Sandhu v Jan De Rijk Transport Ltd

If someone is forced to resign, the courts have established that is effectively a dismissal. In Sandhu v Jan De Rijk Transport Ltd, the Court of Appeal said that by agreeing terms to end his employment, Mr Sandhu had done no more than salvage something from the inevitable fact he was going to be dismissed.

Basic facts

Mr Sandhu started working for Jan de Rijk Transport Ltd as an operations manager in 2000. At the end of November 2002 he was summoned to a meeting on 6 December but was not told in advance what it was about.

Mr Sandhu alleged that the senior director of operations opened the meeting by telling him that he was being dismissed because of problems with suppliers and a colleague.

Both parties agreed the terms of a letter on the same day, stipulating that Mr Sandhu’s contract would not be terminated until 1 April 2003, although he stopped work for them on 12 December 2002. The company relied on the terms of the letter to argue that he resigned of his own free will.

Following the meeting, Mr Sandhu wrote to the company asking to appeal the decision and stating categorically that he had not agreed to leave. The company refused to discuss the matter further, and as a result Mr Sandhu claimed unfair and wrongful dismissal.

Tribunal decision

The tribunal said it was aware from case law that if an employee is forced to resign, it is effectively a dismissal. Alternatively, if someone chooses to resign rather than be disciplined, that is a resignation.

The tribunal went on to say that this case was different as Mr Sandhu was invited to a meeting at which the company told him it no longer had any trust in him and wanted to terminate his contract. At that point, had he walked away, the company would have been deemed to have dismissed him and given the lack of procedure, it would have been unfair.

But Mr Sandhu stayed to sort out a way of leaving that was to his obvious financial benefit. The tribunal also said that, from the facts, it was clear that he was fully aware of the company’s concerns leading up to the meeting and that was why he had negotiated a package that was financially beneficial to him. It concluded, therefore, that he had resigned of his own free will.

EAT decision

The EAT agreed with the tribunal, saying that it had asked the right question – that is, what caused Mr Sandhu to leave? Was it the threat of dismissal or the financially beneficial terms that the company offered to him if he agreed to terminate his contract?

It concluded that the tribunal was entitled to find that he had left voluntarily because of the package he had negotiated.

Court of appeal decision

The Court of Appeal said that the tribunal had misunderstood the law and had therefore come to the wrong conclusion.

It said that “it simply cannot be argued that he [Mr Sandhu] was negotiating freely. He had had no warning that the purpose of the 6 December meeting was to dismiss him; he had had no advice, and no time to reflect. In my judgment, he was doing his best on his own to salvage what he could from the inevitable fact that he was going to be dismissed. This, in my judgment, is the very antithesis of free, unpressurised negotiation.”

The Court said the tribunal had also come to the wrong factual conclusion, given the way the senior director of operations had opened the meeting by telling Mr Sandhu that he was being dismissed. Its conclusion that Mr Sandhu had resigned was, therefore, perverse and was not a decision that could have been reasonably reached in the circumstances.

It remitted the case to a different tribunal on the basis that Mr Sandhu had been dismissed and that it was procedurally unfair.