If an employee’s employment contract contains a clause to the effect that the company may terminate an employee’s employment forthwith if they become bankrupt, would the dismissal be fair or unfair?
If there is no tangible effect on the employment relationship, i.e. the employee’s performance does not suffer, surely any dismissal action taken against an employee in such difficult circumstances without giving the employee an appropriate level of support, would be viewed as unsupportive and thus unfair?
Furthermore, if it is deemed unfair, this would entitle the employee to resign and submit a claim for constructive dismissal.
So, should we remove such a clause from employment contracts?
Kerstin Willis