by Joseph Bryan
Just before 8.00 pm last night, the FA released a statement that “The FA and Allardyce have mutually agreed to terminate his contract with immediate effect” due to “the serious nature of his actions”.
Allardyce himself said he was “deeply disappointed at this outcome”, while recognising that he made some comments which have caused embarrassment. He reiterated that his departure was “mutually agreed”.
This followed a day of talks between the two parties and presumably their legal representatives, which had been convened after the release of footage of the (now ex-) England manager made by undercover journalists.
The carefully crafted statements give little away, so what can we read between the lines as to the legal position?
When an employment contract is mutually terminated or the employee resigns, the employee cannot usually claim that s/he was unfairly or wrongfully dismissed. However, although the press releases state that Allardyce’s departure was by mutual consent, Allardyce’s own official version records his disappointment. In the eyes of the law, an employee who is told s/he has no future with the employer and is invited to resign may be treated as, in fact, having been dismissed.
Like any other employee, the England manager has the right not to be wrongfully dismissed (i.e. a claim for damages reflecting his wages over his notice period or, more likely, the remainder of his fixed term contract). So could Allardyce take the FA to court or an employment tribunal? There are two apparent obstacles. First of all, according to reports, the parties have signed a settlement agreement, which almost certainly bars any legal claims (see below). Secondly, in any event, the prospects of Allardyce succeeding on any wrongful dismissal claim are weak, if yesterday’s media reports are to be believed. This is because Allardyce’s alleged misconduct would, if proved, justify the FA terminating his employment with immediate effect, with no notice pay due, because it was so serious as to cause a fundamental breakdown in the relationship of trust and confidence at the heart of every employment contract.
Moreover, on the face of it, Allardyce cannot claim that the FA have infringed his statutory right not to be unfairly dismissed. Allardyce was only appointed in July and, by virtue of s. 108 of the Employment Rights Act 1996, employees must generally have at least two years’ service before they are entitled to make a claim for unfair dismissal. In short, Allardyce’s potential legal come-back against the FA appears to be slim to negligible in reality.
Potential claims aside, reports suggest that the FA and Allardyce have negotiated an out-of-court settlement. It is standard for such agreements to contain a confidentiality clause preventing either party revealing its precise terms. But these settlements typically provide for:
Certain newspapers are reporting this morning that Allardyce has received a “seven-figure pay-off”. While Allardyce might be unlikely to succeed on a wrongful dismissal complaint to a court or tribunal, the FA seems (if reports are correct) to have taken a commercial decision to offer him this sum, equal to around four months’ wages, in return for his consent to the terms of his departure. This has the added advantage to the FA of ensuring that the negotiated settlement has binding force of law since a contract must be supported by consideration.
Given the above, the legal formalities may now have been settled, but in anticipation of the inevitable media dissection during the forthcoming international break, combined with the FA’s hunt for a new manager, we can be sure that this story will continue to dominate the headlines. It would, though, be surprising if any legal action flows from Allardyce’s departure or if any severance package terms are publicised.