The Employment Appeal Tribunal has confirmed that the effective date of termination of an employee who is summarily dismissed and then given notice will be the date of the summary dismissal and not when the notice expires.
When does a dismissal occur?
Under the Employment Rights Act 1996, an employee will be dismissed if their contract is terminated by the employer, with or without notice.
In assessing whether a dismissal has occurred, the tribunal will consider whether the employee’s contract has been withdrawn or removed from them and whether this has been communicated to the employee. For example, removing an employee from the payroll, issuing a P45 or ending the current post in order to offer a new position have all been found to amount to dismissals.
Although the employer’s conduct or words in terminating the contract does not have to be completely unambiguous, the tribunal will take into account whether an objective observer would consider the employee had been dismissed.
The Effective Date of Termination
If an employee was dismissed with notice, then the effective date of termination (EDT) will be the date on which the notice expires (as long as this notice is at least the statutory minimum).
However, if an employee is dismissed without notice, then the EDT will be the date on which the termination takes effect, i.e the date that the employee is informed they are dismissed. This is the case even if dismissal without notice is in breach of the employment contract.
The EDT is important as it is used to calculated a Claimant’s period of continuous employment and to determine the date from which limitation will run in cases of unfair dismissal.
As the EDT is a statutory concept, it is not open to parties
The Employment Appeal Tribunal has confirmed that the effective date of termination of an employee who is summarily dismissed and then given notice will be the date of the summary dismissal and not when the notice expires.
to agree that an alternative date applies. This was the case in Cosmeceuticals v Parkin, where a re-assessment of the EDT by the tribunal from meant that the Claimant’s claim for unfair dismissal had in fact been brought out of time.
Background
Ms Parkin was employed by Cosmeceuticals Limited, a manufacturer and distributor of skincare and makeup products, as a Managing Director from June 2009.
Following a period of poor performance, Ms Parkin agreed to go on a 2 month sabbatical to attend to some personal issues. During her absence, the company became further concerned about her performance and on her return to work on 1 September 2015 the company’s Chairman, Mr Sullivan, raised these performance concerns and told Ms Parkin she could not return to her role.
Ms Parkin was then placed on garden leave and on 29 September 2015 Mr Sullivan wrote to Ms Parkin “for clarity” giving her notice of the termination of her employment. The notice expired on 23 October 2015.
Ms Parkin then brought a claim for unfair dismissal in the employment tribunal.
At first instance, the tribunal found Ms Parkin’s dismissal had been unfair. Although there was a genuine belief that she had been unable to perform her role at the required level, she had not been given the opportunity to put forward her case as to the performance issues in question nor advised that poor performance could lead to her dismissal. Although the tribunal found Ms Parkin had been dismissed on 1st September 2015, it found the EDT was the 23rd October 2015.
Cosmeceuticals appealed to the Employment Appeals Tribunal (EAT) on the basis that the tribunal had committed an error in law in finding the dismissal took place on 1st September but the EDT fell on the later date.
Decision at the EAT
In response to her former employer’s appeal, Ms Parkin pointed to the fact that it had previously been agreed between the parties that the EDT was 23rd October. She argued Mr Sullivan had merely made the decision to dismiss on 1st September and there had been no finding that this had actually been communicated to her in the meeting on that date.
However, the EAT disagreed. Ms Parkin had been dismissed on 1st September as this was when her employer made clear to her that her existing contract of employment had ended, notwithstanding the later serving of notice upon her. It was therefore not open for the tribunal to decide the EDT was a later date than this.
Importance of getting the EDT right
The EAT’s decision is important because Ms Parkin had served her claim less than 3 months after 23rd October 2015 but more than 3 months from 1st September 2015, meaning that the tribunal changing the EDT to 1st September meant her claim was out of time.
This demonstrates how what can seem like an otherwise quite technical point can have significant implications. If the Respondent had determined the EDT was 1st September upon receipt of the claim they could have potentially avoided a full merits hearing by arguing at the preliminary stage the tribunal had no jurisdiction to hear Ms Parkin’s claims on the basis they were out of time. For Ms Parkin’s claim to now be considered, she will need to explain why it was not reasonable or practical for her to have brought her claim in time.
As this case demonstrates, it is essential that employers handle any termination of employment carefully and that clear records are kept of any meetings in the run up to dismissal so that the EDT can be accurately calculated.
For further information please contact a member of the Employment team.
