The former manager of Manchester United Football Club, David Moyes, was controversially sacked last month... Moyes was let go just 10 months into a 6 year fixed term contract, leading to interesting questions surrounding his employment rights.
The contractual position of a former manager should be considered first. It is highly likely, given Moyes had a fixed term contract, that his contract of employment will contain provisions relating to this situation. If so, the provision is likely to be a termination payment clause. It has been reported in the press that Moyes had a 12 month termination payment clause in place which supposedly equates to £4.5 million. In the unlikely event that there are no contractual provisions, then Moyes may be entitled to payment of his salary and any benefits for the remaining period of his contract.
Having considered the contractual rights of a former manager, their statutory rights should not be forgotten about. Employees with two years’ of continuous service can lodge clams for unfair dismissal. However, as Moyes does not have the required level of service, this is not something which is available to him. In any event, the unfair dismissal route is unlikely to be an attractive option for high-earners such as Moyes given that compensation for unfair dismissal is subject to a statutory cap. For dismissals after 29 July 2013 the maximum statutory compensation is the lower of £76,574 or 52 weeks’ pay.
Another option which may be available to former managers is a claim for breach of contract, or “wrongful dismissal”. Wrongful dismissal is a dismissal which is a breach of contract. Unlike an unfair dismissal claim, there is no minimum qualifying period of service required to bring a claim for wrongful dismissal. Furthermore, the fairness of the dismissal is not considered in wrongful dismissal claims as the sole issue is whether the terms of the contract, express or implied, have been breached. The maximum compensation in a wrongful dismissal claim in an Employment Tribunal is capped at £25,000. However, in the civil courts the compensation is potentially unlimited so this route is likely to be more attractive for a high-earner like Moyes.
Finally, it is always possible that a manager who has been dismissed makes the decision to internally appeal his dismissal, normally looking for the outcome to be reinstatement. The right to internally appeal a dismissal may be set out contractually or it may be included in an employer’s policy documentation. The terms of the appeal should be set out clearly within the timescale normally set by the employer. An appeal hearing should be set within a reasonable amount of time and the outcome will normally be confirmed in writing to the individual once considered.
Moyes’ next move will be interesting as nothing has been verified to date, despite reports of a 12 month termination payment clause.
For further information, please get in touch with Jennifer Tear or your usual contact at Murray Beith Murray.