24th September 2009

INFORMATION
UPDATE

 Issue No.  2009/19

 Sentient
              

 

  Effective Date of Termination of Employment

Determining an employee’s effective date of termination (“EDT”) is important for two reasons: 
  1. An Employee who wishes to raise a claim of unfair dismissal, for example, must present their claim within 3 months from the EDT; and
  2. The EDT enables the Employee’s length of service to be determined accurately.
The EDT is the date on which an employee's notice of dismissal expires or if he is dismissed without notice "the date on which the termination takes effect".  If he is on a limited-term contract, such as one for a fixed term, it is the date on which the limited term comes to an end without being renewed.
 
Generally speaking, it is easy to determine the EDT within the above definition but it can be more difficult if the dismissal is communicated by post instead of verbally.  Is it the date the letter is sent, delivered or read?
 
A recent Court of Appeal decision throws new light on this issue.  The case concerned an employer who had informed the Employee of her summary dismissal for gross misconduct by post with a recorded delivery letter. The letter had been written and posted on the 29 November, and was delivered the following day.
 
If the EDT was 30th November, the day the letter was received, this meant that the Employee had (3 months) until 28th February 2009 in which to register her claim for unfair dismissal.  However, the Employer registered her claim on 2nd March and the Employer argued that the claim was out of time.
 
The Employee did not open and read the letter until 4th December, and argued that the EDT is the date the letter was read which meant the claim was presented within the 3 month time limit.
 
The original tribunal and the Employment Appeal Tribunal had both ruled that the complaint had been made within the prescribed time limit. The Employer appealed these decisions.  The Court of Appeal have now ruled in the employee’s favour, that it is neither when the letter is sent, or received but when it is actually read by the recipient.
 
In light of this decision, Employers need to act with caution: 
  1. If the Employee is dismissed by letter immediately before acquiring 12 months service (and the right not to be unfairly dismissed), the Employee could delay reading the letter and thus delay the EDT such that they do have 12 months service.  They would then have the right not to be unfairly dismissed.
  2. If the Employee delays reading the letter then the Employee will technically remain an employee up to the date that is finally established as the EDT. This renders the Employer liable for salary/wage and any accrued holiday pay for the period up until the EDT.

Comment
The practical implications of this judgment are important.  Whilst we may be forgiven for believing it is yet another example of the courts being unaware of reality, the decision cannot be ignored.

We are not sure how an Employer, or Employee for that matter, can prove the date the letter was opened and the dismissal letter read. The presumption is that the Employee will need to open the letter in the presence of an independent witness; which is clearly an unworkable solution.

Alternatively, the dismissal letter could be sent by email, with a read receipt request – the Employer will then get proof the email has at least been read (again – not foolproof as we can predict the argument – “someone else read the email, not me”!!)

To avoid uncertainty in this respect Employers should either reconvene the hearing to confirm the decision to the Employee face to face and follow up with written confirmation OR at the very least confirm the outcome by phone and again follow up with written confirmation.  The date of the meeting or the phone call becomes the EDT in a case of dismissal without notice.  If you rely on postal confirmation then a phone call can also establish the date the letter was read.

Obviously it is in the employers interest to establish an EDT as early as possible so giving the shortest possible time window for ex-employees to register a claim at Employment Tribunal.

 

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