Dismissal: what is the official date of termination?

The law

According to section 97 of the Employment Rights Act 1996, an employee’s effective date of termination (EDT), that is the day their continuous employment comes to an end, is in most cases their last day of employment.  The Act sets out the circumstances where this date may be later.  The Act confirms that where the employee has been summarily dismissed, the employee’s EDT is usually the date of their dismissal. 

An employee can bring a claim in an Employment Tribunal if they have the necessary period of continuous employment and bring their claim within three months of the EDT (unless the statutory dismissal and grievance procedures apply). 

Background

The Claimant in the case of Radecki v. Kirklees Metropolitan Borough Council was suspended from his job as a teacher with the Council on 21 October 2005, over concerns about his skills and difficulties with other members of staff.  The Claimant was initially suspended on full pay.

The Claimant’s disciplinary hearing was postponed so a compromise agreement could be negotiated.  The agreement stated that the Claimant’s employment would ‘terminate by mutual consent on 31 October 2006’ and the Claimant was removed from the payroll system on that date.  The agreement was marked ‘without prejudice’ and ‘subject to contract’. 

The Claimant informed the Council on 22 February 2007 that he was not happy with the terms of the agreement.  The Council responded to this letter on 5 March 2007 by stating that it was unable to enter into further discussions with the Claimant as his employment had been mutually terminated on 31 October 2006 in accordance with the agreement and the fact that he was removed from the payroll system.  The Council stated that it had ‘acted in good faith on an agreement reached’. 

Tribunal claim

The Claimant lodged a claim at the Employment Tribunal on 7 March 2007, however, the Tribunal held that the claim was out of time as the Claimant’s effective date of termination was 31 October 2006.  The Judge found that on that date, the ‘fundamental basis of the [Claimant’s] contract was at an end’ as he was not being paid, he did not have to attend work (including a disciplinary hearing) and his place of work was not transferred.

The Employment Appeal Tribunal overturned this decision.  The Judge stated that he found ‘it impossible to uphold the Employment Judge’s decision on the basis that there was an agreement to terminate employment as from 31 October’ as the compromise agreement was marked ‘without prejudice’ and ‘subject to contract’ and therefore could not be relied upon.  In addition, there was no separate agreement by both parties that the Claimant’s employment would terminate once he was removed from the payroll system. 

Further to this, the fact that the Claimant was not attending work, did not have a disciplinary meeting and was not being paid were all consistent with the Claimant having been suspended.  Contrary to the Council’s assertion, the Judge stated that ‘it was by no means clear that all remaining elements of the employment relationship were severed’.  In the Judge’s opinion, there was no sufficiently unequivocal statement that the Claimant’s employment would be terminated, until the Council’s letter of 5 March 2007.  

On this basis, the Judge held that the Claimant’s ET1 was presented in time and that his claim should therefore proceed in the Employment Tribunal.   

Importance