The Employment Appeal Tribunal (EAT) has determined a case that issues a cautionary piece of advice to employers: when ending an employee’s employment, be perfectly clear as to the date when that employment is actually ending.
In the case of Basra v BJSS Limited, the EAT was charged with determining when an employee’s employment had ended, following the original Employment Tribunal’s decision not to consider alleged pre-termination negotiations that were said to be protected by the rule under Section 111A of the Employment Rights Act (ERA) 1996 that protects certain exit negotiations where an employee’s only potential claim is that of unfair dismissal. In other words, this rule does not apply to protect an employer from liability for other claims such as discrimination or automatically unfair dismissal.
In this case, the employer had asked the employee to attend a disciplinary hearing. The employer then separately offered the alternative of a Settlement Agreement in a letter that was headed “without prejudice subject to contract”, but which simply stated that if the employee agreed he would be paid “3 months’ net salary in return for your employment ending immediately”.
The employee had responded by email shortly afterwards, writing that “I accept bjss’s 3 month notice offer subject to contract and without prejudice; today will be the last day at bjss”.
A dispute subsequently arose as to when the employee’s employment had ended, given that the employer had subsequently written to the employee almost two weeks later making it clear that it considered his employment to have ended, albeit inviting the employee to discuss this further.
When precisely had the employment ended? With the employee’s email stating that “today” would be his last day with the employer or with the employer’s second letter two weeks after the email stating when it believed the employment to have ended?
Although the employer had argued that the employee’s email was a resignation and the Employment Tribunal had considered that it was not entitled to consider the employer’s “without prejudice subject to contract” letter, given the otherwise unshakeable protection given to it by Section 111A ERA 1996, the Employment Appeal Tribunal found that the employer’s case failed on the point of deciding precisely when the employee’s employment had ended.
The Honourable Mr Justice Choudhury, deciding the case alone in the EAT, held that the original Employment Tribunal would not have made an error in its decision had it seriously considered the issue of the date on which the employee’s employment had ended. Had this been decided first, then the Tribunal could have purely concerned itself with whether the employee had resigned or had been unfairly dismissed.
However, as the Tribunal had not done this, it was decided that the Tribunal did not have the power to decide what evidence (i.e. the letter marked “without prejudice and subject to contract”) should be excluded regardless of the alleged protection granted to it by Section 111A ERA 1996.
The case was remitted to the original Employment Tribunal so that it could reconsider its findings after reviewing the employer’s original letter headed “without prejudice and subject to contract”.
The Basra case is an interesting one to read, particularly for employers who seek to rely upon the protection from claims for unfair dismissal afforded by Section 111A ERA 1996 where pre-termination negotiations have taken place or are ongoing.
Although it may seem an obvious point, it is worthwhile noting that an employer should enter into these negotiations with a clear idea of what it wishes to offer the employee whose employment it is hoping to end. Not the least of the terms of any settlement should be a precise date on which it is proposed for the employment to end, rather than attempting to rely upon vague wording.
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