East London NHS Foundation Trust v O'Connor

For the purposes of statutory redundancy pay, notification that an employee’s current role will end does not necessarily communicate termination of the contract of employment. Whether it does so depends on the objective meaning of the communications in their full factual context.

A dismissal under section 136(1)(a) of the Employment Rights Act 1996 requires communication that the employer is terminating the contract, on a stated or unambiguously ascertainable date. Termination may be conveyed by conduct, but the conduct must objectively communicate an unequivocal intention to terminate. A statutory trial period under section 138 can begin only following an actual dismissal.

The Claimant’s role as a Band 6 Psycho-Social Intervention Worker was deleted during a restructuring. He began trialling a Care Coordinator role on 3 July 2017. The employer treated that trial as a statutory trial period and later contended that the Claimant had forfeited statutory redundancy pay by refusing suitable alternative employment.

The Employment Tribunal held that the Claimant had not been dismissed before beginning the trial. It found that he was dismissed only in December 2017 and that the July 2017 trial was not a statutory trial period. The employer appealed.

The central issue was whether notification that the Claimant’s existing role would end on 3 July 2017 objectively communicated dismissal of the contract under which he was employed.

1. Appeal dismissed. The Employment Tribunal was entitled to find that the Claimant was not dismissed on or before 3 July 2017. Its conclusion that the trial beginning on that date was not a statutory trial period was therefore correct.

2. Sections 135, 136, 138 and 141 of the Employment Rights Act 1996 operate together and must be construed holistically. The references in sections 138 and 141 to the end of employment do not create a separate concept of termination. They refer to the dismissal identified by section 136.

3. A dismissal under section 136(1)(a) requires the employer to communicate termination of the contract of employment, with effect from a stated or unambiguously ascertainable date. Communication may be by words or conduct. If conduct is relied on, it must objectively convey an unequivocal intention to terminate the employment contract.

4. There is no rule that an employee who is employed in a particular role is dismissed merely because the employer notifies them that the role will cease on an identified date. The tribunal must assess all the circumstances. Here, repeated references to possible future formal notice of dismissal, the continuing search for alternative employment, and communications concerning amendments to terms were capable of showing that abolition of the role had not communicated termination of the contract.

5. Since there was no actual dismissal before 3 July 2017, the statutory conditions for a trial period under section 138 were absent. The tribunal’s incidental errors and infelicities in its reasons did not undermine that sound conclusion. The deletion of the role could not amount to frustration because it was the employer’s own act. The matter was remitted to determine the remaining issues concerning entitlement to a statutory redundancy payment.

• Employment Appeal Tribunal: dismissed the employer’s appeal and upheld the Employment Tribunal’s conclusion that there was no dismissal before 3 July 2017.
• Employment Tribunal: judgment sent to the parties on 7 March 2019. It held that the Claimant was dismissed on 22 December 2017 and that the trial commencing on 3 July 2017 was not a statutory trial period.