Cosmeceuticals Ltd v Parkin

A direct dismissal occurs where an employer unequivocally communicates, by words or conduct, that it has withdrawn the employee’s existing contract. This may occur even where the employer proposes a different role or a replacement contract. The communication is assessed objectively and must be known to the employee; constructive knowledge is insufficient.

The effective date of termination is a statutory concept under the Employment Rights Act 1996. Where the communicated dismissal is summary, that date is the effective date of termination. Parties cannot determine it by agreement, and a later purported notice or garden leave cannot preserve a contract already brought to an end.

The Claimant had been employed as the Respondent’s Managing Director. On 1 September 2015, after a paid sabbatical, the Respondent informed her that she could not return to that role and discussed possible alternative roles. It later purported to place her on garden leave and gave notice ending on 23 October 2015.

The Employment Tribunal held that the Respondent had communicated a dismissal on 1 September, but treated 23 October as the effective date of termination. It upheld the Claimant’s unfair-dismissal claim. The Respondent appealed, contending that the Tribunal’s own findings established a summary dismissal on 1 September and therefore made the claim prima facie out of time.

1. Appeal allowed. The Tribunal’s finding that the Claimant was told on 1 September 2015 that her existing contract as Managing Director was at an end was a finding of direct dismissal. It was not merely a finding that the Respondent had decided to dismiss at a later date.

2. A dismissal under section 95(1)(a) of the Employment Rights Act 1996 may be communicated by conduct. An employer who withdraws the existing contract, even while suggesting a new contractual arrangement, communicates a dismissal if its words or conduct would objectively be understood that way. The Tribunal had expressly found a clear communication, applying Hogg v Dover College [1990] ICR 39 EAT.

3. The possibility that a dismissal following a contractual change might be on notice could not be excluded in every conceivable case. However, the Tribunal made no finding that the dismissal here was on notice. Once an effective dismissal had been communicated, the contract had ended; there could then be no subsequent garden leave or notice under that contract. The only conclusion permitted by the findings was that the Claimant had been summarily dismissed on 1 September.

4. Accordingly, under section 97(1)(b), 1 September was the effective date of termination. The parties’ previous agreement that the date was 23 October could not alter that statutory question. The unfair-dismissal complaint was therefore prima facie late under section 111.

5. The time point did not finally dispose of jurisdiction. The case was remitted to the same Tribunal, if practicable, to decide whether it had been reasonably practicable to present the complaint in time and, if not, whether it had been presented within a reasonable further period.

• Employment Appeal Tribunal: Allowed the employer’s appeal and remitted the statutory time-limit question to the Employment Tribunal.
• London East Employment Tribunal: Upheld the Claimant’s unfair-dismissal claim. It found that dismissal had been communicated on 1 September 2015 but treated 23 October 2015 as the effective date of termination.