two years and 12 years
12 weeks notice for someone who has been employed for 12 or more years.

This is where we disagree on what the contract actually states. Just as the contract implies there was a different notice period during the probation period (it states “after completion of your probationary period”, inferring it wasn’t the same notice during that time as after it), and there typically wouldn’t be a notice period at all for instances of gross misconduct, there is also an express term that the notice period is “reasonable” where dismissal is due to redundancy (and regardless of how the OP interpreted this, it is actually an express term: it’s clearly stated that this is a clause in the contract – an express term.)

Your confusing the issue here. Gross misconduct is a serious breach of contract by the employee, hence why they are not entitled to compensatory payment (Notice Pay) when summarily dismissed. Probationary period terms allow for employers to dismissed employees for any reason during the probationary period without giving notice, however in most cases they would still have to pay statutory minimum notice period or contractual notice pay if the dismissal was for any other reason than gross misconduct! And in most employment contracts there is a separate notice period (given as a clause that expires at the end of the probationary period) required to be given by employee and employer during the probationary period to that of the contractual notice period required after the probationary period has expired, probationary period is basically a fixed term contract within a full time employment contract where the terms/clauses of the probationary period end once the probationary period expires and as such are superseded by the main terms in the contract of employment. But the fact is, the OP is not in probationary period, therefore probationary period notice terms/clause do not apply and have been superseded by the standard contractual notice period of 3 months. Also the OP has not been dismissed for gross misconduct either. Also the OP has no clause that stipulates duration of notice period entitlement under redundancy, all they have is a clause referring to "reasonable notice". That alone does not stipulate as to what is "reasonable notice", and as said above, if they wanted to pay statutory minimum notice period for redundancy then they should have stated that as a separate terms along with details as to the duration of notice period, as per i have done above (see above bullet points). But they did not, therefore the clause is invalid on the basis it doesn't state what the notice period actually is or the qualifying elements (i.e. 1 week per year worked)!

So am sorry but i do not see how your use of gross misconduct and probationary periods is relevant to this debate or the OP's contractual terms!

So in practice, the contract’s express terms for notice vary dependent on the reason for dismissal, and in the case of redundancy, the terms are vague, only providing for “reasonable notice” (which would of course have to at least comply with the implied terms provided by s86, Employment Rights Act 1996). However, the fact there is a clear distinction made in the contract between notice for other reasons & notice for redundancy clearly suggests that it is not intended to be the same terms or duration – otherwise the clause would be futile, no point in drafting it as a separate term at all. But instead the clause makes clear reference to length of service (which can inform minimum notice periods, per s86). Therefore, with a clear condition of employment that provides a different length of notice period where the reason for dismissal is redundancy, it has to be concluded that the parties to the employment never agreed that where dismissal is due to redundancy that notice would be the exact same as where notice is given for some other reason, instead agreeing an express term that notice would be “reasonable”.

I agree, but your missing the point that saying "reasonable notice" and reference to length of service, on there own, without a clearly stated definition as to what the employer deemed reasonable notice based on length of service (as per bullet points above) then the clause is invalid. The employer fails to state what the notice period would be per length of service, therefore do they mean the statutory minimum or do they mean more. The employee can not therefore have been in a position to give contractual consideration to said clause. If on the other hand they had reference statutory redundancy notice periods i.e. notice period under redundancy will be pay in accordance with statutory redundancy notice periods, that would be a different story! As it stands the clause is not an express term as it fails to state what the notice periods and there is not indication the employer defines reasonable notice as being inline with the statutory minimums. Also during the consultation period it was maintained the notice pay would be 3 months. So the process was unfair, as people had been mislead as to their entitlement, not only that others have previously been paid the 3 months notice, therefore their is evidence that the employer defines "reasonable notice" as being the contractual notice period, plus the OP would as a result of others being paid contractual notice period have a case under customary practice, as its clearly customary to pay the 3 months notice period!

Which conveniently leads in to another point in the reply:

While I appreciate you explained your view so clearly, I find it curious that you would not accept that “reasonable notice” is a valid term, or that it’s too broad a term. I’d be surprised too if an employment tribunal ever suggested that notice of dismissal cannot be given with “reasonable notice”. Beyond what you've already said, do you have any legal reasons to support this position?

