The effective date of termination is not necessarily when a letter is received, but when it can reasonably be expected to have been read

Gisda Cyf v Barratt [2010] UKSC 41

www.workrep.co.uk

    Helping You     About     Links     Contact     Site Info     HOME

• The question was when did the termination of employment take effect; when the letter was sent or on the day that it was delivered?
• The Supreme Court decided that normal contractual principles do not apply here where Statutory rights exist.
• It is only reasonable that an employee should be allowed to read a letter of dismissal in private, and if the employee is not at home when such a letter arrives, the DoT will be fixed by the date it could reasonably be expected to have been read.

The Supreme Court case of Gisda Cyf v Barratt determined the effective date of the termination as being when the worker actually knows about the dismissal. A recorded letter signed for by the son of an employee for gross misconduct whilst she was away was not enough(If the date of the signing of the recorded letter was taken to be the date of the termination the employee would have been out of time to launch her employment tribunal case for unfair dismissal and sex discrimination. If when she returned home and read the letter a few days later was taken as the date of the termination then her case would be in time).

Fixing the effective date of termination (DoT) of employment is important as it is this that decides the date on which an employee is considered to have been dismissed. Once the DoT is fixed the clock starts running in which the employee can begin his tribunal case (usually 3 months).

The definition of the, "effective date of termination", appears in section 97 (1) of the Employment Rights Act 1996 mirroring section 55 (4) of the Employment Protection (Consolidation) Act 1978, paragraph 5 (5) of the First Schedule to the Trade Union and Labour Relations Act 1974 and section 23 (5) of the Industrial Relations Act 1971.

Section 97 (1) of the ERA 1996 states:-

Before the EAT the employers argued that an employment contract could be terminated by one party without the other party being aware of the termination but when the communication could be expected "in the normal course of things" to have come to the other party's attention.

The EAT rejected this argument using The Brimnes [1975] QB 929, [1974] 3 WLR 613, [1974] 3 All ER 88, a case where the owners of a ship sent a telex to the charterers at 5.45 pm on 2 April 1970 withdrawing the vessel on the ground of late payment of the hire charge. The charterers' normal business hours ended at 6.00 pm and the telex was not seen until the next morning of despite having arrived in the charterers' office at 5.45 pm on 2 April. The notice was decided as having been received by the charterers before 6.00 pm on 2 April. The Court of Appeal upheld that decision, Megaw LJ enunciating the legal principle that:

"… if a notice arrives at the address of the person to be notified, at such a time and by such a means of communication that it would in the normal course of business come to the attention of that person on its arrival, that person cannot rely on some failure of himself or his servants to act in a normal businesslike manner in respect of taking cognisance of the communication so as to postpone the effective time of the notice until some later time when it in fact came to his attention."

Bean J rejected any analogy with The Brimnes decision saying in para 17 of the judgment:

"There is no principle equivalent to that enunciated in The Brimnes that an individual is expected to be at home to receive and open the post when it arrives or in the evening when he or she gets home, or that some arrangement must be made for someone else to open what may well be confidential correspondence in the recipient's absence."

The Court of Appeal dismissed the employer's argument to overrule earlier decisions of the EAT ( Brown v Southall & Knight [1980] IRLR 130 EAT and McMaster v Manchester Airport plc [1998] IRLR 112 EAT) whereby the effective date of termination was when the employee had actually read a dismissal letter or had had a reasonable opportunity of reading it.

The Court of Appeal rejected the employer's argument that termination of an employment contract may predate the employee's actual knowledge of the summary dismissal, and that contract law did not require the employer to communicate termination of the contract to the employee for him to be dismissed.

Likewise rejected was the employer's assertion that the date of summary dismissal as the date of the employee's actual knowledge of the dismissal or the date on which he or she had a reasonable opportunity to learn of the dismissal, Mummery LJ saying that the expression "effective date of termination" is not a term of contract law but a statutory construct, that it is reasonable that until and employee either knows of his dismissal it will not be effective.

Fairness as part of the dismissal process is enshrined in law, with an employee not being expected to take action until knowing about the dismissal.

The employer argued that because of her misconduct the employee had repudiated the contract of employment and that the repudiation was accepted by the employer, without the necessity of her actually being informed of this despite the acceptance normally being communicated ( State Trading Corporation of India Ltd v M. Golodetz Ltd [1989]).

The employer argued previous cases encompassed common law contractual principles such as, London Transport Executive v Clarke [1981] ICR 355, [1981] IRLR 166 and Kirklees Metropolitan Council v Radecki [2009] ICR 1244, whereby employers' actions constituted an unequivocal overt act which inconsistent with the contract of employment and which brought the contracts to an end. Common law contractual principles were therefore accepted so that overt action could terminate the contract in the absence of communication.

In Potter v RJ Temple plc [2003] was cited whereby the EAT held that the effective date of termination was when a fax was received rather than when it had been read or acted upon, and George v Luton Borough Council (EAT/0311/03) [2003] where the EAT held that the effective date of termination was when the employee's posted letter of resignation was date stamped as having been received.

The Supreme court found important the reasonableness of the employee's behaviour in finding out what was in the letter, and that it was reasonable for her to want to read such a letter in private, not have it read to her over the phone by her son. However if an employee deliberately did not open a letter of dismissal he could be debarred from denying receipt of notice of his dismissal. This was not the case here.

McMaster v Manchester Airport plc was quoted whereby the effective date of termination of a contract of employment could not be earlier than the date on which an employee received knowledge that he was being dismissed, that the doctrine of constructive or presumed knowledge had no place deciding whether a dismissal had been communicated except evidentially in that a tribunal would assume that letters usually arrive and that people normally open letters promptly.

Rejecting normal contractual principles the Supreme Court said:-

"These considerations provide the essential rationale for not following the conventional contract law route in the approach to an interpretation of section 97. As Mummery LJ said, it is a statutory construct. It is designed to hold the balance between employer and employee but it does not require – nor should it – that both sides be placed on an equal footing. Employees as a class are in a more vulnerable position than employers. Protection of employees' rights has been the theme of legislation in this field for many years. The need for the protection and safeguarding of employees' rights provides the overarching backdrop to the proper construction of section 97. "

The Supreme Court rejected the argument that cases such as London Transport Executive v Clarke, Kirklees Metropolitan Council v Radecki, Potter v RJ Temple plc and George v Luton Borough Council meant that common law contractual principles could be applied where employees' statutory rights existed.

The employer's appeal was rejected