A recent case has demonstrated that that it is very difficult for employers to withdraw a notice of dismissal, even if a there has been a genuine misunderstanding with the employee. Importantly, this particular case reinforces the importance of ensuring any termination of an employee’s contract of employment is done carefully and that terms such as ‘termination’ or ‘dismissal’ are only used if there is full intention to dismiss an employee.
The case involved Willoughby v CF Capital plc. To help reduce business costs, CF Capital proposed to their sales team the option of converting to self-employed contractors rather than remaining as employees. Ms Willoughby, an employee, expressed an interest in this conversion provided she received full details of the proposal. Three weeks later, Ms Willoughby still had not received the details.
Subsequently, on 22 December, Ms Willoughby received a letter from her manager, which outlined that she would begin working as a self-employed contractor from 1 January 2009. The letter indicated: “The termination of your existing employment contract will be effective from 31 December 2008.” Ms Willoughby told her manager she didn’t want to accept the move to self-employed status, and although her manager tried to reassure her there had been a misunderstanding and that if she wished her employment for CF Capital could carry on as before, Ms Willoughby wasn’t happy. She left the company and pursued a claim for unfair dismissal.
Ms Willoughby lost at the Employment Tribunal hearing, as the Tribunal said she had not been dismissed due to the ‘special circumstances’. The case went to appeal, and ultimately ended up in the Court of Appeal, where the original tribunal decision was overturned. The Court of Appeal held that the company had in fact dismissed Ms Willoughby and that she was entitled to the take the letter from CF Capital at face value, particularly in circumstances where the wording of the letter was clear and unambiguous. The case will now go back to an employment tribunal to determine whether the dismissal was fair or unfair.
As a general rule, an employer may have the right, in “special circumstances”, to withdraw a dismissal but these “special circumstances” will only apply when words are used in the heat of the moment and retracted soon after. The same applies to an employee who resigned in the heat of the moment and then retracts the resignation. In this case, the Court held that CF Capital’s mistake in issuing a notice of termination before agreement with the employee had been reached did not fall into this category.
For further guidance on employment law and dismissals, our employment team would be happy to assist.