To bring an unfair dismissal claim, an employee must file their claim within three months of their dismissal. So, when does a dismissal take effect if the employee is dismissed by letter? The Supreme Court has recently answered this question, stating that the effective date for these purposes is the date the employee reads the letter, not the date the letter is posted or delivered. This is a significant case, as it introduces uncertainty for employers about when a dismissal takes effect.

The facts

Ms Barratt was suspended from her employment for alleged gross misconduct. Following a disciplinary hearing on Tuesday 28 November 2006, she was sent home and told to expect a letter with the outcome that Thursday. Ms Barratt knew that she was at risk of dismissal and a letter summarily dismissing her for gross misconduct arrived by recorded delivery on Thursday 30 November. The son of Ms Barratt’s boyfriend signed for the letter, as Ms Barratt was away looking after her sister who had just had a baby. Ms Barratt did phone home while she was away, but did not ask about the letter. She had not left instructions for the letter to be opened or read in her absence, so it remained unopened and unread, awaiting her return. Ms Barratt returned home on Sunday night and opened the letter the next day, Monday 4 December.

Ms Barratt brought a claim for unfair dismissal on 2 March 2007. Given the three month time limit, Ms Barratt’s claim was only in time if the effective date of termination of her employment (“EDT”) was the date she opened the letter. If the EDT was when the letter was delivered to her home (as her employer argued), her claim would be out of time.

The decision

The Supreme Court decided that Ms Barratt’s EDT was the day that she read the letter. They felt that time should not begin to run against an employee in relation to an unfair dismissal complaint until they knew (or had a reasonable chance to find out) that they had been dismissed. The court acknowledged that there needed to be certainty about the EDT, but of greater importance (they felt) was the fundamental purpose of the unfair dismissal legislation, which was to safeguard and protect employee rights.

The court agreed with the first instance tribunal that Ms Barratt did not have a reasonable opportunity of reading the letter earlier than Monday 4 December. Although she had phoned home, the court felt she was not obliged to ask about the contents of the letter, and could not be criticised for wanting the letter to remain at home unopened, as the contents were private.

Impact

This decision is an important one for employers. It confirms that an employee’s EDT in summary dismissal cases is the date on which they actually learn of the dismissal (or have a reasonable opportunity of learning of it). This means an employer summarily dismissing an employee by letter cannot be certain of the EDT. The date will be outside their control and will depend on when the employee actually reads the letter or has had a reasonable opportunity to discover its contents.

The Supreme Court was careful to make clear that there might be a different outcome if an employee deliberately avoids receiving or opening the letter. However, in our opinion, this is likely to be difficult for employers to prove.

Recommendations

We anticipate that, in cases where they require more time in order to bring an unfair dismissal claim, employees may argue that there was a delay in them discovering a dismissal letter’s contents. To avoid this uncertainty, we suggest that summary dismissals should, if possible, be communicated face-to-face (and the dismissal letter handed to the employee at the same time). Alternatively, if a dismissal is communicated by post, the employer should telephone the employee to advise them of its contents, file-noting the conversation for evidential purposes. This will ensure that the dismissal has been effectively communicated and there can be no doubt as to the termination date for unfair dismissal purposes.

Bear in mind that different rules apply to contractual claims and it will always be sensible to confirm in writing any decision to dismiss that has also been communicated orally. Employment contracts will often limit the ways and circumstances in which they can be terminated. Terminating outside of those will be a breach of contract which can carry various consequences such as loss of post-termination covenants or even the argument that the contract has not been terminated at all: see the case discussed in our May Monthly Update - A timely dismissal.