This question was discussed in the recent case of Riley v Direct Line Insurance Group PLC. The evidence showed the parties had discussed (and mutually agreed) that the employee’s employment would terminate, at which point the employee would receive incapacity payments under a private health insurance scheme until retirement. Following this agreement, the employer wrote to the employee confirming that he was dismissed on the grounds of capability due to ill health.
The Claimant brought claims in the Employment Tribunal for unfair dismissal and failure to make reasonable adjustments. His claims were dismissed in their entirety.
In order for a Claimant to successfully bring a claim of unfair dismissal under s.95 of the Employment Rights Act 1996, there must be a dismissal. In this case, the Employment Tribunal found there had been no dismissal within the meaning of s95(1)(a) of the Employment Rights Act 1996 as the employer had not terminated the Claimant’s employment. It found the Claimant’s employment was terminated by consent in the final meeting.
In determining whether there was a dismissal, the Employment Tribunal used the evidence to determine the realities of the situation rather than rely on the form of the relevant correspondence. In this example, the reality was that a mutual agreement had taken place but the employer mistakenly labelled this as termination in correspondence. There was no deceit from the employer and the evidence showed the employee actively pursuing the arrangement proposed in the final meeting because he wanted to take advantage of the private health insurance scheme.
The Claimant appealed the decision on the basis that the Tribunal among other things had not considered the distinction between an employee consenting to termination of his employment and an employee consenting to be dismissed. The Claimant argued the latter (which would have satisfied the requirements under s95(1)(a) Employment Rights Act 1996) had not been considered by the Tribunal but the Employment Appeals Tribunal disagreed.
Whilst the concept of an employee consenting to dismissal was not expressly discussed in the original Judgment, the Employment Appeals Tribunal were satisfied that this legal issue was in the Tribunal’s contemplation when it viewed the final letter from the employer and had therefore been adequately considered. The Claimant’s appeal was dismissed.
This case highlights the real risk to an employer with any termination of employment, however amicable. In order to minimise that risk, the employer must be clear and consistent in correspondence with the employee.
