Effective Date of Termination - Variation in Notice Period - Reasonable Practicability and Mental Impediment

Mon, 26 Mar 2012

By Nabila Mallick
In Willets v The Jenifer Trust for Spinal Muscular Atrphy, on a Rule 18 (3) (b) ETR 2004, hearing, the Employment Tribunal dismissed a claim for constructive unfair dismissal, deciding that the Claimant presented her claim outside of the three month time limit and that she had not demonstrated that it was not reasonably practicable to have presented the claim within the time limit. 
 
On appeal (UKEAT/0202/11/SM) HH Judge Peter Clark J allowed the Claimant’s appeal and made a declaration that the claim was not time barred. 
 
In doing so, he considered a number of authorities, on the construction of the effective date of termination (‘EDT’) and on what is a reasonable mental impediment to meeting the time limit? 
 
Section 97(1)(a) of the Employment Rights Act 1996 (ERA) provides:
"the effective date of termination
(a) in relation to an employee whose contract of employment is terminated by notice, whether given by his employer or by the employee, means the date on which the notice expires."
 
Relying on Section 97 (1) (a) ERA the Respondent argued that the claim was out of time, as the Claimant had first given her letter of resignation to the Respondent on 28th of June 2010, the contractual notice period was four weeks and so the effective date of contract was 27th July 2010. The Respondent argued that Section 97 did not allow for any other construction of the facts, and that even if the Claimant had been given a further week to think about her resignation that did not alter the EDT. The Respondent relied on the case of Maureen Fitzerald -v- University of Canterbury [2004] EWCA 143, where the Court of Appeal, led by the Judgement of Sedley LJ, had held that the effective date of termination is a matter of statutory construct and therefore statute governs the computation of time in this regard. 
 
The Respondent also argued that the Claimant could not rely on Respondent’s payment of wages until 6th August 2010 as this was a mere mistake in the Respondent not understanding the correct EDT. It was argued that it was not for the parties to decide the EDT. If the EDT was 27th July 2010, then it was irrelevant whether the Claimant worked or was paid until 6th August 2010. In making this argument the Respondent also relied on the case of TB Turbos Ltd -v- Mr CE Davies UKEAT /023/04, in which it was held that payment of wages and accumulation of other benefits up to the mistaken date cannot change the legally effective date of termination which is determined pursuant to the legislation.
 
The Respondent was successful in these arguments before the ET but the EAT concluded on the evidence that the Appellant was not mistakenly paid until 6th August 2010, and this conclusion led to a reversal of the entire decision. 
 
The EAT considered that there were two alternatives that arose from the facts either that there was an agreement between the two parties that period of notice was to be extended to 6th August 2010, as this was date that the Claimant stated would be the last working day and the Respondent agreed that this was to be the last working day. Alternatively, the Claimant gave notice on 28th June and then withdrew it, only to serve notice of resignation again on 9th July 2010, so that both parties understood that the EDT was 6th August 2010.
 
In making its decision the EAT made the following observations: notice once given by an employee cannot be unilaterally withdrawn (see Harris and Russell Ltd v Slingsby [1973] ICR 454) but it can, during the operational period of that notice be extended (see Mowlem Northern Ltd v Watson [1990] ICR 751) or shortened (see Palfrey v Transco [2004] IRLR 916) by agreement between the parties. Applying these principles to the facts, the Claimant’s resignation on 28th June 2010, whilst not accepted by the Respondent, was indeed notice that terminated the contract. The Respondent’s request to reconsider and the Claimant’s affirmation of her intention to resign on 9th July 2010 was not a withdrawal of her letter of resignation on 28th June 2010, if it was then it must have been with consent of the Respondent. The Claimant had stated in her letter of resignation of 28th June 2010 that her last working day would be 6th August 2010, and the Respondent had accepted this, there was clearly an agreement that the contractual four week notice period would be extended. The EAT stressed that whilst the parties can not agree the EDT, they can come to agreement to vary the contractual terms between them, such that the notice period can be shortened or extended. 
 
Alternatively, the EAT considered because the Appellant held a mistaken but genuinely held belief that her EDT was 6th August 2010, the represented a ‘mental impediment’ and so it was not reasonably practicable to have filed the claim within the three month time limit (see Brandon LJ in Walls Meat Co. Ltd v Khan [1979] ICR 52, 60F-61A, discussed at paragraphs 15-16 of HH Peter Clerk J’s Judgment in Defer-Wyatt v Brenig Williams (EAT/0270/03/DA 24 July 2003, unreported). The Claimant had been paid and had worked until the 6th August 2010. She had not taken legal advice, but understood from ACAS that there was a three month time limit, and giving consideration to that time limit, she made claim on 5th November 2010, at a time which she thought that she had met the three month time limit. 
 
Commentary
 
This decision rather importantly highlights the limitation to the court of appeal decision of ‘Fitzerald’ .Whilst Section 97 ERA does indeed preclude any agreement on the EDT, that does not mean that the parties are not free to make binding agreements varying the notice period with the consequential change to the EDT. However, if such agreement is reached, it would be wise of both parties to have such an agreement in writing to prevent any ‘Turbos’ type argument.
 
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