Employment Law Cases

Cosmeceuticals v Parkin

A clear communication that a contract has ended determines the effective date of termination - it’s not something that the parties can simply agree.

The law defines the date of termination for the purposes of unfair dismissal, redundancy payments and certain other employment rights. It is called the ‘effective date of termination’ (EDT). Disputes about the EDT most commonly crop up where time limits are disputed as the EDT is the date from which time limits start to run for the purposes of making certain tribunal claims.

Background

Cosmeceuticals had concerns about the performance of its managing director, Ms Parkin. After Ms Parkin took a three-month sabbatical, the Chairman of the Board told her, on 1 September, that she could not return to her role and there were ‘clumsy attempts at discussing alternative roles. She wrote to say she believed she had been dismissed from that date or forced to resign. Ms Parkin was then put on garden leave and when attempts to settle failed on 29 September Cosmeceuticals wrote to her ‘for the sake of clarity’ to tell her that she was now being given notice of termination of her employment, which would come to an end on 23 October.

Both parties accepted that the EDT was 23 October, but it was only when the tribunal raised it, did Cosmeceuticals take the point. If Ms Parkin’s EDT was 23 October, as the tribunal found, her claim of unfair dismissal would be in time, but if it was 1 September, it would be out of time. Cosmeceuticals appealed against the tribunal decision that the EDT was 23 October.

EAT decision

Allowing the appeal, the EAT said that the EDT is a statutory concept. Here the tribunal had found that Ms Parkin had been told that her contract of employment was at an end on 1 September. That was effective to bring about her summary dismissal, even if her employer should have given notice but failed to do so. The tribunal was wrong to hold that the dismissal wasn’t effective until 23 October. The case was sent back to the same tribunal to consider whether it was reasonably practicable for Ms Parkin to have presented her claim in time.

Link to judgment: http://www.bailii.org/uk/cases/UKEAT/2017/0049_17_2706.html

Comment

This case is a useful reminder that not everything in an employment contract is within the gift of the employer and employee - some things derive from statute and cannot be changed, regardless of any agreement by the parties. Where an employer makes clear it is withdrawing the contract of employment — even if purporting to replace it with a new contract — that is the communication of a dismissal for statutory purposes and will determine the EDT.