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Internal appeals and the EDT: the statutory regime reigns supreme

Internal appeals and the EDT: the statutory regime reigns supreme

Tamar Burton considers the impact of an internal appeal decision to change a summary dismissal to a dismissal with notice on the effective date of termination (“EDT”).

This factual scenario was considered by the Court of Appeal in Rabess v London Fire and Emergency Planning Authority, a case concerning the interplay between the common law principles of dismissal and the statutory construction of the EDT.

Ed Williams and Caroline Musgrave appeared for the Appellant instructed by Anthony Gold.  

The Facts

Mr Rabess was a firefighter. He was summarily dismissed for gross misconduct and his last day of work was 24 August 2012.

He brought a claim for unfair dismissal on 3 January 2013.

Several days later his employer’s internal appeal process concluded. It found that Mr Rabess was guilty of misconduct rather than gross misconduct. Mr Rabess was therefore entitled to notice pay. The dismissal remained in place on the basis that Mr Rabess had a live final written warning on his file. Contrary to his employment contract, Mr Rabess was paid in lieu of notice. His dismissal date was stated to remain as 24 August 2012.

The ET and EAT’s decisions

Mr Rabess’ complaint to the tribunal had been presented more than three months after his dismissal on 24 August 2012. In light of the outcome of the internal appeal, the issue for the employment tribunal and the EAT was when was Mr Rabess’ EDT?

The EDT is a statutory concept. S. 97(1)(a) ERA 1996 defines the EDT as, where the employer has given notice, the date on which the notice expires and s. 97(1)(b) ERA 1996 states that where the contract of employment is terminated without notice the EDT is the date which the termination takes effect.

The Respondent contended that the EDT was 24 August 2012. Mr Rabess contended that the findings of the internal appeal had altered the EDT to either the expiry of the new notice period or alternatively the date when Mr Rabess accepted his employer’s repudiatory act, at the time he received notice pay in early 2013.

The employment tribunal dismissed his claim. It held that the effective date of termination was unaltered by the outcome of the internal appeal. The EAT upheld this conclusion on appeal.

The Court of Appeal’s decision

Mr Rabess appealed to the Court of Appeal.

The single issue for the Court of Appeal was what is the EDT when, on appeal, an employer substitutes a summary dismissal to dismissal on notice and then purports, in breach of contract, to retrospectively dismiss with a payment in lieu of notice as from the original dismissal date?

Both parties accepted that an internal appeal might change the EDT: Hawes & Curtis Ltd v Arfan [2012] ICR 1244. In that case the EAT held that if an appeal expressly varied the date on which the termination took effect it would alter the EDT.

The Appellant argued that, in light of the Supreme Court’s decisions in Gisda Cyf v Barratt [2010] ICR 1475 and Geys v Société Générale [2013] ICR 117, that s. 97(1)(a) ERA 1996 should be construed liberally in favour of the employee. It should be construed in such a way that the EDT is when the notice would have validly expired or, alternatively, when the employee learns of and accepts the repudiatory breach of contract.

The Appellant contended that the elective theory of termination (i.e. that a repudiated contract is not terminated unless and until the repudiation is accepted by the innocent party) should be applied to the question of when dismissal takes effect. In the context of wrongful dismissal, the Supreme Court in Geys rejected the automatic theory of termination and held that acceptance of repudiation was required. To hold that the elective theory applies to wrongful but not to unfair dismissal means that there could be two different dates of termination of the same employment contract.

The Appellant also argued that the approach contended for by the Appellant also provides the most effective protection to employees. If the EDT is the date of the original dismissal, an employer can benefit from the fact that it had twice acted in breach of contract by both dismissing for gross misconduct and retrospectively dismissing with payment in lieu of notice.

The Court of Appeal dismissed Mr Rabess’ appeal.

It held that the EDT could be retrospectively altered by an internal appeal: Hawes & Curtis Ltd v Arfan [2012] ICR 1244. The question was whether in this case the outcome of the internal appeal had made a difference to it.

Up until the date of the appeal Mr Rabess could only have understood that the dismissal had occurred on 24 August 2012 and that he had three months to bring a claim. The Court rejected the submissions that the EAT’s conclusion that the effective date of termination was on 24 August undermined the employee’s rights by allowing the employer to take advantage of being the decision-maker in the internal appeal process.

The EDT was a question of fact and was not shifted after the internal appeal. The Court held that nothing had happened in Mr Rabess’ case to change the date of dismissal.  

Applying Robert Cort & Son Ltd v Charman [1981] ICR 816, where an employee was summarily dismissed the EDT was the date of the summary dismissal, the outcome was unchanged even if the employer had committed a repudiatory breach of contract. The Court of Appeal held that this outcome was consistent with Geys. The EDT was “untrammelled by contract laws” and even if the employee had accepted a repudiatory breach of contract when he accepted the payment in lieu of notice, Cort held that the EDT for the purpose of s. 97 ERA 1996 was the actual date of dismissal.

Analysis

The Court of Appeal found on the facts that Mr Rabess was fixed with the initial date of dismissal as his EDT.

However, the decision has wider consequences. It may mean that an employer, who recognises on appeal that they have acted wrongly by summarily dismissing an employer for gross misconduct, can benefit from that erroneous decision when it comes to limitation in employment tribunal litigation as the date of the initial dismissal can remain set as his or her EDT.

It also means that there may be two different dates of termination under the same contract for an unfair dismissal claim and a wrongful dismissal claim.  

Those advising on the EDT for the purposes of calculating limitation where an appeal has altered the dismissal from summary to dismissal with notice will need to look carefully at the express words used in the appeal procedure and the outcome letter in order to determine whether the EDT has been changed by the appeal.

In light of the high hurdle of the “reasonably practicable” test in s. 111 ERA 1996 a cautious approach should be taken when calculating time limits and practitioners should be aware of the potential for different dates for wrongful and unfair dismissal claims.

 

Cloisters has significant expertise in advising and representing clients in relation to all aspects of employment law.  Please contact our clerks for further assistance.

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