What is the Effective Date of Termination?
The Employment Appeal Tribunal (“EAT”) have ruled in the case of Cosmeceuticals Ltd v Parkin that where there is a summary dismissal (termination effective immediately) and notice is subsequently given, the effective date of termination ("EDT") does not move to the end of the notice period.
Ms Parkin was the Managing Director of a skincare and beauty product producer, Cosmeceuticals, who had concerns over her performance. When Ms Parkin returned from sabbatical on 1 September 2015, the Chairman of Cosmeceuticals notified Ms Parkin that she would not be continuing her employment with the company. Three days later Ms Parkin was put on garden leave and on 29 September the Chairman wrote to her (for the sake of clarity) to give notice of termination ending on 23 October 2015.
Ms Parkin subsequently brought a claim in the Employment Tribunal (the “Tribunal”), with both parties agreeing that 23 October 2015 was the EDT. The Tribunal found that on 1 September 2015 Ms Parkin had been told that her employment had ended and that had constituted communication of the dismissal. However, the Tribunal held that the EDT fell at the end of the subsequently-given notice period.
Why did the EAT find the Tribunal’s decision incorrect?
The EAT found that the Tribunal had made a factual finding; that there had been an effective dismissal without notice on 1 September 2015 and Cosmeceuticals had then sought to place Ms Parkin on garden leave and give her notice. However, the EAT held that the EDT was 1 September 2015 and that was the relevant date for determining whether or not Ms Parkin’s claim was presented in time. The EAT held that the EDT is a “statutory construct under which the date of communication to the employee of summary dismissal is the EDT, even if the employer should have given notice but failed to do so”.
To avoid any uncertainty over an employee’s EDT, employers should ensure that they have accurate and precise termination and notice clauses within each employee’s contract of employment.
For further information on this topic, please do not hesitate to contact Millie Kempley or you can call a member of the Employment Team on 0345 070 6000.