Francis v Pertemps Recruitment Partnership LTD

For unfair-dismissal purposes, the question under section 95(1)(a) of the Employment Rights Act 1996 is whether the contract under which the employee is employed was terminated by the employer. It is not the broader question whether the employment relationship continued.

Where an agency employee’s contract required work for a specified client, and that client no longer required the employee’s services, the agency could not continue to perform that contract without variation. Its termination was a dismissal. An employee’s selection between alternatives which both entail notice and dismissal does not make the termination consensual.

The claimant was employed by a recruitment agency under a contract requiring him to work for a specified client. When that client no longer required his services, the agency offered either notice while it sought other work, or notice with a redundancy payment. The claimant ultimately chose the latter option.

An Employment Tribunal at Edinburgh decided on 17 October 2012 that the parties had mutually terminated the contract and that there had been no dismissal. It also dismissed a protective-award claim. That decision followed an earlier procedural appeal to the Inner House of the Court of Session, which had allowed the claimant’s appeal on 1 March 2012 and remitted the matter to a fresh Tribunal.

The central issue was whether the employment contract had been terminated by the employer so as to found a claim for unfair dismissal.

1. Appeal allowed. The Tribunal’s finding that there had been no dismissal was wrong in law. A finding that the claimant had been dismissed was substituted.

2. Section 95(1)(a) of the Employment Rights Act 1996 directs attention to termination by the employer of the contract under which the employee is employed. Although the statutory language for redundancy payment is similar, provisions concerning renewal or re-engagement mean that the broader continuation of an employment relationship does not answer the unfair-dismissal question.

3. The Tribunal had correctly construed this contract as requiring the claimant to work for the specified client. The contractual power to transfer him to another location did not authorise transfer to a different client. Once that client had no further need for his services, the agency could not perform the contract without a variation to which the claimant had not agreed. No party contended that the contract was frustrated. The contract was therefore terminated by the agency.

4. The Tribunal had also erred in treating the termination as consensual. Both alternatives offered on 12 December involved two weeks’ notice; they differed only in the terms on which dismissal would occur. An employee’s choice between such alternatives does not alter the fact that dismissal is intended by the employer. The use of formal language of notice and redundancy, followed by a formal redundancy letter and appeal process, could not realistically be treated as meaningless or merely loose terminology.

5. The unfair-dismissal claim was remitted to a fresh, differently constituted Tribunal. It must determine the employer’s reason for dismissal and the remaining issues on the basis that a dismissal occurred.

• Employment Appeal Tribunal: appeal allowed; the finding of no dismissal was reversed and the case remitted to a fresh Tribunal.
• Employment Tribunal at Edinburgh: on 17 October 2012, it held that the contract had been mutually terminated and dismissed the unfair-dismissal claim; it also dismissed the protective-award claim.
• Inner House of the Court of Session: on 1 March 2012, it allowed an earlier procedural appeal and remitted the matter to a fresh Tribunal.