The Effective Date of Termination – Resignations With Immediate Effect

September 27, 2012

The Effective Date of Termination – Resignations With Immediate Effect

An employee’s effective date of termination (EDT), as defined by the Employment Rights Act 1996 (ERA), marks the start of the three-month period within which a claim for unfair dismissal must be lodged. Whilst in many instances the EDT will be the date on which the notice period expires, when an employee resigns without notice, the EDT is the date on which the resignation takes effect.

In Horwood v Lincolnshire County Council, the Employment Appeal Tribunal (EAT) ruled that the EDT is a ‘statutory construct specifically defined for the purpose of a legislative scheme of employment rights based on a personal contract’. When determining an employee’s EDT, the need for clarity and certainty is paramount.

Denise Horwood resigned with immediate effect from her job as practice manager of Lincolnshire County Council’s Older People’s Services Team after she was demoted to a social work post at a different office as a result of elements of a complaint from a colleague regarding her conduct being upheld by her employer. Her resignation was sent by special delivery on 28 January 2010 and date-stamped when it arrived at the Council’s offices on 29 January. At first, Mrs Horwood thought that her EDT was 29 January but a letter from her employer confirming acceptance of her resignation stated that this would take effect from the date of the letter, which was 2 February. A further letter regarding Mrs Horwood’s pension options also gave the date of termination of her employment as 2 February 2010 and her salary was paid up to that date.

Mrs Horwood subsequently brought a claim for constructive unfair dismissal. Her claim form, dated 28 April 2010, was sent to the Employment Tribunal (ET) that day by first class post and arrived the following day. Lincolnshire County Council argued that the claim had been submitted out of time because Mrs Horwood had resigned without notice and her EDT was 29 January, which was when her letter was date-stamped and opened at its offices. The latest date for presentation of the ET1 claim form was therefore 28 April 2010.

The EAT upheld the findings of the Employment Judge at a pre-hearing review. The determination of an employee’s EDT must by guided principally by the underlying purpose of the ERA, which is the protection of an employee’s rights. An employee is entitled to have a reasonable chance of knowing they have been dismissed before the time allowed for bringing a claim starts running. Such concerns do not arise in circumstances where the decision to leave is the employee’s own, however. In such cases, the communication is made when it has been received. Mrs Horwood’s letter was unambiguous and unequivocal and her resignation was effective once the communication was received and date-stamped by the Council’s administrative staff. The law does not allow determination of the EDT to depend upon such uncertainties as whether or not a letter has been read by the person to whom it has been addressed. The letter was received on 29 January and so her claim was presented out of time.

Furthermore, where an employee resigns with immediate effect and effectively communicates that decision to her employer, the EDT is fixed and cannot retrospectively be altered. The letter from Mrs Horwood’s employer regarding the date used for payroll and administration purposes was not capable of varying her EDT.

Lastly, the Employment Judge was entitled to find that it was reasonably practicable for Mrs Horwood to lodge her ET claim within the time allowed and she should not therefore be granted the benefit of an extension to the normal time limit.