Drawing a line between dismissal and resignation
Sandu v Jan Rijk Transport Ltd (Court of Appeal – May 2007)

Mr Sandu was called to his employer’s head office for a meeting but was not told that it was to discuss allegations of misconduct. At the start of the meeting Mr Sandu was told, in so many words, that his contract was to be terminated. A dispute arose as to whether Mr Sandu was dismissed or whether, as Jan Rijk Transport maintained, he resigned after negotiating severance terms at the same meeting.

The Employment Tribunal found that Mr Sandu had resigned and his appeal to the Employment Appeal Tribunal was unsuccessful. The Court of Appeal, however, held that Mr Sandu had not resigned. He had no warning of the purpose of the meeting, and in any severance negotiations that subsequently took place he was merely trying to salvage as much as he could from a situation where his termination seemed inevitable. The Court of Appeal cited the fact that the terms agreed were not particularly favourable to Mr Sandu and the wording of an agreed letter was consistent with a dismissal. The Court of Appeal described this as “the very antithesis of free, unpressurised negotiation.”

While this dismissal occurred before the introduction of the statutory dispute resolution procedures, it is still possible for negotiations over mutually agreed severance to be entered into since their introduction. The key thing to remember is that if there is a risk that the employee could be regarded as having been dismissed then the statutory procedures should be followed to avoid the dismissal being regarded as automatically unfair. From this stand point the negotiations should take place after the act of dismissal. Also, after the 2004 case of BNP Paribas v Mezzotero details of without prejudice negotiations can be disclosed to an Employment Tribunal if such negotiations occurred before an act, in this case dismissal, which could be the trigger for without prejudice settlement negotiations.

If there is to be a meeting without, or in order to avoid, any act of dismissal then the purpose of that meeting should be made clear at the outset, so that the employee is fully aware of what is at stake. Even then there is a question over whether the employee and employer have an equal amount of bargaining power. If a severance package is agreed that involves the employee resigning, consideration would have to be given to whether the employee had done so voluntarily or whether they felt that they had no option but to resign because of pressure from the employer.