COSMECEUTICALS LIMITED v PARKIN [2017] UKEAT/0049/17/BA

27 June 2017

Carolyn D’Souza of 12KBW appeared on behalf of the Appellant Respondent. Emily Read, also of 12KBW, appeared on behalf of the Claimant (and Respondent on appeal).  

 

Summary

The EAT has confirmed that an employer’s immediate withdrawal of an employee’s contract amounted to a summary dismissal, and that notice purportedly given after the dismissal did not move the effective date of termination (‘EDT’) to the end of the notice period. The EDT is the date on which the summary dismissal is communicated to the employee.

 

Background

The Claimant (‘C’) was employed by the Respondent (‘R’) as Managing Director of its business manufacturing and distributing professional skincare and makeup products. R developed serious concerns about C’s performance. R had raised these concerns with C but failed to make clear that her job might be in danger as a result.

Immediately following C’s return from a two-month paid sabbatical, R’s Chairman held a meeting with C (‘1 September meeting’) where he referred to the performance concerns and notified C that she could not return to her role. R was later found to have made a clumsy attempt to consider alternative roles, albeit none were found to be comparable.

Three days after the 1 September meeting, C was placed on gardening leave until such time as a further meeting could be scheduled. C refused to meet again except to discuss settlement. Following some back-and-forth, R subsequently wrote to inform C (for the “purposes of clarity”) that she was now being given notice of termination of her employment, which would come to an end on 23 October 2015.

 

First instance – before the ET

C brought a claim for unfair dismissal. The ET upheld C’s claim, finding that her dismissal had indeed been procedurally unfair since R had failed to give her the opportunity to put her case on the question of poor performance. A 20% Polkey deduction was applied.

Both parties had agreed in their pleadings that the EDT was 23 October 2015, the end date of the purported notice period.  However, the ET raised during the hearing whether the withdrawal of contract amounted to a dismissal, and went on to find that the Claimant was dismissed on 1st September, but that the EDT was 23rd October 2015.

An EDT of 23 October 2015 meant the claim had been brought within the statutory limitation period; an EDT of 1 September 2015, the date of the communication by R to C that she could not return to her role, meant the claim had been brought out of time.

 

On appeal – before the EAT

R appealed to the EAT.

R challenged the ET’s finding that the EDT was 23 October 2015 (the end of the purported notice period) on the following basis:

  • it constituted an error of law and a misapplication of section 97(1), Employment Rights Act 1996 (‘ERA’) given the ET’s finding that C had been dismissed on 1 September 2015; and
  • it constituted an error of law in that the ET had failed to appreciate that the change in terms and conditions it had found constituted a dismissal, pursuant to Hogg v Dover College [1990] ICR 39 EAT, gave rise to a summary dismissal and thus to an EDT of 1 September 2015.

 

Respondent’s submissions on appeal

 Notwithstanding that R had not put a positive case before the ET that C was dismissed on 1 September, the ET had unambiguously found that C was dismissed on that date, by application of the principle identified in Hogg, namely that a dismissal arises where an employer unilaterally imposes different terms of employment, thereby effectively withdrawing the old contract.

Having so found, the ET should have gone on to find that C was summarily dismissed since it had also concluded that notice was only given subsequently by letter. Moreover, in case it was suggested that the subsequent giving of notice was an indication that the previous communication was not a summary dismissal, it was clear that the ET had found that C had been dismissed on 1 September. If she had already been dismissed on 1 September, there could be no subsequent giving of notice.

 

Claimant’s submissions on appeal

 C opposed the appeal.  It reminded the EAT of the important principle that there should be no scope for doubt as to an EDT the employee needed to know the precise date and needed to be sure of it at the time of the EDT. There was much evidence to support an EDT of 23 October 2015, such as C’s P45, payment of wages until that date, a PILON, and repeated reminders during the period by R to C that she remained an employee. Moreover, there was no finding by the ET that C had understood she had been dismissed summarily on 1 September, albeit the ET judgment did suggest a finding that there had been a communication of dismissal at the 1 September meeting.

C pointed out that it was important to distinguish between the decision by R to dismiss versus the actual fact of the dismissal taking place. All that had happened at the 1 September meeting was a communication of a decision that still fell to be implemented.

 

Held

HHJ Eady QC, sitting alone in the EAT, allowed the appeal.

Despite the apparent agreement of the parties that the EDT was 23 October 2015, the EDT is a statutory concept which cannot simply be agreed by the parties. Nor is it a requirement that either party raise it in advance.

The ET had found that this was a direct ‘dismissal by conduct’, in line with the principles set out in cases such as Hogg. Thus, 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 the purposes of section 95(1)(a) ERA. To that end, communication is key and it is common ground that an employee cannot be deemed to have constructive knowledge of their dismissal (Gisda Cyf v Barratt [2010] IRLR 1073).

As to what the ET found had happened on 1 September, R’s chairman had communicated to C that her contract of employment as Managing Director had been brought to an end. The communication was sufficient for statutory purposes to amount to a dismissal. The ET found that R did communicate the dismissal – the immediate termination of her contract – to C on 1 September. She was therefore summarily dismissed on that day. The dismissal was immediate and duly determinative of the EDT.

It is strictly correct that Hogg did not lay down the principle that such a dismissal is necessarily summary in nature (allowing the hypothetical possibility that it may be done on notice), although HHJ Eady QC noted that she could not think of an example of such a dismissal which would not be summary. That said, she deemed it unwise to rule out the possibility that one such example could arise. Nonetheless, the relevant question for the EAT was what the ET found to have happened in this case. This much was clear: the ET had found that R communicated plainly to C at the 1 September meeting that her existing contract of employment was at an end. The ET had not found, contrary to C’s argument, simply that R had reached a decision that this would happen in the future.

Even with the acknowledgement that certain passages of the ET judgment could be read as it having conflated the giving of notice and the fact of dismissal on the termination of the employment contract, it was not possible to read its decision as having found that C was dismissed on notice. In any event, where there has been an effective dismissal there can be no subsequent placing on garden leave or giving of notice since the contract has already come to an end.

Since C’s case was presented out of time, the EAT returned the case to the same ET to determine whether it was reasonably practicable that C presented her claim within time or, if not, whether she presented it within such time as was reasonably practicable thereafter.

 

Jeremy McKeown