Asamoah-Boakye v Walter Rodney Housing Association Ltd

A tribunal cannot find that employment ended by mutual agreement unless the parties reached a legally concluded agreement. Agreement on important or material terms is insufficient where other terms remain open, or where the negotiations show that execution of a written agreement and independent legal advice were conditions of agreement. An agreement merely reached in principle cannot terminate the employment contract. If there is neither resignation nor mutual termination, an employer’s instruction that the employee’s employment has ended and that the employee must not return to work constitutes dismissal. The issue of fairness may then be remitted for determination.

An employee’s unfair-dismissal claim was dismissed by an Employment Tribunal in Reading. The Tribunal found that the parties had mutually terminated the employment after agreeing terms in principle, although the proposed compromise agreement was never signed and negotiations continued about the reference to be supplied.

The Employment Appeal Tribunal held that no binding termination agreement had been reached, found that the employee had been dismissed, and remitted the case for an inquiry into fairness. The employer appealed, arguing that the Tribunal’s conclusion was one of fact, that a binding agreement had been reached, and that the whole case should be remitted.

1. Appeal dismissed. The Court of Appeal held that the statutory question under section 95(1)(a) of the Employment Rights Act 1996 was whether the contract had been terminated by the employer. Mutual termination could exclude dismissal only if there was a concluded agreement in law.
2. A tribunal must adopt a realistic approach to employment disputes, but that does not permit it to disregard the requirements of contract law. Where negotiations contemplate termination on several terms, it is an error of law to find a concluded agreement when any term remains unsettled. Agreement in principle is insufficient.
3. The principle stated by Parker J in Von Hatzfeldt-Wildenburg v Alexander [1912] 1 Ch 284 applied. Where the parties treat execution of a further written contract as a condition of their bargain, no enforceable agreement arises until that condition is fulfilled. The negotiations here expressly contemplated a written compromise agreement, independent legal advice and compliance with section 203 of the Employment Rights Act 1996. The agreement was never signed, and the reference remained unresolved.
4. The employee’s conduct in clearing his desk, handing over property and leaving did not establish resignation or mutual termination. The Tribunal’s finding that he had not resigned was not challenged on appeal and provided no basis for reconsideration.
5. Since there was no resignation and no binding mutual termination, the employer’s instruction that the employee’s employment was at an end and that he should not return to work amounted to dismissal. The EAT was correct to remit only the question whether the dismissal was fair. Costs were assessed as agreed at £165.80.

• Court of Appeal (Civil Division): appeal from the EAT dismissed; the remission for determination of fairness was upheld.
• Employment Appeal Tribunal: allowed the employee’s appeal, held that there was no binding agreement and that he had been dismissed, and remitted the fairness issue.
• Employment Tribunal, Reading: dismissed the unfair-dismissal claim, finding mutual termination rather than dismissal.