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Effective Date of Termination

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Did a Respondent’s ‘without prejudice’ letter purporting to communicate a mutually agreed termination, where no such agreement had been made, amount to an effective termination letter resulting in the Claimant’s unfair dismissal claim being out of time?

Yes, held the EAT in Meaker v Cyxtera Technology UK Ltd.

The Claimant suffered a back injury resulting in an extended period of time off work. On 5 February 2020 the Respondent sent the Claimant a letter which he received on 7 February. The letter was headed “without prejudice” and stated that it had been agreed that there would be a mutual termination of employment with the Claimant’s last day of employment being 7 February. The letter offered an ex gratia payment, conditional on the Claimant signing an enclosed draft settlement agreement.

The tribunal found that the letter of 5 February was a dismissal letter and that the effective date of termination was 7 February. It was on this basis that the Claimant’s subsequent claim of unfair dismissal was found to have been presented out of time.

The Claimant appealed, arguing that the February letter was not capable of giving rise to an effective date of termination on 7 February.

The EAT disagreed, finding that, on the assumption that the tribunal was correct that the 5 February letter was a termination letter, even if it was a repudiatory breach that was not accepted by the Claimant, the effective date of termination for the purposes of an unfair dismissal claim was the date of receipt of that letter.

The EAT also found the tribunal had not erred in construing the letter of 5 February as a dismissal letter, notwithstanding that the opening paragraphs referred to what was said to have been an agreement that there would be a mutual termination, which agreement had not in fact been reached, and that the letter was headed “without prejudice”. The tribunal properly concluded that the letter unambiguously communicated that the Respondent had decided to proceed to unilaterally terminate the employment with effect on 7 February 2020, and that only the offer of an ex gratia payment was conditional upon the Claimant signing a settlement agreement.

Thanks to Kate Lea of didlaw for preparing this case summary.