Hawes & Curtis Ltd v Arfan

For the purposes of section 97(1) of the Employment Rights Act 1996, the effective date of termination is a statutory construct determined objectively by what happened between the parties. A summary dismissal will generally take effect when communicated, and an internal appeal will not usually alter that date. However, where the appeal decision changes the date or duration of the employment, that decision must be taken into account. The effective date is then the date on which the varied termination takes effect, or, in a dismissal on notice, the date on which notice expires. The result does not depend on an agreement to treat an earlier or later date as operative.

Two employees were summarily dismissed on 5 October 2010 and appealed under the employer’s internal disciplinary procedure. Their appeals did not reverse the dismissals, but the employer’s letter of 4 November 2010 stated that the effective date of termination was changed to that date, and the employees were paid until then. The Employment Tribunal, by a majority, held that the claims were presented in time. The Employment Judge dissented, reasoning that the effective date had crystallised on 5 October and could not be retrospectively altered. The employer appealed, arguing that a summary dismissal fixed the effective date and that the appeal decision was legally irrelevant.

Appeal dismissed. The Employment Appeal Tribunal held that the Employment Tribunal was entitled to find that the effective date of termination was 4 November 2010.

1. Section 97(1) of the Employment Rights Act 1996 requires the tribunal to identify, objectively, the date on which termination took effect. It is a statutory construct, and conventional contractual analysis is not determinative. The construction must be guided principally by the protection of employees’ rights, following Gisda Cyf v Barratt [2010] ICR 1475.
2. Where a summary dismissal is wholly upheld on appeal, the effective date will generally remain the date when the dismissal was communicated, unless the contract or the parties’ arrangements keep the employment alive during the appeal. If an appeal fully reinstates the employee, the dismissal falls away and the employment continues.
3. Where an appeal substitutes dismissal on notice, the effective date is ordinarily the date on which notice expires. Where it changes the date on which termination takes effect, that changed date governs under section 97(1)(b). The proposition that the effective date always crystallises on summary dismissal was rejected.
4. The Tribunal’s findings concerned the appeal decision, its communication, and the employer’s payment of wages under PAYE, rather than subjective agreement or intention. The contractual offer-and-acceptance analysis added by the Tribunal was incorrect and unnecessary, but it did not undermine the Tribunal’s earlier reasoning. The case was distinguished from Fitzgerald v University of Kent at Canterbury [2004] ICR 737 and Horwood v Lincolnshire County Council [2012] UKEAT/0462/11, because the date was changed as part of the disciplinary appeal process itself.

1. Employment Tribunal, London Central: By a majority, held that the effective date of termination was 4 November 2010 and that the claims were in time. The Employment Judge dissented.
2. Employment Appeal Tribunal: Dismissed the employer’s appeal and upheld the majority’s conclusion.