Gisda Cyf v Barratt

The effective date of termination (EDT) in relation to a contract terminated without notice is the “date on which the termination takes effect” (section 97(1) of the 1996 Employment Rights Act). In Gisda Cyf v Barratt, the House of Lords said that this was when the employee actually read the letter of dismissal and not the date when it arrived at her home.

Basic facts

After attending a disciplinary hearing held on 28 November 2006, Ms Barratt was told she could expect to receive a letter by 30 November telling her the outcome of the hearing.

A letter of summary dismissal was sent by recorded delivery on 29th and delivered the next day, by which time Ms Barratt was in London visiting her sister who had just had a baby. The letter was signed for by someone else at her home. She did not inquire about the letter while she was away and did not read it until 4 December. She then lodged a claim for unfair dismissal and sex discrimination on 2 March 2007.

The company argued that her claim was out of time because the termination of her contract took effect on 29 November when it wrote and posted the dismissal letter.

Lower court decisions

The employment tribunal followed the approach laid down in Brown v Southall & Knight. That is, when an employer tells an employee by letter that they have been summarily dismissed, the EDT is the date when they actually read the letter and knew of the decision or, at any rate, had a reasonable opportunity of reading it.

And the EAT and Court of Appeal agreed, emphasising a need for fairness in the dismissal process: “The proposition that an employee may be summarily dismissed and that time may begin to run against the employee before the employee actually knows of the dismissal sits uncomfortably with a personal contract and with the scheme of the legislation that an employee is entitled not to be dismissed unfairly and to have 3 months, and no less, in which to present a complaint of unfair dismissal.”

Supreme Court decision

And the Supreme Court agreed that when an employee is told in a letter that they have been dismissed, their contract should not be terminated until they have read the letter or had a “reasonable opportunity” of reading it.

In this case, the question was whether Ms Barratt could have found out what the letter said while she was away. The Supreme Court said that the tribunal was right not to concentrate on what was “practically feasible” as that might “compromise the concept of what can realistically be expected”.

Instead, it said that it was reasonable for her not to want the letter to be opened and read out to her over the phone but to prefer to read it alone when she got back. The fact that she could have found out what was in the letter while she was away was a factor to be considered when deciding if she had had a “reasonable opportunity” to discover what was in it, but the tribunal was not wrong to also take her other circumstances into account.

It added that it would be unfair for time to begin to run against an employee until they had had a reasonable chance to find out they had been dismissed. As a matter of policy, it said that it was preferable to interpret the time limit legislation in a way that favoured the employee, rather than follow strict contractual laws concerning termination of employment.

As EDT is a statutory construct, it was there to protect and safeguard the rights of employees who are in a more vulnerable position than employers.

Comment

Although it is surprising that a small Welsh charity for homeless youngsters should choose to fight this to the Supreme Court in the teeth of unfavourable existing authorities, it is nevertheless a welcome decision for claimants. As well as settling this issue, a wider benefit is the Court’s express reiteration that employees are, as a class, more vulnerable than employers, and that it was vital to knock off the hard edges of pure common law when interpreting and defending an employee’s rights.