Household staff in the context of probate: part one – employment
Insight
Many high- and ultra-high-net-worth individuals have a variety of household and other staff; for example, “in-house” professional advisers, housekeepers, gardeners and carers. But what happens to those arrangements when the individual dies, and what can be done to preserve confidentiality and minimise the risk of loss to the Deceased’s estate? This briefing note considers those issues, with a focus on matters of employment law. It is the first in a series of briefing notes, and our second briefing note will consider the traps and pitfalls to avoid from a property law perspective when the Deceased’s staff have the right to occupy any residential property of theirs.
Background
The administration of an estate, or probate, is the process whereby the Personal Representatives (PRs) take control of the Deceased’s assets, settle tax and other liabilities and distribute the remaining assets in accordance with the terms of the Will (or the intestacy rules if there is no Will).
Generally, the PRs step into the shoes of the Deceased in relation to contracts entered into by the Deceased during their lifetime. There is, however, specific legislation that applies to staff who qualify as employees, and it is important that PRs take their responsibilities seriously to ensure that the employment process is managed legally, sensitively and in accordance with their fiduciary obligations to the beneficiaries of the Deceased’s estate.
PRs should, of course, also take seriously their responsibilities to any staff who are not employees, although the rules are different and are beyond the scope of this note. The same applies to employees whose contracts are with the Deceased’s family office or other family members, as they may still need to be updated as a result of the Deceased’s death.
No employment contract?
It is worth pointing out that if someone worked for the deceased, but there is no written employment contract, they could still be an employee (and have the enhanced rights that go with that) depending on the circumstances. This is a particularly complex area of law.
If PRs find themselves in a position where it is unclear whether someone is an employee or not, they should seek legal advice.
What happens to the employees?
Automatic redundancy
When an employer dies, the law provides that their employees’ contracts automatically terminate by way of redundancy. If the employee in question has more than two years’ service, the PRs must pay the employee ‘statutory redundancy pay’ from estate funds, as well as any unpaid wages and holiday pay. The amount of statutory redundancy pay is calculated based on the employee’s age, length of service, plus a week’s pay which is currently capped at £700. The total maximum statutory redundancy pay is currently capped at £21,000.
It is important to note that other some potentially useful terms of the employment contract will terminate upon redundancy, such as those relating to confidentiality. Therefore, it may be worth asking the employee to agree to such terms again, via a settlement agreement. This would most likely require the PRs to make an enhanced redundancy payment in return, but they may take the view that this would be a price worth paying.
Offer of employment
The PRs may not want the employment to end. For example, they want the employee to remain in the Deceased’s property for security reasons or they may want to avoid paying redundancy. In this context, the PRs could make a formal offer of employment to the employee within eight weeks of the employer’s death. This would avoid automatic redundancy and preserve continuity of employment. It would be sensible for the PRs to seek legal advice to ensure that a suitable offer of employment is made.
If the employee accepts the offer of employment, there is no redundancy and, therefore, the PRs are not obliged to pay redundancy pay. In fact, there is no dismissal at all, and the employee’s usual employment rights continue.
If the PRs make an offer (on the same or similar terms as the previous position) but the employee refuses it, their employment will terminate but they are likely to have forfeited their right to a redundancy payment.
Helpfully, the law recognises that when an employer dies there is often a period of uncertainty. So, if an employee continues to work after the death of the employer, under the direction of the PRs, this should not be taken as conclusive evidence that their employment had been renewed or that the PRs have re-engaged them. A formal offer of employment would need to be made to continue their employment.
The situation is less clear where a couple are the joint employer and one of them dies. We advise that you seek specific legal advice in this scenario.
Communication
It should, of course, go without saying that any communication with the employees of the deceased should be conducted in a sensitive and timely manner, as it is likely to be a very difficult time for all involved.
Conclusion
The immediate aftermath of a high- or ultra-high-net-worth individual’s death can be highly emotional, with many moving parts and complicated and urgent issues to be addressed. In addition to the above employment law issues, it is often equally important to consider i) whether the Deceased’s staff have any ongoing rights to occupy the Deceased’s residential property; and ii) how best to protect the estate’s position. Our second briefing note will cover those subjects.
Farrer & Co is here to help PRs navigate such sensitive situations, to ensure that everything proceeds as smoothly as possible. If employment advice is required, please contact Caitlin Farrar, Serena Nicholls or your usual contact in the Employment team. For wider probate advice, please contact Amy Newhall, Richard McDermott or your usual contact in the Private Client team.
This article is part of a series of insights. Read more below.
This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.
© Farrer & Co LLP, June 2025
