The law says that if a contract is terminated by notice, then the effective date of termination (EDT) is the date on which the notice expires but if no notice is given, then it is the date on which the termination takes effect. In Cosmeceuticals Ltd v Parkin, the Employment Appeal Tribunal (EAT) held that in a summary dismissal that is communicated to the claimant straight away, the effective date of termination is immediate.
Ms Parkin, the claimant, became the managing director of Cosmeceuticals Ltd, a cosmetics manufacturer and distributor in June 2009. Her employer, however, had concerns about her performance early on in her employment.
Matters came to a head in July 2015 when Ms Parkin was offered a two-month sabbatical to allow her to focus on family circumstances which were impacting on her performance. It was not made clear to her that the sabbatical could ultimately lead to her dismissal.
When she returned on 1 September, she was told that she could not return to her role as managing director. She was put on garden leave on 4 September and was then given notice of termination of employment, which was to end on 23 October 2015.
She lodged a claim of unfair dismissal, which was more than three months after 1 September but less than three months from 23 October.
The tribunal concluded that she had been dismissed on the grounds of capability, but that as the dismissal had been outside the range of reasonable responses, it was unfair. No proper attempts had been made to find a suitable alternative for her, nor was she given a right of appeal.
Although Ms Parkin and her former employer had agreed that the EDT was 23 October (likewise the tribunal), the EAT pointed out that as it was a statutory concept, it was not something that the parties could simply agree between themselves.
Instead, when an employer makes clear that they are withdrawing a contract of employment, it is the withdrawal that communicates the dismissal for the purposes of section 95(1)(a) of the Employment Right Act 1996, as per the reasoning in Hogg v Dover College and Alcan Extrusions v Yates and ors.
Although in Ms Parkin’s case a summary dismissal had not been communicated to her and notice had been given after the date on which she was informed that her contract was being terminated, there was no ambiguity that her “dismissal” was communicated to her on 1 September.
Even if her former employer had found a suitable alternative post that she could have taken up, 1 September would still have been the effective termination date. The fact that there was a small possibility that an alternative role could have been found during the notice period would not have rendered the effective date of dismissal invalid.
The finding that her dismissal was clearly communicated to her on 1 September meant that she had lodged her complaint of unfair dismissal out of time. The EAT therefore remitted the case to the tribunal to decide whether it had been reasonably practical for her to present her claim within time.
The focus and emphasis of the EAT’s decision is on the fact that the effective date of dismissal is a statutory concept which cannot be varied by agreement of the parties, regardless of their understanding of what could happen during the notice period.
Both claimants and employers therefore need to be extremely mindful of the fact that where there is a summary dismissal or the withdrawal of a contract of employment, time limits will run from the date on which the event is communicated to the employee.