Stating "reasonable notice" alone without giving a clear indication as to what amounts to reasonable notice i.e. 1 weeks notice per year of employment up to a maximum of 12 weeks, allowing the employee to then calculate what notice they would get in terms of pay and duration (and therefore enabling them to give consideration to said term), makes the term invalid. For example, you can not under notice terms require an employee to give "reasonable notice" and not state what is defined as reasonable notice (in this case 3 months), in the event they want to resign. As how the hell is the employee to know what the employer will deem as reasonable notice? they won't as they have no way in which to calculate how much notice they are required to give. Therefore how can the employee have been able to give consideration to such term if they can not calculate what the effect of said term would have, should they want to resign? They can't!! And if you can not give consideration to a term, then the term is invalid or an unfair term.

My (contrary) views are probably because the Judicial Committee of the Privy Council found that to be exactly what was required in law: in the case of Reda v Flag Ltd, their Lordships actually stated that “Most contracts of employment are of indefinite duration and are accordingly terminable by reasonable notice in the absence of express provision to the contrary.”, so I do suspect the term approved by the JCPC would not in fact be too broad a term, but would instead be a valid term for an employment contract – even though it gives no clear indication as to what would amount to reasonable notice. Therefore, personally I would think what the JCPC say should at least be implied in an employment contract would still be valid if included as an express term – as it was in this case/contract.

A case of two directors dismissed and paid compensatory payments of $300,000, where the company had a clause allowing them to dismiss them with or without course (not possible here in the UK. Its a case from Bermuda, and whilst the privy council agreed with the outcome, its got nothing to do with this case and is not even close to similar. The privy council agreed that because the employer had power to terminate with or without course and no requirement for reasonable notice could be implied given the express term allowing for termination of the fixed term contracts. Basically their contracts, allowed them to be dismissed with or without course, on the condition of a compensatory payment being made. the decision to dismiss them was made by the board. Sorry but i do not see how this case involving company directors voted out by the company board, where their contracts give them the authority to dismiss with or without course (something not even remotely possible to do when dismiss employees with more than 2 years service, unless you what to see a claim for unfair dismissal) has any bearing on the OP's case! The case above is from bermuda, and not based on UK employment laws as most employees employment is, but based company law!

(Just an opinion though, I don’t assert that it is definitely a valid term, and respect (even if I don't agree with) your view that it is too broad.)

Karl Limpert

See above

Don't worry, i know its just an opinion based on your own knowledge or interpretation. But there's more to this than just having the words "reasonable notice" in a clause! I have hinted at some other issues that the employer may fall foul off above too.

Also laws of estoppel may come in to play i.e. they have said throughout consulation that 3 months notice pay would be paid, now at the end of consultation they are saying only 4 weeks will be paid to the OP. Estoppel prevents them from going back on what they have already agreed to pay. For example, estoppel precludes "a person from denying, or asserting anything to the contrary of, that which has, in contemplation of law, been established as the truth, either by the acts of judicial or legislative officers, or by his own deed, acts, or representations, either express or implied"

Estoppel can be understood by considering examples such as the following:

A city entered into a contract with another party. The contract stated that it had been reviewed by the city's counsel and that the contract was proper. Estoppel applied to estop the city from claiming the contract was invalid.^[11]
A creditor unofficially informs a debtor that the creditor forgives the debt between them. Even if such forgiveness is not formally documented, the creditor may be estopped from changing its mind and seeking to collect the debt, because that change would be unfair.
A landlord informs a tenant that rent has been reduced, for example, because there was construction or a lapse in utility services. If the tenant relies on this statement in choosing to remain in the premises, the landlord could be estopped from collecting the full rent.
AND AS PER OPS CASE - Employer during redundancy consultations had promised throughout that 3 months notice pay would be paid on top of the redundancy pay - Estoppel prevents the employer from changing there mind and paying less than what they originally said would be paid!

By offering 3 months notice pay during the consultation period, which was clearly accepted by the employees facing redundancy they have ineffect created a verbal contract, that is binding and would supersede the clause containing "reasonable notice"!

Also as others in the past had been paid 3 months notice, therefore its customary practice for the employer to pay redundacy notice of 3 months.

Also the reasonable notice clause is an implied term, and the employer most pay the greater contractual notice period and not the lesser one as hinted at by the OP in their original post!
[MENTION=67649]matt3942[/MENTION] - You will notice in the OP's original post ACAS have said they must pay the 3 months notice period. And the OP even made reference to case law to support that they most pay the greater notice period!

**matt3942** · 17th July 2015, 12:27:PM

Re: URGENT Advice Needed - Reasonable Notice Clause

Hi [MENTION=19071]teaboy2[/MENTION] - I did say in my first reply to the OP that he/she should pursue the ACAS route. My only point was that the contract term is very clear that the 3 months' notice won't apply in cases of redundancy - so that can't be used to argue that the OP should get 3 months' notice. However, I agree the fact the OP has been consistently told otherwise will go in her favour.

