Sandhu v Jan De Rijk Transport Ltd

The Court of Appeal held that the Employment Tribunal had misdirected itself in law when it treated this case as if it were on all fours with Sheffield v Oxford Controls and Crowley. The key legal principle applied is that the correct inquiry is one of causation: whether the employee's departure was caused by the threat of dismissal or by a genuinely voluntary decision to resign following free negotiation of terms. The court concluded that the 6 December 2002 meeting began with an unequivocal statement of dismissal, the appellant had no prior warning or opportunity to obtain advice, and the negotiations that followed did not transform an effective dismissal into a voluntary resignation. Because the Tribunal applied the wrong legal test and reached a conclusion no reasonable tribunal could have reached on the facts, its decision was set aside and the matter was remitted to a fresh tribunal to hear the unfair dismissal claim (including consideration of Polkey/contribution issues).

Background and procedural history:

• The appellant, employed as an operations manager, was summoned to a meeting in Roosendaal on 6 December 2002 and was told at the outset by the respondent's managing director that "your contract, we are going to finish it". The Employment Tribunal (7 February 2005) found that the appellant negotiated terms at that meeting and therefore resigned; it dismissed his unfair dismissal claim. The Employment Appeal Tribunal dismissed his appeal on 7 April 2006. Permission to appeal to the Court of Appeal was granted in August and enlarged in November 2006.

Nature of the claim / relief sought: The appellant sought to establish that he had been dismissed and was therefore entitled to bring an unfair dismissal claim rather than having resigned.

Issues framed by the court:

• Whether the Tribunal applied the correct legal test in deciding resignation versus dismissal (the causation test).
• Whether the Tribunal's factual finding that the appellant resigned was perverse.
• Whether evidence was wrongly excluded (raised but not determinative).

Court's reasoning:

• The court emphasised the governing causation approach: an apparent resignation will be treated as a dismissal if caused by the employer's ultimatum or pressure; conversely, a resignation following genuine, unpressured negotiation may be voluntary. The court reviewed the authorities relied on by the Tribunal and distinguished them from the present facts.
• On the facts, the meeting began as a dismissal, the appellant had no prior notice of allegations, no opportunity to take advice or to reflect, and the negotiations took place at the meeting in an effort to salvage terms. The terms obtained (three months' pay and short-term retention of a car and phone) were not sufficiently advantageous to characterise the departure as a voluntary negotiated resignation comparable to cases such as Crowley or Sheffield.
• The Tribunal had therefore misdirected itself in law and reached a conclusion that was not open to it on the evidence; the factual finding was perverse. The court accepted the respondent's concession that, if dismissed, the dismissal would have been procedurally unfair and remitted the case to a fresh tribunal to determine unfair dismissal on its merits, including Polkey/contribution issues.

Wider context: The court criticised the respondent's disciplinary and dismissal procedures and emphasised that employers must follow fair processes before dismissing employees.

Appeal allowed. The Court of Appeal found that the Employment Tribunal misdirected itself in law by treating the case as if it were analogous to Sheffield and Crowley. On the correct causation test and on the facts of this case, the appellant was dismissed rather than having voluntarily resigned. The Tribunal’s factual conclusion was also perverse. The Tribunal’s decision was set aside and the matter remitted to a fresh tribunal to hear the unfair dismissal claim (including Polkey/contribution issues).

Employment Tribunal dismissed the unfair dismissal claim (decision 7 February 2005; reasons 16 February 2005). Employment Appeal Tribunal dismissed the appellant's appeal (reserved judgment 7 April 2006) and directed any application for permission to appeal to the Court of Appeal. Limited permission to appeal was given by Sedley LJ on 8 August 2006 and enlarged by Arden LJ on 22 November 2006.