The date identified by a Tribunal to be the effective date of termination (EDT) of an individual’s employment can be of real significance in determining whether an individual is entitled to bring a claim or not, because both length of service and time limits are calculated by reference to the EDT. In circumstances where a contract is terminated without notice, the EDT is the date on which the termination takes effect. Where a contract is terminated on notice, the EDT will be the date on which the notice expires.
In the recent case of Horwood v Lincoln County Council, the Employment Appeal Tribunal (EAT) had to decide whether the employee’s termination date was the date of her resignation or whether it was a later date notified to her by the employer instead. If the EAT were to find that the EDT was the date of her resignation then her claim of constructive unfair dismissal was out of time (by a day).
Mrs Horwood resigned from a position at Lincolnshire County Council after an unsuccessful appeal against a final written warning and demotion. She sent a resignation letter to her employer on a Friday, where it was opened by administrative staff and date-stamped.
The following Monday, the letter was read by a manager at the Council and on Tuesday the Council responded saying that her resignation was accepted and that it would take effect that day. Later correspondence also referred to the Claimant’s end date as being on the Tuesday. This was not challenged by the Claimant at the time and indeed Mrs Horwood (and the Council) then proceeded on the basis that her employment had ended on that later date. For example, Mrs Horwood was paid up to and including the Tuesday; and her pension commenced only from the day after.
The EAT found that Mrs Horwood’s EDT was in fact the earlier date, the Friday, and so Mrs Horwood’s claim was out of time.
This is an interesting decision - you may recall the Supreme Court case of Gisda Cyf v Barratt, which dealt with whether an employee was within the relevant time limits to bring her claim when she had been dismissed by the employer by post (rather than the case turning on a resignation). In that case, it was found that where the employer summarily dismisses the employee by letter, the employee’s EDT is when the employee actually reads the letter, or when he or she has a reasonable opportunity to read it. It was not the date of posting or delivery of the letter, for example.
It is therefore apparent that there is a difference of approach in identifying an employee’s EDT according to whether there has been a stated dismissal by the employer or a resignation by the employee. This is because the primary purpose of the legislation is the protection of employee’s rights. So, where an employer summarily dismisses an employee, employees need to know that have been dismissed before they can be expected to take action within the time limits required by the legislation. Conversely, where an employee resigns, employers need to have certainty as to whether the contract is at an end. There is no requirement at law for an employer to formally accept an employee’s resignation. What is important is effective communication, which does not require the letter to have been read, or for the employer to have had a reasonable opportunity to read it.
In Mrs Horwood’s case, then, it did not matter that the letter had not been read, the fact that it had been opened and date stamped was enough for the resignation to have been communicated. The EAT cited other cases wherein communication by an employee in the evening by fax, outside normal business hours, was sufficient for the EDT to be fixed that day.
An alternative argument put forward by Mrs Horwood was that even if the EDT was found to be the Friday, then it was subsequently varied. The EAT disagreed with Mrs Horwood on this too. Although case law has shown that it is possible to agree a different EDT, those cases were in circumstances where the parties have agreed an earlier termination date during the notice period, for example. This was very distinct from Mrs Horwood’s situation - she had communicated her resignation in unambiguous terms and with immediate effect, and it had already passed - so she was fixed with that date. By the time that the Council sought to impose a new termination date (the following Tuesday), the employment relationship had already ended.
By way of summary, if an employee resigns with immediate effect in writing, the EDT will be the date on which they hand in the letter or fax or email it; where the resignation letter is by post, the EDT will be the date on which they would anticipate their letter arriving in the normal course of post (i.e. the following day, for first class post).
For dismissal cases, on the other hand, employers should be reminded that the same, simpler, rules do not apply. For an employer to be sure that employment is terminated on a particular day, it is much safer for the employer to communicate a summary dismissal in person, with a follow up confirmation in writing.