- Matt

**Employment Law Clinic** · 17th July 2015, 14:41:PM

Re: URGENT Advice Needed - Reasonable Notice Clause

The crux of the debate here seems to be:
1. what was the notice period; and
2. could the notice period simply be “reasonable notice”, or would such a clause be invalid?

Teaboy argues that “reasonable notice” is not a valid clause, and goes so far as to suggest that someone couldn’t possibly agree with such a clause. But the OP did agree with the clause, it’s in their contract of employment, the contract they’ve accepted & been working under for nearly 4 years now!

In terms of ability to agree with something unspecified, if a contract says you’ll receive an annual bonus of 5% of sales, it doesn’t specify what the annual bonus will be (and no-one can foresee what the sales figures will be), but it would be expected that there would be an annual bonus of some financial value. Or if a contract said “we agree to review & increase pay every year”, it doesn’t specify by how much the pay will increase, only that it will. But still perfectly valid clauses, and I doubt (certainly hope) that no-one here would advise an employee that they wouldn’t have a claim if they didn’t receive a bonus/pay rise because these terms are not specific enough!

The clause was clearly in the contract, and it was the OP and her colleagues (not assisted by the manager & HR, so I can understand they would feel aggrieved) that didn’t recognise its presence or relevance, but that alone wouldn’t mean it shouldn’t stand or be relied upon.

And as I’ve already stated, “reasonable notice” is not only a reasonable term, the UK (not Bermuda) courts have implied this term exists in every employment contract, so I maintain (as do the UK courts) that it is an acceptable term to have in a contract.

There is also the question of the principal of estoppel.

Originally posted by teaboy2 View Post

AND AS PER OPS CASE - Employer during redundancy consultations had promised throughout that 3 months notice pay would be paid on top of the redundancy pay - Estoppel prevents the employer from changing there mind and paying less than what they originally said would be paid!

By offering 3 months notice pay during the consultation period, which was clearly accepted by the employees facing redundancy they have ineffect created a verbal contract, that is binding and would supersede the clause containing "reasonable notice"!

My problem with agreeing with this argument is that the employer has not promised 3 months’ notice pay, and it has not amended the terms of employment; it has a written agreement with the OP, and that’s the terms it’s standing by. It’s true that individual employees have expressed an opinion on what the notice pay would be, but there is nothing to imply that the employer has either authorised these staff to change the terms of contract, or otherwise even explore negotiating changes. (And as the employer has not authorised these staff to amend the written terms it has with the OP, I would suggest vicarious liability would not arise either.)

Originally posted by teaboy2 View Post

Also as others in the past had been paid 3 months notice, therefore its customary practice for the employer to pay redundacy notice of 3 months.

Unfortunately we don’t know anything about the circumstances of the earlier staff dismissed, so can only speculate that the “reasonable notice” for them was deemed to be 3 months. It certainly doesn’t establish a customary practice (and I doubt this one occasion would ever be sufficient to establish a customary practice, regardless).

Originally posted by teaboy2 View Post

Also the reasonable notice clause is an implied term, and the employer most pay the greater contractual notice period and not the lesser one as hinted at by the OP in their original post!
@matt3942 - You will notice in the OP's original post ACAS have said they must pay the 3 months notice period. And the OP even made reference to case law to support that they most pay the greater notice period!

The “reasonable notice” clause is written into the contract: it’s an express term of the contract, not implied – unlike the implied term that colleagues comments expressing a view apparently (but I don’t agree) wrote into the contract, and Teaboy is clearly arguing should take precedent over the expressed term, contrary even to the OP’s views on implied & express terms. A most confusing position to adopt.

Karl Limpert

**Employment Law Clinic** · 18th July 2015, 01:31:AM

Re: URGENT Advice Needed - Reasonable Notice Clause

As I acknowledged in my first post on these boards, my etiquette has been poor, not only jumping in without any sort of “hello”, let alone an introduction, but I would appear in the process to be challenging the assertions of one of the community’s established & respected members.

I am sorry about that, but alas, as a tidying-up exercise, I feel I must clarify a couple more points for the benefit of anyone that stumbles across this thread in the future (and in the process, challenge once again an assertion that has been vehemently made).

First of all, there has been mention in this thread to s86 of the Employment Rights Act (this is the legislation that sets down the minimum notice period that applies to employment contracts). There’s a [edit: clarifying the context] common misunderstanding that sometimes arises with this piece of legislation, and that is when dismissal is either within the first month of employment (the legislation is silent) or during probation.

