The Issue
Claims under some statutory employment rights must be brought
within a limited period of dismissal. So clarity as to the date a
dismissal takes effect is crucial.
Statute states the effective date of termination (or EDT) is
either:-
- the date on which contractual notice given by either party expires, or
- where notice is not given (as on a summary termination for gross misconduct) the date on which the termination takes effect.
Case law provides that a dismissal takes effect when
communicated to the employee.
Verbal only communication of dismissal may breach the new ACAS Code
of Practice requiring disciplinary process outcomes to be in
writing.
The time when a written communication takes effect has been
confirmed recently by the Court of Appeal which found that where a
business sent a letter by recorded delivery summarily dismissing an
employee without notice but the letter was signed for by someone
else while the employee was away on holiday, the dismissal was not
communicated and so did not take effect until the employee's
return from holiday several days later. The dates on which the
letter was written, sent or delivered were irrelevant but employees
who deliberately avoid receipt cannot take advantage of this
rule.
The Consequences
Businesses who dismiss without notice face uncertainty as to the exact EDT.
A later than expected EDT could:-
- allow an employee to gain a year's service and the right to claim unfair dismissal;
- result in a longer time for the employee to submit their unfair dismissal claim;
- entitle the employee to contractual benefits, bonus or commission payments which would otherwise not be due;
- increase an employee's entitlement to holiday pay in lieu on termination.
The Solution
Businesses should consider if dismissing without notice:-
- checking and recording in writing at the disciplinary hearing whether the employee has any booked or planned holiday or other absence in the foreseeable future and confirming the employee's availability to receive the decision in writing by post and/or email;
- ask the employee to provide a personal email address and then mark the email sending the letter with a "read receipt";
- hand deliver without notice dismissal letters requiring the employee's signed acceptance of receipt only;
- if there is a risk that an employee may not be available to receive a letter, confirm a summary dismissal direct to the employee in person in a meeting after the disciplinary process concludes and hand over a confirmatory letter.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.