When does Employment End?
An employee’s employment officially ends on the effective date of termination (EDT). This is defined in the Employment Rights Act 1996 as either:
- the date on which the notice period expires (if either the employer or employee gave notice to terminate the employment)
- the date on which that termination takes effect (if the employment terminates without notice)
The EDT is important for determining, amongst other things, if a claimant is in time for bringing an employment tribunal claim. For example, claims for unfair dismissal must be brought within 3 months of the EDT.
In the recent case of Rabess v London Fire and Emergency Planning Authority, the Employment Appeal Tribunal looked at whether an EDT was affected by a subsequent appeal finding meaning the claimant's employment tribunal application was out of time.
Mr Rabess was summarily dismissed for gross misconduct on 24 August 2012. His EDT was therefore 24 August 2012. He appealed and the appeal hearing was eventually heard on 9 January 2013, over three months after his dismissal. On appeal, although the original decision to dismiss was upheld, the appeal officer concluded that Mr Rabess’ conduct amounted to ‘misconduct’ and not ‘gross misconduct’. As Mr Rabess was already on a live final written warning, his employment still terminated but rather than summarily, he would be paid 6 weeks’ notice in lieu. The appeal officer confirmed his EDT as 24 August 2012.
Just to add another problem – there was no payment in lieu of notice clause (PILON) in his contract of employment!
Effective Date of Termination?
Mr Rabess brought claims for unfair dismissal and also breach of contract as there was no right under his contract of employment to pay notice in lieu. His claims were brought over 3 months after his EDT and were technically out of time. Should his claim be rejected or did the appeal decision change his EDT to January 2013? Or as there was no contractual right to pay notice in lieu, should 6 weeks’ notice be added on to 24 August 2012?
Was the claim in time?
Both the employment tribunal and Employment Appeal Tribunal concluded that Mr Rabess’ employment ended on 24 August 2012. The employer had not expressly changed the EDT.
What about the notice point? The EAT disagreed with Mr Rabess and held that from the 24 August 2012 his employment ended and no notice would be ‘added on’ to the termination date. If he wanted to argue he had not been given correct notice or paid the correct amount he had to bring a claim for damages.
Mr Rabess was therefore out of time to bring his claims in the employment tribunal.
This case is important because even though the disciplinary sanction was reduced on appeal from gross misconduct to misconduct, the resulting dismissal and termination date remained the same. This was helped greatly by the appeal officer confirming in his appeal letter the original termination date; therefore, it could not be said there had been any change by the employer. Also, not having a PILON clause in the contract did not affect the EDT – although, not paying or giving correct notice could be a breach of contract claim.
Dates of termination are important and employers should be clear when employment ends and also what the position is with regards to notice. The best advice is to have options: have clearly drafted disciplinary policies which set out the right to dismiss summarily and also reserve their right in the contract of employment. With regards to notice, again keep your options open in the contract of employment reserving the right to working notice, placing an employee on garden leave or paying in lieu. This also avoids any complicated PILON or taxation arguments.
Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.