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What is the meaning of dismissal?

Posted on 5th September 2013
Case law

To bring a claim of unfair dismissal the employee must show that he or she has been dismissed. Section 95 of the Employment Rights Act 1996 provides that an employee is dismissed when ‘the contract under which he is employed is terminated by the employer whether with or without notice.’ The Employment Appeal Tribunal (‘EAT’) had to decide in this case whether or not the employee’s contract had been terminated by his employer.

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The focus should be on whether the contract . . . was terminated. And if so, who terminated the contract

Mr Ronald Francis v Pertemps Recruitment Partnership Ltd UKEATS/00031/13/BI

The facts

Mr Francis was employed by Pertemps Recruitment Partnership Ltd (‘Pertemps’) which is a recruitment business supplying contract labour to clients.

Mr Francis was employed as an administrative assistant to work for a specified client. 

Pertemps' client decided to transfer to its existing staff, at a different location, the work that Mr Francis had been undertaking.  Therefore, the client no longer required Mr Francis’s services. In light of this fact, Pertemps gave Mr Francis two options: first he could be given two weeks’ notice on the basis that Pertemps would keep looking for alternative employment for him; or the second option was for Francis to be given two weeks’ notice and be paid redundancy pay instead of Pertemps seeking an alternative position for him.

Mr Francis originally chose the former option but later changed his mind and took the notice and redundancy payment.  The HR department of Pertemps wrote to Mr Francis to confirm that his position was redundant.  They letter also stated: ‘Please treat this letter as formal notice of redundancy.’  It also notified him of his right to appeal against the decision to terminate his employment. 

Mr Francis exercised this right to appeal but his appeal was unsuccessful. 

Mr Francis brought a claim in the employment tribunal of unfair dismissal.  He was unsuccessful in his claim because the employment tribunal found that there had been no dismissal.  It agreed with Pertemps’ argument that there had been a mutually agreed termination of his contract of employment and thus no dismissal. 

Mr Francis appealed to the EAT.

The EAT decision

The EAT overturned the decision of the employment tribunal and found that there had been a dismissal.  The EAT held that the focus should be on whether the contract under which the employee was employed was terminated.  And if so, who terminated the contract. 

The EAT found that the employment tribunal had focussed on the employment relationship.  This was wrong.  It should have focussed on the contract of employment.  Had it done so it could have reached no other conclusion than that the contract had come to an end without Mr Francis having in anyway consented to that taking place.  It said: ‘where an employee is given two options, both of which involve dismissal, albeit the two options are distinguished by different terms upon which the dismissal is to be effected, the only sensible conclusion is that the dismissal is intended by the person offering those options.’

The EAT rejected the argument as unrealistic that the terms ‘notice’ and ‘redundancy’ were loose terms not intended to have their formal meaning. 

In practice

This case reminds employers to be careful how a contract of employment is brought to an end and the language used.  An employer should only give notice to an employee once the consultation process has been completed and the employer wants to dismiss the employee. This is also a case where the use of a settlement agreement would have prevented Mr Francis from having any ability from starting his claim for unfair dismissal.

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