Kirklees Metropolitan Council v Radecki

The Court of Appeal allowed the employer's appeal and set aside the Employment Appeal Tribunal's decision that the effective date of termination was 5 March 2007. The court analysed the statutory definition of the effective date of termination in section 97 and the time limit for presenting unfair dismissal claims in section 111(2) of the Employment Rights Act 1996. It held that the Employment Tribunal's factual findings and legal approach were defective in treating a draft "without prejudice & subject to contract" compromise agreement as establishing a consensual termination date. The panel divided on remedy: one judge would have remitted the question of whether the claim was presented within the three-month statutory limit to the Employment Tribunal for rehearing, while the other two judges considered that on the facts found by the Employment Tribunal the effective date of termination was 31 October 2006 and the unfair dismissal claim was out of time.

This is an appeal from the Employment Appeal Tribunal (His Honour Judge Serota QC) against a decision of the Leeds Employment Tribunal (Mr P. Hildebrand) concerning the time at which an employee's contract terminated for the purposes of the three-month time limit in section 111(2) of the Employment Rights Act 1996. The appellant employer was Kirklees Metropolitan Council and the respondent was Mr Robert John Radecki.

Background and procedural posture

• Mr Radecki had been suspended on full pay from October 2005. Negotiations for a compromise agreement took place during 2006; draft agreements were repeatedly described as "without prejudice & subject to contract" and no formal signed agreement was ever produced.
• Communications in late October and early November 2006 recorded a proposed termination date of 31 October 2006 and payroll instructions to stop salary from November; the union instructed solicitors to advise and the employee signed an acceptance slip in November that referred to referral to solicitors under section 203 ERA.
• Kirklees ceased paying salary after October 2006 and later sent a letter of 5 March 2007 asserting that the employment had ended on 31 October 2006. Mr Radecki presented an unfair dismissal claim on 7 March 2007.
• The Employment Tribunal concluded that the parties had agreed a consensual termination on 31 October 2006 and dismissed the claim as out of time. The Employment Appeal Tribunal allowed an appeal, holding that there was no concluded agreement and that the effective date of termination should be treated as later (effectively when the employee became aware in March 2007).

Issues framed

• What was the effective date of termination for the purposes of section 111(2) ERA: 31 October 2006, 5 March 2007, or some other date?
• Whether the draft compromise agreement described as "without prejudice & subject to contract" could amount to an agreement fixing the termination date.
• Alternatively, whether the employer's conduct in stopping pay and related acts amounted to an unequivocal termination (including repudiatory conduct) that fixed the effective date of termination.

Court of Appeal reasoning

• All members of the court agreed that the Employment Appeal Tribunal was wrong to treat the draft compromise agreement as establishing a concluded consensual termination date while it remained "subject to contract" and unsigned, and that the Employment Tribunal erred in relying on it as the sole basis for its conclusion.
• The court considered the alternative submission that the employer's conduct in ceasing pay and related steps in early November 2006 might amount to an unequivocal termination (or repudiatory breach whose practical effect fixed the statutory effective date). The judges differed on the consequence of the Employment Tribunal's factual findings.
• Rimer LJ concluded that the Employment Tribunal had not made the necessary findings on the narrower factual question (whether employer conduct in early November unequivocally evinced an intention to terminate) and therefore would remit the question to the Employment Tribunal for rehearing.
• Toulson LJ agreed the appeal should be allowed but considered that, on the Employment Tribunal's existing findings, the employer had brought the employment to an end by ceasing to pay salary from 31 October 2006 and that remission was unnecessary.
• Rix LJ agreed the appeal should be allowed and took the view that the Employment Tribunal's findings supported the conclusion that the effective date was 31 October 2006, so remission was unnecessary and the claim was out of time.

Appeal allowed. The Court of Appeal held that the Employment Appeal Tribunal erred in treating a draft compromise agreement described as "without prejudice & subject to contract" as establishing a consensual termination date. The panel was unanimous that the EAT's reasoning on that point was wrong. The judges differed on remedy: Rimer LJ would remit the question of whether the claim was presented within the three-month period to the Employment Tribunal for rehearing because he considered the tribunal had not made necessary findings on whether the employer's conduct in early November unequivocally terminated the employment; Toulson LJ and Rix LJ agreed the appeal should be allowed but considered that, on the Employment Tribunal's factual findings, the effective date of termination was 31 October 2006 and that the unfair dismissal claim was therefore out of time.

Appeal from the Employment Appeal Tribunal (His Honour Judge Serota QC) UKEAT/0114/08/DA, which itself was an appeal from the Leeds Employment Tribunal (Mr P. Hildebrand) (decision dated 23 May 2007). The Court of Appeal ([2009] EWCA Civ 298) allowed the employer's appeal and set aside the EAT decision.