attendance note
Client: The Joint Board of the United Kingdom School
Ref: 36215996
Date: 21 October 2009
Matter: Peter Jones (“PJ”)
George Rowland (“GWR”) attending John Cartwright (“JC”) [in person]
The company is a charitable organisation with a turnover of £17 million and profit of £3 million. The company structure is of a chairman at the top, with a Board and 8 senior managers under the Board.
The 8th manager is Peter Jones (“PJ”). PJ is the director of finance and Personnel. He has been in employed by the Board since 1980. His remuneration package includes a salary of £51,000 per annum, membership of company’s pensions scheme, and private health insurance. ( PJ’s employment file or contract of employment has to be seen. This information is provided by JC).
PJ made a huge contribution to the success of the Board in the 1980’s. He turned around the financial position of the company around.
JC was appointed as the Chief Executive of the Board in 1993. JC had doubts about PJ and took some responsibilities away IT and Administration responsibilities away from PJ. PJ never complained about the loss of his responsibilities. Now the company has separate managers for IT and Administration, who liaise with PJ. These arrangements have been place till now.
The Board has decided that they need a business review and want to increase profitability of the company. A panel has been set, which includes JC, Chairman of the Board ad the finance director. JC has drafted the terms of reference of the panel and it has been approved by the Board. Compass partnership (“Compass”) has been selected as the consultants to undertake the business review.
Compass has provided an interim report to the panel. And a recommendation has been made to remove PJ from his position as the director of finance. Compass has advised that the Board is over controlled and that a commercial director should be appointed. Compass has further suggested that the company increase its surplus by expanding.
JC stated that he fears PJ to a constraint. JC said that Compass has recommending what everyone has been feeling for sometime now. JC wrote a note to the chairman of the Board recommending that the Board should accept Compass’s recommendations. JC is not sure how PJ will react to the change. JC said that the Board wants to treat PJ fairly and generously. The Board is charity organisation but that doesn’t preclude it from paying compensation to PJ. GWR advised JC to act cautiously and not be overly generous.
GWR informed about two different types of remedies available for dismissal. One is Wrongful Dismal (“WD”) and second is Unfair Dismal (“UD”).
JC doesn’t know that PJ’s entitlement to notice is. ( we have to see his contract to advise the exact figure of entitlement).
JC was informed that PJ’s situation can be a possible redundancy situation on the basis of recommendation of Compass.
GWR inform JC that PJ will be entitled to the minimum statutory notice of 12 weeks. If the contract is silent on this matter, than PJ will be entitled to a reasonable notice. Reasonable notice at common law is usually 6 months. But PJ might try to argue 12 months. JC thought that PJ is likely to on a 6 months notice, as most of the executives are on it or less. GWR asked JC whether there are any internal precedents on this situation. JC said that recently a manager was dismissed after 18 months of service. The company settled for £35,000 against a salary of £35,000. It was amicable and the company continued to use her service.
GWR informed JC about wrongful dismissal. It was informed that a wrongful dismissal claim occurs when there is a breach of a contract and the principal remedy is damages. The object of damages is to put the parties in a position they would have been, had the contract been properly adhered to subject to the duty to mitigate. This usually means that the amount equal to the value of net wages together with any other benefits the they would have received.
JC said that the Board would want PJ to leave immediately. JC said that they are prepared to the deal with a variety of contractual schemes for redundancy. JC said that the contract of employment of PJ needs to be seen in order to further advise on this matter. JC was also informed that most redundancy schemes are statutory capped at around 12 months. A carefully worded compromise agreement should to drafted to deal with this matter.
JC said that the Board could contribute towards the legal costs.
GWR asks again for a copy of PJ’s contract of employment. JC said that he will pass the advise provided to the Chairman of the Board.
Contributed by Ali Ashraf Raza, LLB (Hons), Legal Practice Course- (Pro.Dip) (Nottingham), Associate at Bhandari Naqvi and Riaz.
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