Employee resignations: Establishing the effective date of termination

Deciding on a resignation date

If an employee says that they have no alternative but to resign, when does the employment relationship actually come to an end? Stephen Moore of Ashfords looks at what employers can learn from the case law.

The effective date of termination

Calculating the effective date of termination (EDT) of employment of a worker is crucial – for example, in calculating whether or not the ex-employee has the requisite service to bring a claim for unfair dismissal (two years’ continuous employment, or one year if employed before 6 April 2012), whether or not a claim is brought in time (three months from the EDT for most claims) and for calculating the basic award in an unfair dismissal claim (based on the number of years of service). However, the EDT can be unclear when the employee resigns in the “heat of the moment” or without making it clear whether they are giving notice.

Secretary of State for Justice v Hibbert

In the recent case of Secretary of State for Justice v Hibbert, Mrs Hibbert’s grievances were not upheld by her employers, so on 29 June 2012 she wrote to her employer stating: “I am of the view that there has been a fundamental breach of my employment contract by my employer and I have no alternative but to resign my position.” The employer tried to persuade her not to resign and gave her five days to review her decision.

On 11 July 2012 the employer wrote accepting Mrs Hibbert’s resignation, but informing her that she was required to give four weeks’ notice and that her last working day would be 27 July 2012. Mrs Hibbert lodged an unfair dismissal claim more than three months after her letter of 29 June 2012 but within three months of 27 July 2012. The tribunal had to consider whether Mrs Hibbert’s claim was lodged in time, as she argued that her employment terminated on 27 July 2012.

The employment tribunal found Mrs Hibbert’s letter was “unambiguous as to resignation, but not as to the date on which the termination of the contract should take effect or as to whether any notice was given or the date on which it would expire”. It ruled that her resignation took effect from 27 July. However, the Employment Appeal Tribunal (EAT) ruled that the wording was unambiguous. There was no question of Mrs Hibbert resigning in the heat of the moment or being pressurised to do so, therefore her employment terminated on 29 June and her claim was out of time.

“Heat of the moment” resignations

Hibbert shows the importance of being certain of the date of resignation – when an employee does resign, the working relationship should also end. However, ambiguous resignations should be carefully considered, as the position of employees who resign in the “heat of the moment” is less clear.

The case of CF Capital PLC v Willoughby demonstrates that where notice of the intention to resign is given by “words that may quickly be regretted”, the employer should check the employee’s real intention and may wish to agree a resignation date. However, if the employee is determined to resign, then the EDT will be the date that resignation was provided.

In Kwik-Fit (GB) Limited v Lineham, an employee who had been given the opportunity to consider his decision, which was not impulsive, was found not to have resigned in the heat of the moment. Kwik-Fit shows that a cooling-off period should be given by an employer if there would be any doubt as to the intention of the employee. The EAT held in Kwik-Fit that a reasonable period of time would likely “be a day or two”.

The Court of Appeal in Sothern v Franks Charlesly & Co Limited stated that where there is “an immature employee, a decision taken in the heat of the moment … an employee being jostled into a decision by the employer”, words that appear unambiguous may not have the effect of a clear resignation.

Therefore, Hibbert re-confirms earlier case law that the employer should ensure there is no ambiguity regarding the EDT and that a cooling-off period should be provided to the employee if there is any doubt, as a resignation in the heat of the moment may not actually amount to a resignation.

FAQs from XpertHR
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Stephen Moore

About Stephen Moore

Stephen Moore is a partner at Ashfords.