Back in November we reported the case of Radecki v Kirklees Metropolitan Borough Council where the EAT held that the removal of Mr Radecki from the Council's payroll, even with his knowledge and arguably his consent, did not in itself terminate the employment relationship. Not until the employer's letter of 5 March 2007 was there a "sufficiently unequivocal statement" that could be regarded as terminating the employment relationship. That decision has now been overturned by the Court of Appeal which held that the removal of Mr Radecki from the payroll showed a clear intention to terminate his contract of employment.
Mr Radecki was a teacher who was suspended over concerns surrounding his skills and experience and relationships with other staff members. The disciplinary process was postponed whilst settlement was pursued and the parties negotiated a draft compromise agreement which stated that Mr Radecki's termination date would be 31 October 2006. Negotiations were concluded and the Council removed Mr Radecki from the payroll before a binding agreement had been made. Mr Radecki subsequently rejected the draft compromise agreement. The Council then wrote to Mr Radecki, on 5 March 2007, indicating that he had been removed from the payroll on 31 October 2006 and that his employment had ended on that date.
The question before the Court of Appeal in this case was whether the effective date of termination (EDT) was when the Council wrote to Mr Radecki stating that his employment had ended, or some earlier date when the Council had stopped paying Mr Radecki's salary.
The Court of Appeal held that an employer's fundamental obligation under the employment contract is to pay an employee's salary. There was no agreement to stop paying Mr Radecki's salary until the compromise agreement was executed and by stopping Mr Radecki's salary the Council breached the contract of employment to such an extent that further relationship was not possible between the two. As Mr Radecki was aware that his salary had been stopped, the EDT was the date on which the Council stopped paying his salary.