CF Capital Plc v Willoughby

A clear notice of resignation or dismissal ordinarily takes effect according to the ordinary meaning of its terms. Once given, it cannot be unilaterally withdrawn, but only withdrawn by consent. The so-called special circumstances doctrine is a cautionary principle, especially relevant to words spoken in the heat of the moment. It may require the recipient to allow time to establish whether the notice was truly intended. It does not permit an employer to escape an intended written dismissal merely because the employer made a mistake about the employee’s likely response or later changed its mind.

The employer appealed from the Employment Appeal Tribunal, which had allowed the employee’s appeal from the Newcastle-upon-Tyne Employment Tribunal. The employment tribunal had dismissed her unfair-dismissal claim, holding that she had resigned rather than been dismissed. The EAT held that the employer’s letter, stating that her existing employment contract would terminate and proposing subsequent self-employment, was an effective dismissal, and remitted the case for determination of her consequential claims.

The employer argued that the letter was vitiated by mistake because the employee had not yet agreed to become self-employed, and that the mistake could be corrected by withdrawing the notice. The central issue was whether the special-circumstances principle prevented the notice taking effect according to its ordinary meaning.

1. Appeal dismissed. The letter of 22 December 2008 contained clear and unambiguous words terminating the employee’s employment. The employer intended it to dismiss her, and she understood it as doing so.
2. The contractual approach is objective. The legal effect of a notice is determined by the words used in their context and by how a reasonable recipient would understand them. Surprise or recognition that the employer may have made a mistake does not require the notice to be given a different meaning.
3. A notice of dismissal cannot be unilaterally retracted. It may be withdrawn only by consent: Riordan v The War Office [1959] 3 All ER 552 and Harris & Russell Ltd v P.S.G. Slingsby [1973] IRLR 221.
4. The special-circumstances doctrine is not a true exception permitting unilateral withdrawal. It is a caution to the recipient that, before acting on apparently clear words, the circumstances may require a cooling-off period to establish whether the giver really intended to give a notice of resignation or dismissal. It will most commonly arise where words are spoken orally in the heat of the moment.
5. The doctrine did not assist the employer. Its mistake was a mistaken expectation that the employee would accept proposed self-employment terms, not a misunderstanding that she had agreed to termination. The notice was clear, took effect according to its terms, and could not be withdrawn unilaterally.

Lord Justice Hooper and Lord Justice Laws agreed with Lord Justice Rimer.

1. Court of Appeal (Civil Division) dismissed the employer’s appeal and upheld the EAT’s conclusion that the employee had been dismissed.
2. Employment Appeal Tribunal (UKEAT/0503/09/LA) allowed the employee’s appeal from the employment tribunal and remitted the proceedings to a differently constituted tribunal to determine her consequential claims.
3. Newcastle-upon-Tyne Employment Tribunal dismissed the unfair-dismissal claim, holding that the employee had resigned rather than been dismissed.