Matthew Riley v Direct Line Insurance Group PLC

A termination agreed freely by employer and employee is not a dismissal for the purposes of section 95(1)(a) of the Employment Rights Act 1996. The question is one of fact and degree, requiring the tribunal to examine the reality of the parties’ dealings. Clear evidence of free consent is required, particularly where dismissal has serious consequences. Deceit, coercion, undue pressure or a direct threat of dismissal prevents a finding of consensual termination.

An appellate court will not interfere with adjustments made for a disabled party unless the approach was unreasonable or caused substantive unfairness. A tribunal may also refuse a just and equitable extension of time where, after the alleged failures, the claimant freely chose an agreed termination rather than pursuing a return to work.

The claimant, who was disabled by autistic spectrum disorder, anxiety and depression, had received payments under a permanent health insurance scheme during a prolonged absence. After an unsuccessful phased return to work, he agreed to end his employment so that the insurer could pay him directly until state pension age.

The Employment Tribunal at Leeds held that the termination was consensual and therefore was not a dismissal. It rejected the disability-discrimination dismissal claims and found two failures to make reasonable adjustments, but ruled those claims out of time and declined a just and equitable extension. The claimant appealed on the fairness of adjustments at the hearing, consensual termination, and the refusal to extend time.

1. Appeal dismissed. The Employment Tribunal was entitled to find that the claimant’s employment ended by the parties’ free mutual consent. The statutory question was who, in reality, terminated the contract. It was fact-sensitive and required attention to substance rather than the later terminology of dismissal in the employer’s letter.

2. The Tribunal had ample evidence that the claimant understood the proposal, was not tricked, coerced or pressured, had time to consider it, made enquiries of the insurer, and proactively accepted the direct-payment arrangement. The employer’s initiation of the meeting was not determinative. Nor did the Tribunal treat mutual benefit alone as establishing consent. The later letter did not alter the finding that an agreed termination had occurred before it was written.

3. The Tribunal did not err by failing expressly to distinguish consent to termination from consent to dismissal. Its findings addressed the substance of the arrangement, and the case was not analogous to a redundancy arrangement in which a dismissal might be needed to secure the contemplated benefit.

4. The Tribunal was permitted to vary the earlier direction that cross-examination questions be written down. It reasonably acted on the claimant’s expressed preference that straightforward questions be asked orally, with written questions available if needed. No specific prejudice or substantive unfairness from that course was shown.

5. The refusal to extend time for the reasonable-adjustments claims was within the Tribunal’s discretion. It could give substantial weight to the claimant’s later informed choice to agree the termination and take the insurance benefit rather than seek a return to work. It had balanced that factor against the short delay and prejudice. Its concise reasons were adequate.

• Employment Appeal Tribunal: Appeal dismissed: [2023] EAT 118.
• Employment Tribunal, Leeds: Judgment promulgated on 11 November 2019. The Tribunal found no dismissal because the termination was consensual, rejected the dismissal discrimination claims, and refused to extend time for reasonable-adjustments claims.