CF Capital PLC v Willoughby 2011 EWCA Civ 1115

The Court of Appeal held that an employer could not unilaterally withdraw its notice of dismissal allegedly sent in error.  Although there is a special circumstances exception which allows a giver of a notice to withdraw it where the circumstances indicate that it was never intended to be given in the first place, these did not apply here.   

Ms Willoughby expressed an interest in becoming self-employed at the request of her employer in order to avoid redundancies.  But when she asked for detailed written terms of the move she received an agency agreement on 22 December from her employer stating that her employment would terminate on 31 December, when she would move to self-employed status.  She took advice and then advised CF Capital that she would not accept the agency agreement and would treat herself as dismissed.   

On 5 January after the Christmas break CF Capital informed her that there had been a misunderstanding and she could continue as an employee if she wished but she maintained that she had been dismissed and lodged claims for wrongful and unfair dismissal.  The tribunal held that there were special circumstances and that the dismissal was withdrawn as soon as practicable after she had alerted them to the mistake.  She had therefore resigned.  She appealed and the tribunal allowed her appeal.  CF Capital appealed to the Court of Appeal who confirmed that the notice of termination took effect according to its terms and CF Capital could not unilaterally withdraw it.  Its mistaken expectation that she would accept the proposed self-employment terms was not a special circumstance.  Ms Willoughby will now be able to pursue her claims for unfair and wrongful dismissal against CF Capital.

Key point: Employers may be entitled to rely on the special circumstances to retract a notice given in the heat of the moment otherwise something exceptional is required for the notice not to be effective.