Summarily dismissing an employee by letter – The ‘Effective Date of Termination’

8 November

The Supreme Court has recently handed down its decision in the case of Gisda v Barratt. It upheld the Court of Appeal’s decision that, where an employee is summarily dismissed by letter, the effective date of termination (EDT) is the date the employee reads the letter, or has had a reasonable opportunity to do so.

It is not when the letter is written, posted or delivered.

This article explores the law surrounding the effective date of termination where an employee is summarily dismissed and offers practical advice for employers.

Background
Under section 97 (b) of the Employment Rights Act 1996, in relation to an employee whose contract of employment is terminated without notice, the EDT is the ‘date on which termination takes effect’. So, where a summary dismissal is made in person the termination takes effect there and then (Dedman v British Building and Engineering Appliances Ltd [1974]). However, where an employer communicates dismissal in writing the EDT can be less clear.

The EDT is crucial for the deadline for submitting claims and to calculating the employee’s continuous service. Over recent years employers have argued the EDT should be the date the letter is written, posted, delivered or the date the employer could reasonably expect the employee to have read the letter.

In a series of decisions Courts and Tribunals have systematically rejected these arguments. In the absence of avoidance or evasion, the EDT is the date the employee reads the letter of dismissal, or has had a reasonable opportunity to do so.

Brown v Southall & Knight [1980]
Mr Brown was dismissed summarily by letter which was delivered whilst he was away on holiday. He did not read it until his return.

Mr Brown submitted a claim for unfair dismissal. The EDT was crucial because at the date the dismissal letter was delivered, Mr Brown did not have the required continuous weeks’ service to bring a claim of unfair dismissal.

The EAT held that the dismissal of an employee by letter did not take effect until the employee had read it, or had a reasonable opportunity to do so. Mr Brown did not have a reasonable opportunity to read the letter until he returned from his holiday and by this date he had acquired the required continuous service. Had Mr Brown chosen not to open the letter, or had gone away to avoid it, the EAT held ‘he might well be debarred from saying notice of his dismissal had not been given to him’.

McMaster v Manchester Airport Plc [1998]
Mr McMaster was dismissed by letter whilst off work sick; on the day it was delivered Mr McMaster was away on a day trip; he did not read it until the next day.

Mr McMaster claimed unfair dismissal. The EDT was crucial to his claim because, if it was the date of delivery, Mr McMaster’s claim had been presented out of time.

The Tribunal held the EDT was the date the letter was delivered: as Mr McMaster was off sick the Respondent could reasonably expect that he would have been at home to receive post. On appeal the EAT rejected this approach. It held that the employer’s state of mind is irrelevant when deciding if an employee had received, or had a reasonable opportunity, to read the letter. As Mr McMaster was away when the letter was delivered he had not had a reasonable opportunity to read it until his return. Accordingly, the EDT was the date the letter was read.

Gisda Cyf v Barratt (Supreme Court) [2010]
Ms Barratt was suspended from work after allegations of inappropriate behaviour. A disciplinary hearing was held and she was told she would be informed of the outcome, by letter, on Thursday 30 November 2006.

The letter was sent by recorded delivery. It was signed for by Ms Barratt’s stepson on 30 November. Before the letter arrived Ms Barratt had gone to visit her sister in London. She only read the letter when she returned on Monday 4 December.

On 2 March 2007 Ms Barratt lodged a claim for unfair dismissal. Gisda argued the claim had not been brought within 3 months of the EDT; it claimed the EDT was 29 November, when the letter was posted. It was argued that Ms Barratt had a reasonable opportunity to read the letter before 4 December and therefore the EDT should be earlier than this.

The Supreme Court confirmed the EDT was the date Ms Barratt read the letter. As Ms Barratt had not gone away deliberately to avoid receiving or opening the letter the Court held she had not had a reasonable opportunity to read it until her return.

Implications for employers
In the last 3 years the number of unfair dismissal claims brought to Employment Tribunals has increased to over 16,000 per annum. It is important for employers to establish when the EDT is, especially when continuous service is an issue.

Any employer wishing to dismiss an employee who is nearing the first anniversary of their employment should be wary of the outcome in Barratt. It is clear that an employee, who is dismissed by letter, but is unaware of that dismissal until they have 12 months’ service, will have the right to bring a claim for unfair dismissal. Dismissal in person avoids this risk.