Employment: Effective date of termination

The Employment Appeal Tribunal held in Radecki v Kirklees Metropolitan Borough Council where there is a compromise agreement which is expressed to be “without prejudice and subject to contract”, the termination date provided for in that agreement does not become the actual termination date unless the agreement is subsequently signed.  In this case, the employee was removed from the payroll with his knowledge on the date included in the draft compromise agreement (31 October), but negotiations subsequently broke down.  In February, the employee notified the council that he did not accept the settlement terms, to which the council responded in a letter dated 5 March that it considered that his employment had terminated on 31 October.  The employee claimed unfair dismissal.  The issue was whether the claim was in time: if the termination date had been 31 October, the claim would have been out of time.  The EAT held that the effective date of termination was 5 March, being the date on which the employer unequivocally stated that it had ended.  This meant that the claim was in time. 

A note of caution: if an employer unilaterally removes an employee from the payroll, a tribunal may take that to be an unequivocal act of termination, unless there is something to indicate that the employment is not intended to terminate by virtue of that act.

For more information, please contact Alexandra Davidson at alexandra.davidson@blplaw.com.