Although the Court of Appeal held that the EDT was when the council stopped paying Mr Radecki his salary, it did not explain why non-payment of salary could effectively terminate the employment relationship. Furthermore, the Court of Appeal did not confirm exactly when the EDT was in this case – was it when the last payment of salary was made on 31 October 2006 or on some later date?
What you should do
As there is always risk that without prejudice negotiations may break down before agreement is reached, it is important that employers write to employees on an “open” basis to notify them of their EDT.
An employee can only bring a claim for unfair dismissal if he or she has the necessary period of continuous employment at the time of the effective date of termination (EDT), and the claim is presented to the tribunal before the end of the three-month period beginning with the EDT.
Suspension of employment
Mr Radecki was employed by Kirklees Metropolitan Council. On 21 October 2005, shortly after his employment started, he was suspended pending disciplinary investigations.
Radecki and the council entered into without prejudice negotiations between August and October 2006. Although a termination date of 31 October 2006 was envisaged during these negotiations, the parties did not reach a binding agreement. The council stopped paying Radecki on 31 October 2006 and communicated this to his representative.
In January 2007, Radecki expressed dissatisfaction with the terms of a compromise agreement proposed by the council to his union. He phoned the council in February 2007, rejecting its proposals and querying why he had not been paid since 31 October 2006. On 5 March 2007, the council wrote to Radecki advising that he had been terminated on its payroll system on 31 October 2006 and that his employment had ended on that date. A P45 was also issued, showing the EDT as 31 October 2006.
The tribunal found that Radecki’s unfair dismissal claim was time barred on the basis that there had been a consensual termination and that the dealings between the parties during the without prejudice negotiations was consistent with an EDT of 31 October 2006.
Error of law
On appeal, the Employment Appeal Tribunal decided the tribunal had made an error of law in treating a termination date proposed during without prejudice negotiations as the EDT. It was held that the EDT had occurred when there had been an unequivocal statement from the council on 5 March 2007 that the employment was at an end. This resulted in the unfair dismissal claim being in time.