In many cases, it will be relatively easy to determine whether or not an employee has resigned of his or her own volition or been dismissed. However, difficulties arise where a negotiated exit takes place in circumstances where the departure is inevitable. The Court of Appeal (overturning the EAT), found that an individual who had been invited to a meeting at which he was told that his employment would be terminated but who then managed to negotiate a more favourable termination package, had, indeed, been dismissed. The Court of Appeal judge highlighted that none of the earlier authorities found that there had been a resignation where the question of dismissal was first raised and termination of employment confirmed in a single interview. Resignation presumes "a genuine choice on the part of the employee" (Lord Justice Wall). Here, the employee had "no warning that the purpose of the meeting was to dismiss him; he had no advice, and no time to reflect". The employer had raised allegations of misconduct at the meeting and stated: "Your contract, we are going to terminate it". The employer sought to argue that the subsequent negotiations that took place at the meeting changed the dismissal into a genuine resignation by the employee. This didn't explain why the employer subsequently wrote to the individual stating "we hereby agree that we terminate your contract". If anything, it was surprising that both the ET and the EAT found that the employee had, in fact, resigned. The Court of Appeal's decision that he had been dismissed and that the negotiations were merely his attempt to salvage a situation where he faced certain termination, must be right. (Sandhu v Jan de Rijk Transport Ltd)
Presumably, the company could have avoided this litigation had the employee been persuaded to sign up to a compromise agreement accepting the additional compensation in full and final settlement of any claims that he may have. In the, perhaps, unlikely event that an employer is willing to pay ex gratia severance monies without obtaining a valid waiver of claims in return, the employer could protect its position by ensuring that the employee is fully aware of the purpose of the meeting, given an opportunity to consider any allegations against him and allowed time to reflect on whether or not to resign. Such actions would, of course, be good employment practice, in any event. The case pre-dated the statutory dismissal and disciplinary procedures so compliance with these was not relevant. However, the judge in this case was particularly unimpressed with the way the disciplinary matter was handled.