Termination in UK Law

It seems to me that there are differences between the two kinds of payment in dispute such that they fall on opposite sides of the line. Taking first the payment provided for in clause 5.15(a) which is the first part of the Termination Payment, this relates to sums which already constitute awards that have been made to the claimant under the FISS, albeit that under the arrangements governing deferral the money has been retained by the Bank and not yet released.

It is at the second stage that the Bank's argument in my view goes wrong. According to the Bank, the effect of paragraph 7(e)(i) of Schedule 1 is to make the claimant's entitlement to the payments to be given to him under the termination agreement conditional on his having refrained from issuing or pursuing proceedings against the Bank since the Termination Date (my emphasis).

I see nothing self-evidently logical about an arrangement of such a kind. Suppose, for example, that the Bank was in breach of the tax efficiency obligation during the period of the contract with the result that the claimant has suffered loss and has a good claim for damages.

Even if there was some implied term of good faith, it would not and could not circumscribe or restrict what the parties had expressly agreed in Clause 13.3, which was in effect that either of them for no, good or bad reason could terminate at any time before the term of four years was completed. That is the risk that each voluntarily undertook when it entered into the Contract, even though, doubtless, initially each may have thought, hoped and assumed that the Contract would run its full term.

In my judgment negative restraints agreed to apply after the termination of employment should not be equated with the primary obligations that are discharged when a contract of employment is terminated consequent upon repudiation. I think it at least arguable that, having regard to the subsequent development of this area of the law, not every restrictive covenant will be discharged upon a repudiatory termination of the employment.

Where the court considers that the period for which the employer is entitled to protection ends during the time for which the employee may be on garden leave, it will enforce the garden leave provision for that period, and will decline to enforce any enforceable post termination restriction.

(1) An employer gives proper notice of termination to his employee, tells the employee that he need not work until the termination date and gives him the wages attributable to the notice period in a lump sum. In this case (commonly call "garden leave") there is no breach of contract by the employer. The employment continues until the expiry of the notice: the lump sum payment is simply advance payment of wages.