Effective Date of Termination for Unfair Dismissal Claim

Cosmeceuticals Ltd v Parkin [2017] EAT 0049_17_2706 considered the effective date of termination (EDT) for unfair dismissal purposes where an employee was initially dismissed with immediate effect but subsequently given notice.

Ms Parkin was the Managing Director of Cosmeceuticals. Following her return to work from a sabbatical and due to concerns about her performance, Cosmeceuticals dismissed her on 1 September 2015 with immediate effect. Subsequently, after some discussion about alternative roles, she was given notice of termination to expire on 23 October 2015 and placed on garden leave. She brought a claim for unfair dismissal based on an EDT of 23 October 2015, which was agreed between the parties. The EDT triggers a three-month time limit within which to bring an unfair dismissal claim. The Employment Tribunal agreed that 23 October 2015 was the EDT and Ms Parkin’s unfair dismissal claim had been presented in time.

Cosmeceuticals appealed to the Employment Appeal Tribunal (EAT), arguing that Ms Parkin was dismissed on 1 September which was the EDT and that consequently her claim had been brought out of time. The EAT held that the EDT is a statutory concept and not a matter for the parties to agree upon. Where there has been an effective dismissal, it is not possible for an employer subsequently to give notice. Here, there had been an effective dismissal on 1 September 2015, which meant Ms Parkin had brought her claim out of time.

In order to avoid uncertainty as to the effective date of termination, employers should carefully consider whether to dismiss an employee on notice or with immediate effect and the legal and practical implications that this may have. They should also ensure that they follow a fair and well-documented process.