When is the Last Day of Employment not the Last Day of Employment?

The recent case of Horwood v Lincoln County Council is a salutary lesson to employees and their representatives and, perhaps, gives employers a crafty (if somewhat underhand) way of avoiding being sued. This case involved a long-standing employee of the Council who resigned by way of a letter dated 27th January 2010. The letter was posted on 28th January and was date stamped as having been received by the Council on 29th January. In her letter, the Claimant stated clearly that she was resigning in response to the Council’s fundamental breach of contract. As such, she stated, she did not need to serve notice and therefore her employment would be terminating immediately. She also told the Council that she would, in due course, be issuing proceedings for unfair constructive dismissal. The Council responded to the Claimant confirming that it accepted her resignation and stating that it would be treating the 2nd February as being the last day of her employment. It paid her up to that date.

In evidence given to the Employment Tribunal, the Council stated that it chose 2nd February purely for administrative purposes and both the Council and the Claimant confirmed that the date of termination had not been discussed by them prior to that letter having been sent.

The Claimant’s representative posted an ET1 on the Claimant’s behalf on 28th April 2010 and it was received by the Employment Tribunal the following day. The Respondent argued that the Claimant’s claim had been submitted out of time, the time limit for submission of unfair dismissal claims being 3 months from the Effective Date of Termination of employment (EDT), and that as such the Tribunal did not have jurisdiction to hear her claim. The last date for submission of the Claimant’s claim, it stated, was 28th April (i.e. three months from the date the Claimant’s resignation letter had been received by the Council) and not 1st May, as the Claimant’s representative was asserting. The Employment Tribunal agreed.

In his judgment, the Employment Judge addressed the issue of the EDT. He referred to the provisions of section 97(1) and section 111 of the Employment Rights Act 1996 and he identified the issues as being (a) When was the effective date of termination? and (b) Was it varied by agreement and, if so, what was the new date? He found that the EDT was the date that the Council receive the resignation letter, i.e. 29th January as the EDT operates as a matter of law and he found also that the letter purporting to vary the date was sent by the Council of its own volition and that there had been no agreed variation to that date between the parties. As such, he held, the EDT could only be the date that the Claimant’s unequivocal letter of resignation had been received. He went on to say that he could not allow an extension of time to serve the ET1 as it was plain that there was no extenuating circumstance which prevented the Claimant from being able to issue in time.

The lesson to be learned from this by Claimants and their representatives is obvious – be very clear of the EDT and ensure that any claim is issued well in advance of the time limit – preferably by e-mail or fax. However, a canny employer could use ambiguity in relation to the EDT to his advantage. Say, for example, an employee was to resign in similar circumstances to Mrs Horwood. A devious employer could do exactly as the Council did in this case and respond saying that it would be treating the termination date as being some time later, paying the employee up to that new date. It could then instigate settlement negotiations with the former employee, stating that it would like to resolve any potential claims amicably and without the need for proceedings to be issued. There would, of course, be no obligation on the employer to actually reach a settlement but it could continue to negotiate in the hope that the former employee would hold off issuing a claim whilst those negotiations were ongoing. Clearly, at some point, the employee would need to issue a protective claim to ensure he or she was in time to do so should the negotiations break down. However, hopefully, the decoy of the “new EDT” would mean the employee ended up issuing too late and having his or her claim struck out. This is clearly a devious ploy, is not guaranteed to work and is morally questionable. However, they say all is fair in love and war (and litigation) and who am I to argue?

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About Belinda Lester
I am the managing director and founder of Lionshead Law a specialist employment law and HR consultancy company.

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