In C.F. Capital PLC v Willoughby the Court of Appeal upheld the EAT's decision that an employee's suspicion that her employer had made a mistake in sending her a letter of dismissal did not prevent the clear, unambiguous words of dismissal from taking effect.
The employee's line manager told her that the company was experiencing difficulties and one way to avoid redundancies was for staff to become self-employed. The employee requested detailed written terms. She received a letter dated 22 December which contained an agency agreement and stated that her existing employment contract would be terminated from 31 December. After taking legal advice, she told the managing director that she did not accept the agreement. The manager wrote to her saying that there had been a misunderstanding and that if she did not wish to move to self-employment she could continue in her employment. But the employee maintained that she had been dismissed and lodged claims of wrongful and unfair dismissal.
There is a long-standing rule that neither employee nor employer can unilaterally withdraw a properly given notice of termination. But in practice there has been an exception: if words of dismissal or resignation are spoken in the heat of the moment then there should be an opportunity to withdraw those words. The Employment Tribunal relied on this "special circumstances" exception in finding that because the dismissal had been withdrawn as soon as practicable after the employers realised their mistake, she had resigned rather than been dismissed.
However, the EAT and the Court of Appeal said this was the wrong approach. The specific problem addressed by "special circumstances" cases is words spoken in the heat of the moment and then quickly retracted. The exception does not affect the rule that clear unambiguous words of dismissal are to be taken at face value. The letter to the employee was written under the mistaken expectation that the employee would accept the proposed self-employment terms. But instead, she accepted the notice as terminating her employment.