Can a company refuse to give a contracted pay rise to an employee who have handed their resignation letter in? (UK)

Question

Employee A works for a company B. He had a contracted pay rise after finishing his probationary period, from £X to £Y per year. However, just before his probationary period ended, he handed in his resignation and began his 3 month notice period .

However, this means that for over 2 months in his notice period he was still paid £X by the company, instead of £Y.

If there's no mention of this in the contract, is there some UK law on which this is based?

The position is a full time contracted position (typical 9-5)

Answer 1

Can a company refuse to give a contracted pay rise to an employee who have handed their resignation letter in?

The company's refusal would constitute breach of contract because, as per the contract, the pay raise is premised only on the completion of the probationary period. The company should have included in the contract some clause to the effect of making the pay raise contingent on additional events.

For instance, some companies provide additional compensation such as stock options that vest on a specific date. Employers do that as an incentive for the employee to remain at the company. That is in contrast with a raise premised on the completion of a probationary period, of which the intent is to allow the company to validate that the employee is a good fit. Since the employee succeeded in that validation, he became entitled to the pay raise.

Answer 2

As described in the question the company's position is likely to be that the employee did not complete their probationary period, so their notice would apply to continuation or extension of their probationary role.

The employee would be in a better legal position (assuming they're after more money) if they had resigned just after the probationary period - and after receiving written confirmation that they had successfully completed it.

[Edit]

If Employee A has confirmation that they completed their probation, they would have good grounds for arguing that pay should be at the higher rate. If not, the employer would have had the option of agreeing they had completed probation, extending probation, or confirming that Employee A hadn't met the requirements and agreeing a time for them to depart. From the information we have, any of those might apply in this case.

A smart employer would have confirmed whether Employee A had completed probation and provided details of pay for the notice period in their acceptance of Employee A's resignation.

Answer 3

That would not be doable in germany - your timings would be way off.

Employee A works for a company B. He had a contracted pay rise after finishing his probationary period, from £X to £Y per year. However, just before his probationary period ended, he handed in his resignation and began his 3 month notice period.

In germany, you couldn't do it under the default times given by law. First of all, there's the notice period under BGB §622. Quitting during the initial probation has a legally prescribed notice period of 2 weeks under that paragraph. However, a firing for cause (BGB §626/BGB §627) or because of consensual parting with a separate contract to dissolve the other (Auflösungsvertrag) is immediate. During the (up to) 6-month probation period of a job, both parties can part just the 2-week notice. The moment you say "Thank you, I quit" or the employer says "thank you, you're fired" during that time, the contract ends 2 weeks later or the day agreed to between the two, whichever is longer.

If your probation was shorter than 6 months due to the contract (typical is 3 months), this typically means that the probation perion can (and would) be extended till the day you quit. The raises are then obviously not applied as they would happen after the end of probation and with the probation extended, that is after the notice period ends. They would only be applied if the notice period ends after probation has to end (or ended), possibly due to maximum probation period length of 6 months. However, the raise only applies for the time worked after the end of the probation period.

However, you might have a lot of trouble getting the 3 months you want to quit in: If you say that you quit in 3 months during the probation, the boss may counter with firing you under the prescribed legal probation notice period of 2 weeks as a reply. You'd be properly fired on that day, and only paid with the applicable wages and raises for the portion of the time worked.

Quitting right after the probation period carries a regulated notice period of 28 days (or to the 15th of the month) unless extended in contract, and contractual obligations like raises are required to be upheld. However, if your post-probation notice says "I quit in 3 months" the boss may counter with "No, you are fired, effectively in 28 days", unless the contract says the notice is longer. Again, the parties might agree to a separate contract to cancel the work contract immediately (Auflösungsvertrag).