4th November 2014

Time to Say Goodbye: Dismissals and the Effective Date of Termination

Time limits are important in employment law. An employee requires to have two years’ qualifying service to pursue a claim for ordinary unfair dismissal.  Additionally an employee requires to lodge a claim for ordinary unfair dismissal within three months of the “effective date of termination” (EDT).

When does the clock start ticking for this three month time limit?

The three month time limit commences on the EDT.  The EDT varies depending on the situation.  The date cannot usually be determined in agreement between the parties, but instead is decided objectively in accordance with the statutory definition. Where a contract is terminated by notice, either by the employer or the employee, the EDT is the end of this notice period. Where a contract is terminated without notice by the employer (e.g. summary dismissal), the EDT is the date on which the termination takes effect.

Does it matter if the employee’s dismissal is communicated verbally or in the post?

The employee requires to have actual knowledge of the termination in order for the notice of dismissal to take effect.  The EDT is therefore the date on which the employee becomes aware of his dismissal.  This means that, if the employee is advised at the disciplinary meeting that he is being dismissed without notice, this is the EDT.  By comparison, if the employee is advised in writing of the summary dismissal, the date on which the employee reads the letter is the EDT.

If a summary dismissal is overturned on appeal, does this vary the EDT?

Last month, the EAT considered the case of an employee who was originally dismissed without notice for gross misconduct.  When the employee appealed against his dismissal, the employer substituted the summary dismissal with a decision to dismiss with pay in lieu of notice.  The EAT held that, since the decision to dismiss was upheld, the EDT would remain the date on which the employee was summarily dismissed (not after the notice period would have expired).  The EAT placed importance on the fact that the appeal outcome letter stated that the EDT would be the previous date of termination and that the only difference to the outcome was the entitlement to notice pay..

Can a claim for ordinary unfair dismissal be pursued after expiry of this three month time limit?

If an employee can demonstrate that it was “not reasonably practicable” to lodge a claim within three months of the EDT, a claim can proceed.  However this is a high test for an employee to satisfy.  It is for this reason that employers should be clear about an employee’s EDT.

Tips for employers

If you require certainty as to the EDT, you should advise the employee verbally of the decision to dismiss.

If a decision to dismiss is being communicated in writing, an employer may want to hand-deliver the letter of dismissal to the employee or ensure that any email is marked as “read receipt”.

If a decision to summarily dismiss is overturned on appeal, the decision-maker may want to specify the “new” EDT in the outcome letter.

Andrew Wallace
Trainee Solicitor – Employment Law
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