For dismissal within the first month of employment, the law – case law, as decided by the courts – states that notice of dismissal has to be “reasonable” (see the above mentioned case – Reda v Flag). What this actually means is that if, for example, someone has worked for four weeks (but the same goes for four days), they cannot normally be dismissed without notice, but at the same time, they haven’t accrued the right to the legislative minimum of a week’s notice. Ergo, the correct policy is to adopt a "reasonable notice" period, typically somewhere between no notice & a week's (although it could still be more in some circumstances). What that figure might be is subjective to the individual employment, but rarely would it be no notice at all – although the value of any notice would often be minimal, and therefore in most cases not worthy of pursuing if no notice was given.

The other issue is the focus of debate in this thread: whether “reasonable notice” is an acceptable term to include or infer in an employment contract. I just want to kill this debate off, as it’s not the ideal way to start contributing to a forum.

Reda v Flag, a judgement of a very senior UK court, is & has been widely accepted in employment & other courts. Technically, I don’t believe it’s a binding judgment (the way the UK courts bind or don't bind legislation can be confusing, and in this case, it was a judgment reached by the Judicial Committee of the Privy Council, a judgment that applies to Commonwealth law, but not necessarily the UK - although it would then be what is known as persuasive: a less senior court would normally follow the views expressed, although not legally obliged to follow it). The court is just about as senior as the Supreme Court though, and its opinions are widely accepted where a general view is expressed - as it was in Reda v Flag (at least for reasonable notice periods, but also other opinons expressed in that judgment), but equally I don’t know of a court that has ever felt anything but persuaded by it – in every judgment I have ever read, they have all accepted the views therein as an appropriate authority (although I could be proved wrong, as I doubt I’ve read every case that relied upon this case law).

But it’s not just case law that suggests this term is acceptable: the Companies Act 2006 uses the exact term “reasonable notice” in section 189 (in this instance, in relation to employment contracts specifically for directors, but another example that the phrase, while vague, is actually acceptable as a term – it’s good enough for our legislature, so I doubt the courts could argue it’s too vague):

Originally posted by Companies Act 2006, s189

Directors' long-term service contracts: civil consequences of contravention

If a company agrees to provision in contravention of section 188 (directors' long-term service contracts: requirement of members' approval)—
(a)the provision is void, to the extent of the contravention, and
(b)the contract is deemed to contain a term entitling the company to terminate it at any time by the giving of reasonable notice.

Karl Limpert

**teaboy2** · 18th July 2015, 05:24:AM

Re: URGENT Advice Needed - Reasonable Notice Clause

Well i do not agree at all. I suppose restrictive covenants are valid terms too just because they are in the contract regardless as to how broad they are, as that is what your saying basically. Contract law doesn't work like that. The example you gave, where the clause would be the employee would get 5% of sales, well yes that would be valid, as the employee knows they would get 5% of annual sales so at the end of the sales period they can work out what that 5% is using the total for the years sales. Yet there is nothing the employee can use to work out what amounts to "reasonable notice" unless the contract provides details as to what "reasonable notice" is i.e. week per years services up to a total of 12 weeks.

The case law you referred to was a Bermuda case, whilst judgment was given my judicial review by the privy court (a UK court) it was heard based on Bermuda/commonwealth law as per you say. Not only that they were directors, under company laws, directors can be dismissed with or without cause, they were not given any notice and were instead compensated to the amount of $300,000 each. They argument was that they were basically wrongly dismissed! Any company that has a board can dismissed company directors and terminate their contracts! Its not the same as dismissing your everyday employees and not in my view relevant to the OP's case!

The only reason "reasonable notice" is acceptable in regards to directors dismissals, is because its there in black and white and therefore allowed under statutory law. But that is for company directors only, there is not term "reasonable notice" under notice periods for terminating employment contracts by way of giving notice, nor is there such a term for redundancy notice periods, as both parts of the legislation instead state a statutory minimum period! If an employment contract gives more notice than the minimum for notice required to terminate, then that is the notice period that must be given when making redundancy unless there is another term specific to redundancy notice periods that defines the duration of the redundancy notice period i.e. 1 week per years service up to 12 weeks. If such redundancy notice term doesn't define what the duration of notice is then the notice period reverts back to the notice period given to terminate the employment contract, in this case 3 months - Which is precisely what ACAS has stated to the OP!

