In the UK is there a material difference from an employee perspective? In the US, if you are fired with cause, the company can fight you on paying out unemployment. If you are terminated without cause, it typically doesn't matter what the reason was behind it--you're still eligible for unemployment.
Yes. In the UK at least, there are 3 forms of payment someone might receive:
- Unemployment benefits, paid by the state if they don't get another job straight away;
- Their usual salary during the notice period, or pay in lieu of notice if they are sent home immediately (common in IT for security reasons);
- Redundancy pay.
The last one only needs to be paid in the case of dismissal "without cause". However, it's not called that. Redundancy refers to the fact that the job doesn't exist anymore. E.g., because the office closed down as is happening at Skype London. You can't just sack someone on a whim and say it is "without cause".
Where things get a bit more complicated in a case like Skype/Microsoft is that they have an obligation to offer their existing employees new jobs elsewhere in the company if possible. This isn't an especially strong obligation, but it does make things awkward if they keep, say, 50% of the staff, because there needs to be some reasoning as to why they kept that particular 50%, which needs to be seen as fair.
I believe this works around some relevant labour laws.