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Leaving aside what on earth is going on at Rangers Football Club these days, it will be interesting to see how the Ally McCoist situation plays out.  It has been reported that he has resigned from his post as manager of Rangers with a 12 month notice period worth £750,000.  The latest, as reported on the BBC on 17 December, is that the manager will remain in post, albeit still under notice.

Rangers presumably have the options available to most employers when an employee resigns with notice:

  1. Require Mr McCoist to work out his full notice period;
  2. Thrash out a new deal to keep him at the club;
  3. Place him on garden leave for all or part of the notice period (assuming there will be a garden leave clause in his contract);
  4. Pay up his full 12 month notice period and release him;
  5. Reach a settlement acceptable to both parties.

1. In most walks of life, not just football, keeping a senior employee in their role for the full notice period is unlikely to be an attractive option.  Just imagine the changing room morale.  It was not that many years ago that Sir Alex Ferguson openly announced his long term plan to leave Manchester United.  The detrimental effect on the changing room was immediate and that was when the proposed departure was not even contentious.  Although Ally McCoist remains in post for now, it seems improbable that that will remain the case for long – unless the latest move is designed to show that the relationship is still workable as a precursor to a new deal being negotiated.

2. Garden leave is all well and good when the employer has business interests to protect from a departing employee.  It is a very effective means of controlling key managers and keeping them away from your customers and competitors, but obviously at the cost of whatever salary is still being paid.  In the Rangers scenario, apart from possibly wanting to keep him away from Celtic, I imagine there is very little interest in preventing him from practising his trade elsewhere.  I imagine equally that Rangers will not want to pay £750,000 for the privilege.  Equally, Ally McCoist will presumably want to get back into management quickly – a lengthy period of garden leave won’t be an attractive option for either party.

3. I can’t see Rangers wanting to pay up the full notice period in advance either.  Yes, it gets rid of the problem of having a potential thorn in their side, but they will be well aware that Ally McCoist will want to move on quickly to promote his fledgling career elsewhere, so why pay up in advance when there’s clearly a deal to be done?

4. Which brings us to what is the most common outcome – an agreed settlement.  By making it clear they will keep Ally McCoist to his notice period, Rangers may be able to force a deal whereby they agree to release him so that he can fulfil his ambitions and go elsewhere in the New Year (and I imagine there will be no shortage of clubs interested in his services, and with deeper pockets than Rangers).  In turn, Rangers’ liability to him will come to an end.  For now, we can expect a public stand-off but that situation will quickly change as soon as another club expresses an interest in taking him on as their new manager.

Meanwhile, in the “real” non-football world, it is not uncommon for such a settlement to be reached fairly quickly and privately after an initial “fireside chat”.  How the resultant notice period is handled tends to be governed by business protection issues as much as anything.  It is also a well-trodden route for employers to embark upon (often sham) disciplinary procedures against departing managers in an attempt to avoid being bound by full notice periods.  However, if there are genuine conduct concerns, it is clearly in an employer’s interests to use them to drive an earlier (and cheaper) settlement.

For more information on this post please contact our Employment Law Team on 0161 930 5151