You can lose your shirt if you get the “Effective Date of Termination” wrong
Identifying the correct date of termination of an employment contract is crucial, and getting it wrong can be costly, as one employer recently discovered.
An employee has three months from the EDT to present a claim to an employment tribunal
So, it is extremely important for both parties to be crystal clear as to when the actual effective date of termination (EDT) took effect. The starting point in a dismissal without notice is the date that the termination took effect -and where notice is given, will generally come into effect upon expiry of the notice.
In Hawes & Curtis -v- Arfan & Mirza, the employees were summarily dismissed on 5th October 2010. Normally this would be the EDT. However the employees then appealed under the employers (a well known gentleman’s tailor) internal disciplinary procedures, but the appeal was dismissed. Following the appeal the employer wrote to the claimants informing them of the decision and advised that the EDT was 4th November 2010, the date of the appeal decision. The employers had also continued to pay the Claimant until that date.
In reliance upon the Respondent’s representations, the Claimant submitted their claim form within 3 months of the 4th November but later than 3 months after 5th October 2010, citing the later date as the EDT. The Respondent’s then challenged the date claiming that the EDT had been on the earlier date.
By a majority decision the Employment tribunal held that the EDT was the 4th November 2010 as the employers had pinned their tie to the later date, despite the employers argument that once an EDT is set (in this case the earlier date) it cannot be changed. This case could perhaps have been avoided had the employers cut their cloth more carefully and excluded the final flourish in confirming the EDT as the later date.
Lawspeed Tip:
Generally the EDT will remain in place until such time as an employee succeeds in their appeal and is reinstated, or a variation of the date is agreed. Whilst it may appear a fair thing to do to pay an employee during the appeal period, payment should not be made if the risk of a later EDT being found is to be avoided.
Some unscrupulous employers have been found to try to take advantage of this by dragging their heels when dealing with appeals in order to reduce the time that is available to their employee to present a claim.
Because of this, employees are often forced to present their claim while the appeal is still in process to avoid their claim being made out of time.
By Deborah Francis, Head of Employment at Lawspeed – Tel: 01273 236 236
Adrian, a highly experienced lawyer, founded Lawspeed in 1997. He is responsible for developing our extensive portfolio of products and services, including the widely used Lawspeed contract templates. Adrian is an expert on “recruitment law” and specialises in contracts, regulatory compliance, employment status and dispute handling. He is chair of the trade body the Association of Recruitment Consultancies, the only lawyer lead recruitment trade body in the UK. Adrian and his co-director Ravi devised Standards in Recruitment as a vehicle for helping drive up standards and compliance in the industry.
Adrian is our lead in discussions with the government over regulatory evolution. Apart from assisting with client support, Adrian’s primary role is research and development into methods of business delivery, our latest service Proterms being his most recent project. Adrian heads our IR35 lawyers team.