As it merely states "reasonable notice" and nothing else in terms as to duration of notice under redundancy, then one only has to look at the notice period required to terminate the contract i.e. 3 months, to determine what the employer deems as reasonable notice period! Which basically makes the clause we are debating a waste of ink, and not even required to be in the contract.

I think your mixing what is permissible under company law, in regards to directors, with the contractual rights of employees who's contracts not covered by company law!

In regards to notice periods given to earlier staff redundancies, the OP has pointed to this in the original post of this thread - So yes we do know they were given 3 months notice period in past redundancies!

Regarding Estoppel - But they did promise 3 months notice pay, as that is what they were told they would get by the employers representative (irrelevant whether they are an employee of 3rd party) that was chairing the consultation meetings/period! There is no suggestion the chair amended any terms are at all, as it is clear the employer had paid 3 months notice in previous redundancies and its clear the notice period is 3 months in the contract of employment!

Also "reasonable notice" may refer to what is normal for someone of a similar seniority in your industry sector or what similar employees have been given in past redundancies/dismissals, and reasonable notice is an implied term, and only comes in to effect if no notice period, statutory minimum or greater, is included in the written contract.

The OP even referred to a case that supported the view that 3 months notice should be given. Unfortunately they did not provide details as to said case for us all to look at!

**Employment Law Clinic** · 18th July 2015, 12:26:PM

Re: URGENT Advice Needed - Reasonable Notice Clause

Originally posted by teaboy2 View Post

The case law you referred to was a Bermuda case, whilst judgment was given my judicial review by the privy court (a UK court) it was heard based on Bermuda/commonwealth law as per you say.

The origins of the case have no relevance to this debate. The court expressed a clear opinion on what should be implied into every employment contract – that termination of the contract should be subject to “reasonable notice” – and that opinion is now deemed to be the law on minimum notice for dismissal in the UK, and the judgment has been accepted as an authority in many UK employment law cases.

Originally posted by teaboy2 View Post

Well i do not agree at all. I suppose restrictive covenants are valid terms too just because they are in the contract regardless as to how broad they are, as that is what your saying basically.

Restrictive covenants can, and often are, valid terms. The decision in any individual case is for the courts to decide – just as what actually classifies as “reasonable notice” is something that only a court decides.

Originally posted by teaboy2 View Post

Well i do not agree at all.

The only reason "reasonable notice" is acceptable in regards to directors dismissals, is because its there in black and white and therefore allowed under statutory law. But that is for company directors only, there is not term "reasonable notice" under notice periods for terminating employment contracts by way of giving notice, nor is there such a term for redundancy notice periods, as both parts of the legislation instead state a statutory minimum period!

I think your mixing what is permissible under company law, in regards to directors, with the contractual rights of employees who's contracts not covered by company law!

The debate here is whether “reasonable notice” could be a valid term. Teaboy, you suggested that it would not be a valid term, and still do not agree at all. In turn, I have highlighted why I believe it would be (and is) a valid term: because the courts have said so (in black & white), and because even Parliament is willing to use such a term to be implied into employment contracts.

Originally posted by teaboy2 View Post

In regards to notice periods given to earlier staff redundancies, the OP has pointed to this in the original post of this thread - So yes we do know they were given 3 months notice period in past redundancies!

Regarding this point, the previous 3 months’ notice for redundancy, for all we know these staff could have been in employment for 12+ years, in which case they would get that sort of notice as a minimum. Doesn’t alter the contract for the OP though, which states that notice is to be “reasonable”, a subjective term that only a court could rule on what is appropriate.

Karl Limpert

**teaboy2** · 20th July 2015, 11:12:AM

Re: URGENT Advice Needed - Reasonable Notice Clause

As i have said, i do not agree with you that such a clause is valid, especially when their is a term for notice period of 3 months, when thats the notice period paid to others previously made redundant, when the 3 months notice is greater than an UNKNOWN duration of "reasonable notice" amounts to at time of contract being signed (therefore consideration can not be given too it), since the clause didn't state what the duration of notice would be. And of course due to every other reason i have pointed out.

As for the case law you referred too - It has effect on company law and directors, not on your run of the mill employees who are not subjected to company law!

Its not just me that disagrees with you, but ACAS too. Plus there is case law that the OP referred too to which we don't yet know as to which case, that would suggest your wrong too.

I don't see any point debating the matter further as its not helping the OP here, who i hope takes ACAS advice that it is 3 months they are entitled to as notice!

URGENT Advice Needed - Reasonable Notice Clause

URGENT Advice Needed - Reasonable Notice Clause

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