Background
An employee must be "dismissed" in order to bring an unfair dismissal claim under the Employment Rights Act 1996 (ERA). Under section 95(1) ERA, dismissal occurs where the contract under which the employee is employed is terminated by the employer (whether with or without notice).
A claim for unfair dismissal must generally be brought within three months of the "effective date of termination" (EDT) although the tribunal has discretion to extend the time limit where it is satisfied that it was not reasonably practicable for the claim to have been presented in time. Section 97(1)(b) ERA provides that where the employee's contract of employment is terminated without notice, the EDT is the date on which the termination takes effect.
Previous case law has held that the EDT is separate from the principles of contract law. Therefore, it is possible for an employee's contract of employment to continue under contract law while simultaneously being deemed to have terminated for the purposes of an unfair dismissal claim.
Facts
M was signed off work for back injuries and it was agreed that he would not be able to return to his heavy manual night role. In January 2020, he had a telephone conversation with his employer ("Cyxtera") in which the issue of possible termination of employment and a settlement agreement was raised. Following a further conversation, M believed that Cyxtera would continue searching for alternative employment for him but Cyxtera did not make it clear that it would not.
On 5 February 2020, M was sent a "without prejudice" headed letter. The letter stated that the parties had agreed that M's employment would terminate by mutual agreement by reason of capability. His last day of employment would be 7 February 2020 and he would be paid salary to that date plus his outstanding holiday entitlement and payment in lieu of notice. The letter went onto offer him an ex-gratia payment subject to him signing the enclosed settlement agreement. The letter was received by M on 7 February and the payments transferred on 14 February. M made it clear to Cyxtera that he did not accept the termination of his employment.
M brought a claim for unfair dismissal on 19 June. If the EDT was 7 February, as contended for by Cyxtera, the claim would be out of time. The tribunal dismissed the claim at a preliminary hearing. It ruled that the EDT was 7 February and M had not shown that it had not been reasonably practicable for him to have presented his claim in time. M appealed the tribunal's decision, arguing that the letter did not properly dismiss him, and even if it did, the decision on the EDT being 7 February was wrong.
Decision
The EAT dismissed M's appeal
EDT
The EDT is set out in section 97 ERA and previous case law had established that the EDT is different from the contractual date of termination and that it is possible to have circumstances where the contract of employment remains live for contract law purposes but is terminated from an unfair dismissal perspective. Contract law principles have no bearing on the EDT.
Dismissal
The EAT considered that whether the letter of 5 January properly dismissed M was his strongest ground of challenge. However, this ground ultimately failed as it is a question of fact for the tribunal. The tribunal had applied the correct legal test when determining this point and its decision was not perverse.
Comment
This decision is a reminder that the date of termination of an employment contract for unfair dismissal purposes is a different test to when the contract is deemed to terminate from a common law perspective. The case also highlights the confusion and risk that may arise from setting out "open" and "without prejudice" correspondence in a single document. It would be best practice therefore to keep these correspondence separate.
Meaker v. Cyxtera Technology UK Ltd, EAT.
