MR M FENTEM v OUTFORM EMEA LIMITED

An Employment Appeal Tribunal will ordinarily follow its own earlier decisions. It may depart only within tightly confined exceptions, including where an earlier decision is manifestly wrong. That means obviously wrong without extensive or complicated argument.

Although the reasoning in Marshall v Hamblin was problematic, its proposition—that an employer’s contractual exercise, following an employee’s resignation, of a right to bring forward the termination date on a prescribed payment does not constitute dismissal—was reasonably arguable. It was therefore not manifestly wrong. The Tribunal had to follow it and dismiss the unfair-dismissal appeal under Employment Rights Act 1996, section 95.

The claimant resigned on 16 April 2019, giving nine months’ notice ending on 16 January 2020. During that notice period the respondent invoked clause 19.5 of his contract. It ended his employment immediately on 19 December 2019 and paid his salary, excluding bonuses, for the unexpired notice period.

The Employment Tribunal held itself bound by Marshall (Cambridge) Limited v Hamblin [1994] ICR 962. It held that there had been no dismissal for the purposes of section 95 of the Employment Rights Act 1996 and dismissed the unfair dismissal claim. The claimant appealed, accepting that the appeal failed if Marshall v Hamblin had to be followed. The central issue was whether that earlier EAT authority could be departed from as per incuriam, inconsistent with other authority, or manifestly wrong.

1. Appeal dismissed. The EAT was bound to follow Marshall v Hamblin. Its rule was that, where an employee has resigned and the employer invokes a contractual clause permitting earlier termination on a prescribed payment calculated by reference to the remaining notice period, there is no dismissal.

2. The EAT’s previous decisions are persuasive and normally followed. The recognised exceptions include per incuriam, inconsistent EAT decisions, inconsistent decisions of a court of co-ordinate jurisdiction, manifest error, and other exceptional circumstances. A decision is manifestly wrong only if its error is obvious without extensive or complicated argument.

3. Marshall v Hamblin was not per incuriam West Midlands Co-Operative Society v Tipton. The latter concerned the relevance of an appeal to the fairness of a dismissal, not the specific issue of termination following an employee’s notice. McLoughlin v Sutcliffe Catering (UK) Limited was not an inconsistent authority; its reservation about one passage in Marshall was, at most, obiter.

4. The judge considered that the majority reasoning in Marshall did not support its conclusion. In particular, its analysis of payment in lieu, waiver and the statutory notice provision did not answer whether the employer had terminated the contract. Nevertheless, the result rather than the quality of the stated reasoning was decisive for the manifest-error question.

5. It was reasonably arguable that a contractual provision, triggered by resignation, could alter only the date and manner in which that resignation took effect. Resolving that doctrinal issue required substantive analysis and was for the Court of Appeal. The proposition could not therefore be characterised as manifestly wrong.

• Employment Appeal Tribunal: Appeal dismissed. The Tribunal upheld the Employment Tribunal’s conclusion that the claimant was not dismissed for unfair-dismissal purposes.
• Employment Tribunal: The unfair dismissal claim was dismissed because the Tribunal considered itself bound by Marshall (Cambridge) Limited v Hamblin [1994] ICR 962.