Once again this quarter I am concentrating on just one subject, that of when a dismissal takes effect and looking at one case, before considering some practical implications.
The Effective Date of Termination
The date when employment comes to an end is sometimes of very great importance. Other than in certain specified cases, an employee can bring an unfair dismissal claim only if, at the “effective date of termination” (EDT), he has two years’ continuous service. If an employer has determined that the employee should leave and wants to avoid the risk of an unfair dismissal claim then he needs to be sure that EDT falls within the two-year period and not beyond it.
For these purposes, it is important for employers to remember that, in this context, two years actually means one year and 51 weeks. The reason for this somewhat perverse logic is contained in section 97 Employment Rights Act 1996 which provides that, for unfair dismissal purposes, the EDT shall be the last date of employment or, if the employer has given less than the statutory minimum notice provided by law then it will be the date when that notice would have expired, had it been given.
It is the statutory notice entitlement that counts, not the (often longer) period that is provided in the contract of employment.
After a month's continuous employment, the law states that an employee is entitled to a least one week’s notice of termination. That minimum period rises to 2 weeks after two years and so on, each year, to a maximum of 12 weeks.
Employers must remember that, in the circumstances described, allowance has to be made for that week so, in order for the dismissal to be effective within the two-year period, either full notice has to be given which expires before the two years are up or, if the employer is purporting to pay in lieu of notice, it must nevertheless dismiss at least a week ahead of the two year point, since the law will add that week back on.
A number of employers have been unaware this and purported to dismiss immediately, say, with pay in lieu of notice after one year and 364 days of service. Unhelpfully, by operation of law, that means that the employee will, at the EDT, have two years and six days continuous employment-enough to enable him to pursue an unfair dismissal claim.
In such cases, employment ends on the date specified, it is just that, for the purposes of calculating continuous service for unfair dismissal or redundancy entitlement, it is treated as having ended sometime afterwards.
Newcastle upon Tyne NHS Foundation Trust v Haywood
Sometimes it is of importance when precisely employment ends. The recent case of Haywood is a good example.
Mrs Haywood's contract of employment provided "this employment may be terminated [by the trust] giving you the minimum statutory period of notice as follows… 12 weeks."
On 20 April 2011 the Trust sent a recorded delivery letter to Mrs Haywood telling her that she was being made redundant and formally giving her 12 weeks notice of termination. It expired, the trust said, on 15 July 2011. The letter also placed her on garden leave for the period of her notice.
Mrs Haywood knew that she was going to be made redundant. In fact, the stress of the situation had caused her to take sick leave.
(Let us pause here to dispel the myth that an employer cannot dismiss an employee while the latter is on sick leave. He certainly can.)
It also so happens that, as the Trust well knew, Mrs Haywood was due to go on a week’s holiday to Egypt on 19 April.
Following delays, she actually arrived home in the early hours of 27 April.
While she was away, her father-in-law had called at her house and found the recorded delivery notification. On 26 April he collected the (unopened) letter of dismissal from the sorting office and left it out for Mrs Haywood’s return. She actually opened it on 27 April, after she had taken a nap.
When did the 12 week period of notice start? Was it, as the letter indicated, 21 April 2011? Was it the date when Mrs Haywood's father-in-law collected it from the sorting office on 26 April or was it when Mrs Hayward actually came home, or when she read it, on 27 April? More to the point, when did her employment actually end?
For reasons that will become clear later, the answer to this question was of some importance to the parties.
After a hearing before a High Court judge, the matter was taken on appeal to the Court of Appeal (CA), where it was heard by three judges.
None of the CA judges thought that notice could be “given”, until in some way it was “received”, either at Mrs Haywood’s address or by her personally. So that ruled out 21 April.
One judge took the view that notice was validly given under the contract of employment on 26 April, when the letter containing the notice actually arrived at its correct destination, whether or not Mrs Haywood was there to open it. He decided that the 12 week period started to run from the date when her father-in-law collected the letter from the sorting office and left it for her at her home.
The other two judges disagreed and, in the CA, the majority prevails. They said that 12 week period started to run when Mrs Hayward actually read the letter on the following day, 27 April 2011. That meant that her employment actually ended 12 weeks later, on 21 July 2011.
Why was this so important? On 20 July 2011, Mrs Haywood celebrated her 50th birthday. If made redundant after that date, she would be entitled to a NHS pension of about £200,000.
The prevailing view therefore (subject to what five or more judges in the Supreme Court might say, on further appeal) is that if you are going to give notice of termination then it has to be actually received. If the letter is delivered to the correct destination then this raises what is called a “rebuttable presumption” that the notice was received at that time. What is meant by a rebuttable presumption is that this is the date the notice is given, unless the employee can prove that she did not receive it then, but at some other time.
The judgement makes clear that the employee cannot just ignore the post or destroy it unopened and expect to rebut the presumption.
The judgement runs to 29 pages and 151 paragraphs. It is not always an easy concept for a layman to understand but this case is also an example of how the law is by no means black-and-white. Had other judges sat in the Court of Appeal then it is quite possible that the judgement would have gone the other way. Moreover, it is worth mentioning that the CA judges took a poor view of the judgment of the High Court Judge which “left much to be desired”. As every lawyer knows, not all judges are right all the time.
In one of my own cases recently, my client wanted to terminate the employment of an absent employee before the end of the two-year period, which was fast approaching. We calculated that timing, allowed some extra days for slippage, and then put in hand as many means as possible to ensure that the employee received (i.e. knew of) the notice of termination on the due date. Personal delivery, face-to-face, is best, although not possible in those circumstances. We therefore sent letters through the post and email and also a text advising the employee that the letter had been sent and, in essence what it said. It may well be that she feels that, somewhat callously, she has been dismissed by text message and of course that would not be an ideal way to learn that one has lost one's job. However, our priority was to ensure that she could not say that she was unaware that notice had been given to her.
You can read my commentaries on a couple of other recent cases in the blogs/news section of our website: http://www.qualitysolicitors.com/copleyclark/news
I look there at the Pimlico Plumbers case (where the employment status of one of their eponymous plumbers was considered by the CA) and also the Achbita case, which some tabloids have suggested is authority for the principle that an employer can safely ban Islamic headscarves in the workplace. (It’s not.)
As I write this, we have so far raised a total of £2583 for Cancer Research UK, in memory of our late friend and senior partner, David Pennar Jones. If you would like to help us reach our target of £10,000, please go to https://www.justgiving.com/fundraising/CopleyClark .
As always, these newsletters are only a guide to some changes in Employment Law. They are by no means exhaustive nor an alternative to getting proper advice about your particular problem. Expressions of opinion are to be taken as my own and do not necessarily represent the view of the firm. Please call me for more help on any employment matter.
With best wishes.
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