Employment Update: Effective date of termination/time limits

16 September 2008

Employment may still be continuing even if employee receives no pay and does not attend work

The recent case of Radecki v Kirkless Metropolitan Borough Council is a good reminder to employers of the risk of making the wrong assumptions when termination negotiations with an employee are continuing but not yet concluded.

In this case the employee had only worked for a very brief period when it became clear that there were problems. He was suspended from duty. He refused to attend a disciplinary hearing and 'without prejudice' negotiations began to agree terms on which he would leave. In October 2006 the agreed terms, including a termination date of 31 October 2006, were written into the draft compromise agreement which was sent to him and his trade union representative. He stayed away from work and his pay was stopped. Relations between him and his union deteriorated and eventually, in April 2008, the union told the employer that it was no longer representing him. He was then sent his form P45 which gave his termination date as 31 October 2006. The compromise agreement was never completed.

He then wanted to file an unfair dismissal claim. The general rule is, of course, that the employee has three months after the 'effective date of termination' within which to make such a claim.

The employment tribunal considered that he was out of time but the EAT has reversed that decision.

The fact that he was not paid and had stayed away from work did not necessarily mean that his employment had already been terminated. It was just as consistent with a suspension and his employment did not terminate until April 2008 so his unfair dismissal claim could proceed.

Point to note -

  • One of the matters that swayed the EAT was that under s203 of the Employment Rights Act no compromise agreement is complete unless it identifies the adviser who has given the employee independent advice as to its terms and effect. In this case, the name had not yet been inserted in the draft agreement, as the union had stopped representing him, so it could not be regarded as concluded.

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