It has long been established that as a matter of law, once a dismissal or a resignation has been communicated to the other party, then it is effective. There is a commonly held view that a resignation has to be accepted, but that is not accurate – both dismissal and resignation are unilateral acts (see our previous article here on resignation myths).
The courts have however recognised that a strict application of this rule might lead to results which were unintentional on behalf of one or both parties. In particular, where a resignation or a dismissal has been communicated in the heat of the moment, the courts have been inclined to allow the party who made the decision in haste a short cooling off period and, provided they act promptly, the opportunity to retract their hasty decision.
In the recent case of CF Capital v Willoughby the Court of Appeal had to consider whether an employer was able to withdraw a dismissal when the employer argued that it was given prematurely and by mistake. In this case, the company was looking at potential redundancies and discussed with Mrs Willoughby the possibility of her becoming self employed. However, prior to any self-employment arrangement being agreed, on 22 December 2008 the company notified Mrs Willoughby that her employment would terminate on 31 December 2008 and informed her that an alternative self employed agreement would commence on 1 January 2009.
Mrs Willoughby contacted the company after the Christmas break on 5 January 2009 and stated that she did not accept the alternative agreement and that they had terminated her employment. The company replied that if she did not wish to become self employed, then the employment relationship would continue as before. Mrs Willoughby did not return to work and the company treated her non return as a resignation.
The Employment Tribunal dismissed Mrs Willoughby’s claim for unfair dismissal on the grounds that she had resigned. The Tribunal found there were ‘special circumstances’ which needed to be taken into account as the reference to the termination of Mrs Willoughby’s employment had to be an error on the company’s part and that the company withdrew the dismissal once it had realised its mistake. This decision was overturned by the Employment Appeal Tribunal. The Court of Appeal upheld the Employment Appeal Tribunal’s decision that Mrs Willoughby had been dismissed. They held that the company had intended to dismiss and had done so using clear and unambiguous terms.
If you would like to talk through a situation you are dealing with, or if you need advice on any aspect of employment law, please contact any member of the Pure Employment Law team (01243 836840 or [email protected])