Dismissal or Mutually Agreed Termination

Dismissal or Mutually Agreed Termination

I have read recently that the Employment Tribunal has been considering the difference between a dismissal and a mutually agreed termination.
This is an interesting point as such terms are often used when referring to redundancies and in settlement agreements (formally compromise agreements) and they often appear to be interchangeable in their usage.
As with many things in employment law there is no hard and fast rule and each case presented to the Tribunal will be determined on its own facts.
An example of such a consideration can be seen in the case of Francis v Pertemps Recruitment which was considered by the Employment Appeals Tribunal (EAT) in June 2013.
In this case Mr Francis was employed by Pertemps an agency. He was placed in work with a client whose identity was specified in his contract of employment. In December 2012 after more than 2 years in his employment that client no longer had need for the services of Mr Francis. Pertemps therefore offered Mr Francis the choice of either taking two weeks’ notice plus redundancy pay or two weeks’ notice with the agency looking out for new work with a view to him working for another client.
At first Mr Francis chose the latter. However then he changed his mind and chose to accept the notice and redundancy package. The HR department wrote to him in order to confirm that his position was redundant and that he was to treat the letter as a"formal notice of redundancy". In addition the letter informed Mr Francis that he had a right to appeal"against the decision to terminate [his] employment". Mr Francis did exercise his right of appeal although this was unsuccessful.
When Mr Francis claimed unfair dismissal in the Employment Tribunal and Pertemps argued that there was no dismissal but that the employment had ended consensually by mutual agreement of the parties. If Mr Francis was not found to have been dismissed then he would have had no right to claim that he was unfairly dismissed.
The Employment Tribunal accepted the agency’s argument as it construed the contract as providing that Mr Francis was to work for a specific client which it had the right to do. However Mr Francis appealed against this decision and it was overturned by the EAT.
The question of whether there was a dismissal for the purposes of an unfair dismissal claim depended on whether the contract of employment had been terminated by the employer. All of the language used was by the HR department was consistent with a termination by the employer. For example both of the choices offered to Mr Francis involved his being given notice. He did not have the choice to remain in employment.
The employer argued that the terms"notice" and"redundancy" were used loosely and were not intended to be taken by their formal meaning. They also argued that the right to appeal was"meaningless". However these arguments were rejected as being unrealistic.
The EAT therefore allowed the appeal and found that Mr Francis had in fact been dismissed.
This example shows that the question of whether or not an employee is dismissed relies to a large extent on the wording used by the employer and the exact circumstances in a particular case. If an employee has no choice but to leave his employment and is allowed the right to appeal against the decision then this suggests they have no control over the termination of their contract and it is unlikely they would have been found to have mutually agreed to their termination.
If you are currently being taken through a redundancy process by your employer or you have been offered a settlement agreement in order to terminate your employment we recommend that you take independent legal advice. Please feel free to contact our dedicated team of employment lawyers who will be happy to discuss your situation and assist you where they can.
Written by
Anthony Fox

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