Willoughby v CF Capital plc

Unambiguous words of dismissal, understood by the employee as such, ordinarily terminate the employment contract. The same principle applies to unambiguous words of resignation. The exception for special circumstances is narrow and should not be applied routinely.

The central question is whether the circumstances showed that the expressed decision was not a conscious and rational decision, for example because words were spoken in anger, in the heat of the moment or under extreme pressure. A mistaken underlying assumption does not by itself create special circumstances. Where an employer has committed a fundamental breach, it cannot rely on the doctrine to improve its position. Any retraction must occur in very short order, normally within a day or two.

Miss Willoughby appealed against an Employment Tribunal decision dated 3 September 2009 dismissing her claims of unfair and wrongful dismissal. The Tribunal found that the employer’s letter of 22 December 2008, stating that her employment would terminate and proposing self-employed agency work, would ordinarily amount to dismissal. It nevertheless held that special circumstances existed because the letter resulted from a misunderstanding and the employer attempted to withdraw it shortly after learning of the claimant’s position.

The appeal concerned whether the letter should be given effect according to its terms, whether the employer’s mistake and subsequent conduct constituted special circumstances, and whether the retraction was sufficiently prompt.

1. Appeal allowed. The Employment Tribunal had correctly found that the letter, read in isolation, contained unambiguous words of dismissal. The reference to termination of the existing employment contract could not reasonably be read otherwise.
2. The Tribunal applied the wrong legal test. The relevant question was whether the claimant was entitled, in the special circumstances, to regard the expressed decision as other than a conscious and rational decision. A mistake by the employer, or the fact that something appeared seriously wrong, was insufficient. The letter intentionally terminated the contract; the mistake concerned the employer’s underlying belief that agreement had already been reached.
3. The general rule applies to dismissal and resignation alike. Exceptions are limited. Tribunals should not be astute to find them. The recognised examples principally concern words spoken in anger, in the heat of the moment or under extreme pressure, particularly where they are promptly retracted.
4. The employer’s conduct after 5 January 2009 was not a timeous retraction. The claimant had already obtained legal advice and acted on the letter. A reasonable period for retraction is relatively short, ordinarily a day or two. The Christmas holiday did not excuse the delay, particularly because the letter was to take effect on 31 December and urgent legal advice was foreseeable.
5. Where express words of dismissal are themselves, or form part of, a fundamental repudiatory breach, the special-circumstances doctrine has no application. An employer in fundamental breach cannot improve its position by attempting to cure the breach.
6. It was declared that the respondent dismissed the claimant. The remaining issues were remitted to a fresh Employment Tribunal.

• Employment Appeal Tribunal: Allowed the appeal, declared that the claimant had been dismissed, and remitted the remaining issues to a fresh Employment Tribunal.
• Employment Tribunal: On 3 September 2009 dismissed the claims of unfair and wrongful dismissal, holding that the claimant had resigned.