The Court of Appeal has held that stopping an employee's pay while he was suspended on full pay demonstrated a clear intention to terminate his employment. The effective date of termination was therefore the date the employee's pay was stopped (Radecki v. Kirklees Metropolitan Borough Council).
At the time, the parties were negotiating a compromise agreement and Mr Radecki was suspended on full pay. Disciplinary proceedings against him were postponed while the parties sought to agree a negotiated departure. The Council issued a draft compromise agreement stating that the employee's employment would terminate by mutual agreement on 31 October 2006 and Mr Radecki was removed from the payroll on that date. However, the negotiations broke down and, in February 2007, Mr Radecki confirmed that he would not sign the agreement. The Council wrote to him on 5 March 2007, confirming his dismissal on 31 October 2006. Mr Radecki claimed unfair dismissal.
The EAT held that the Council had not terminated Mr Radecki's employment by removing him from the payroll and the effective termination date was therefore 5 March 2007 (the date of the letter confirming termination). The Court of Appeal overturned the EAT's decision and held that the employee's knowledge that he would not be paid from 31 October was sufficient to show that the employer had brought his employment to an end. Mr Radecki's claim was therefore out of time and could not proceed.
Impact on employers
- This decision reminds employers that it is important to clearly and unequivocally communicate a dismissal, particularly in cases where doubt could arise.
- Employers should take care when agreeing to put disciplinary proceedings on hold in the expectation that they will reach an agreement with the employee. When seeking to negotiate an agreed departure, an employer should impose a deadline for reaching agreement and be prepared either to cease negotiations or to continue them in parallel with the disciplinary proceedings.