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The Effective Date of Termination
[ch 10: pages 299-300]It is vital that employees understand clearly the effective date of termination (EDT) of their employment contract. This is because the EDT is the date the employment contract comes to an end and the date used to work out whether any claim is within the time limit for a tribunal claim. Many cases have been lost due to misunderstandings about the EDT.
In a case of summary dismissal (dismissal without notice), the EDT is the date the dismissal takes effect. This is usually the date the employee is told they are dismissed.
A summary dismissal cannot take effect until it has actually been communicated to the employee, or at least when the employee has been given a reasonable chance to find out about it (Gisda Cyf v Barratt [2010] UKSC 41).
Where an employee is given notice of dismissal, the EDT is usually the date the notice period expires, even if the employee is not expected to attend work during the notice period. However, a payment in lieu of the whole or any part of the notice can bring forward the EDT and the deadline for any tribunal claim. The parties can agree to bring forward the date of termination, but any agreement should be clear and unambiguous (Wedgewood v Minstergate Hull Limited [2010] UKEAT0137).
The EDT is not necessarily the date on the P45, although this may be evidence of the EDT. Neither is a P45 proof of dismissal and an employee does not have to wait to receive a P45 before bringing a claim. In fact, if they do wait, they may go beyond the three-month time limit for their claim and lose the right to pursue it (LB Newham v Ward [1985] IRLR 509).
The EDT is a statutory concept which is governed by the law. This means that once the dismissal has taken place, the parties cannot agree between themselves to change the EDT. Instead, the date is worked out by looking at what actually happened (Horwood v Lincolnshire County Council [2012] UKEAT/0462/11/RN). Agreements to change the EDT after the dismissal have no legal effect because by this stage, the employment contract no longer exists. Here is a good example of the implications of this rule:
Ms Hibbert, who was involved in a serious dispute with her employer, wrote to her employer saying “I have no alternative but to resign”. The employer replied suggesting she take five days to think it over. When Ms Hibbert didn’t take up this suggestion, her employer wrote “accepting” her resignation. The employer told her she needed to work four weeks’ notice, and that her last working day would be a date four weeks later.
Ms Hibbert issued tribunal proceedings, and the tribunal needed to rule as whether they had been issued in time. The EAT ruled that the words “I have no alternative but to resign” brought the contract to an end the moment they reached the employer. That date was the EDT. In law, there was no need for the employer to “accept” the resignation. Rather, it was Ms Hibbert who had “accepted” the employer’s fundamental breach of contract by resigning.
The employer’s invitation to take five days to think it over gave Hibbert a window in which to reconsider. If she had retracted her resignation when given the opportunity, the employment contract would have continued. Since she did not retract her resignation, the words “I have no alternative but to resign”, once communicated to the employer, brought the contract to an end immediately.
None of the parties’ later actions could change the EDT, since it had already passed. In other words, the employer’s letter asking for four weeks’ notice and giving the last working day as 27 July had no legal effect on the EDT. The claim was out of time.
Secretary of State for Justice v Hibbert [2013] UKEAT/0289/13/GE