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20th April 2012

Employment Appeal Tribunal Clarifies ”Effective Date of Termination” Issue

In the recently decided case of Horwood v Lincolnshire County Council, the Employment Appeal Tribunal (EAT) considered whether a former employee who had resigned without notice had brought her constructive unfair dismissal claim in time.

The facts of the case were that Mrs Horwood worked for Lincolnshire County Council (the Council) and after unsuccessfully appealing against a final written warning and demotion she decided to resign and claim constructive unfair dismissal. On 27th January 2010, she prepared a letter to her employer stating:

“I am resigning … with immediate effect, as I am not prepared to ‘waive’ the Council’s fundamental breaches of contract towards me.

In these circumstances, there is no requirement on me to work any ‘notice period’ and I do not intend to do so.”

On 28th January 2010, Mrs Horwood used special delivery to send the letter to the Council’s Chief Executive and she also sent copies to a Practice Manager and the Executive Director of Adult Social Care. The letters arrived at the addressees’ offices on 29th January 2010, where they were opened and date-stamped.

The Practice Manager saw her letter on Monday 1st February 2010 and asked the Council’s Head of Older People’s Services, to respond. On 2nd February 2010, a letter was sent on behalf of the Practice Manager, which stated:

“This letter is to confirm that I accept your resignation … Your resignation will commence from the date of this letter, 2 February 2010.”

The date of 2nd February 2010 was chosen as the termination date because it was administratively convenient for it to be the same date as the letter. Mrs Horwood subsequently received a letter from the Council’s pensions section referring to her benefits “on leaving your employment … on 02.02.10”.

Mrs Horwood sent her employment tribunal claim form, dated 28th April 2010, by first class post and it arrived at the tribunal on 29th April 2010. The Council argued that Mrs Horwood had brought her claim out of time: it argued that her Effective Date of Termination (EDT) was 29th January 2010, when her letter was opened and date-stamped, and therefore the latest her claim form could arrive at the tribunal was 28th April 2010.

At a pre-hearing review, an employment judge held that the tribunal did not have jurisdiction to hear Mrs Horwood’s claim. The judge stated that her EDT was 29th January 2010: there had been no requirement for a particular addressee to read her resignation letter, and the fact that it had been opened and date-stamped on that day was sufficient to show that her resignation had been communicated to the Council. The tribunal also found that there had been no subsequent agreement to vary her EDT. It was clear to the tribunal that the confusion about her EDT had resulted from a misunderstanding between Mrs Horwood and her legal adviser and, in the circumstances, it had been reasonably practicable for her claim to have been brought in time.

Mrs Horwood appealed the employment tribunal’s decision.  However, the EAT also dismissed the appeal and held that Mrs Horwood’s EDT was 29th January 2010.  The EAT stated that the basic principle in such cases was that employers need to know where they stand when an employee leaves, through:

“… communication by words, or by conduct, such as to inform the other party to the contract that it is indeed at an end. … unless there has been proper communication from the employee of the fact that they are regarding themselves as no longer employed, by words or conduct, their employment relationship has not terminated.”

Applying this approach in Mrs Horwood’s case, the EAT held that it was clear from her letter that her resignation was immediate and so it was effective as soon as the letter had been opened and date-stamped by the Council’s administrative staff.

Mrs Horwood also argued that, even if her EDT was 29th January 2010, the Council’s letter of 2nd February 2010 had given her a mistaken, yet reasonable, belief that her EDT was 2nd February 2010.  Accordingly, Mrs Horwood argued that the Council should not be permitted to take advantage of a situation in which it had misled her.

However, the EAT rejected this argument. It stated that the employment judge at the initial hearing had been entitled to conclude that it had been reasonably practicable for Mrs Horwood to have presented her claim in time and that time should not therefore be extended. Mrs Horwood’s resignation letter had been unambiguous and unequivocal and she was aware that her letters were likely to reach their destination by 29 January 2010. There was no evidence to suggest that Mrs Horwood had been unable to present her claim before 28 April 2010, and the fact that she had not done so was clearly the result of a misunderstanding between Mrs Horwood and her legal adviser.

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