Employment Update April 2009: Effective date of termination

By Employment Group


Stopping pay brings employment to an end

The case of Radecki v Kirklees Metropolitan Council reached the Court of Appeal just before Easter. It concerned an employee who was suspended from work on full pay. Disciplinary proceedings were pursued but, at some point (as often happens in such cases) negotiations then opened with a view to terminating his employment on agreed terms. A draft compromise agreement was drawn up setting a termination date of 31 October. It seemed to the employer that terms were agreed even though the document had not yet been signed, so on 31 October it stopped paying the employee. However, the employee never actually signed the agreement and, having changed advisor, filed an unfair dismissal claim in the employment tribunal the following March. The employer argued that, this being more than 3 months since 31 October, his claim was out of time. The Employment Tribunal found in favour of the employer, concluding that the employment had terminated by "mutual agreement" on 31 October. The EAT said that the employer could not argue that this was the ‘agreed’ termination date because the compromise agreement had never been signed and, in the circumstances, it thought it just and equitable to extend the three-month deadline so that the employee could still bring his claim.

The Court of Appeal disagreed with the conclusion of the EAT and the approach of the original Tribunal. The Court held that stopping the employee’s pay amounted to a repudiatory breach of contract on the employer’s part, bringing the contract to an end. This meant that 31 October was the termination date and the employee’s claim was out of time.

Points to note –

  • With the repeal of the statutory disciplinary and grievance procedures, time limits for bringing tribunal claims can now only be extended, in unfair dismissal claims, where the tribunal is satisfied that it was not reasonably practicable for the claimant to bring his/her claim in time. Time starts running from the effective date of termination (EDT), so it is always critically important to know when that date was.

  • Unfortunately, the Court did not take the opportunity to provide any real guidance on how to determine the EDT. Furthermore, it failed to give any explanation as to why the employee was not required to accept the employer's repudiatory breach in order to bring the employment to an end.