Appeal No. UKEATS/0039/11/BI

EMPLOYMENT APPEAL TRIBUNAL
52 MELVILLE STREET, EDINBURGH, EH3 7HF

	At the Tribunal
	On 17 April 2012

Before
THE HONOURABLE LADY SMITH
(SITTING ALONE)

(1) VASELLA LTD (IN ADMINISTRATIVE RECEIVERSHIP)
(2) CRERAR MANAGEMENT LTD	APPELLANTS

MS TRACEY EYRE	RESPONDENT

JUDGMENT

	APPEARANCES

For the Appellants	MR GORDON LINDHORST
(Advocate)
Instructed by:
Litigation Department
Mentor Employment Law Service
100 West George Street
Glasgow
G2 1PP	
For the Respondent	MR DOUGLAS ROSS
(Advocate)
Instructed by:
Allan McDougall & Co Solicitors
3 Coates Crescent
Edinburgh
EH3 7AL	

SUMMARY
JURISDICTIONAL POINTS – Claim in time and effective date of termination

Effective date of termination.  Date of letter in which Claimant intimated resignation “with immediate effect” held to be the EDT notwithstanding its delivery to the Respondents the previous day in circumstances in which she reasonably believed it would not be read until the date on her letter and, objectively, had no reason to believe otherwise.

THE HONOURABLE LADY SMITH 
Introduction
1.	This is an appeal against the judgment of an Employment Tribunal sitting at Glasgow, Employment Judge Muriel Robison, registered on 27 May 2011, finding that the Tribunal had jurisdiction to hear the Claimant’s complaint that she was unfairly dismissed.  The judgment followed a pre-hearing review to determine the issue of time bar.

2.	I will continue, for the sake of clarity, to refer to parties as Claimant and Respondents.

3.	The Respondents were represented by Mr Duffy, consultant, before the Tribunal and by Mr Lindhorst, advocate, before me.  The Claimant was represented by Mr Lawson, solicitor, before the Tribunal and by Mr Douglas Ross, advocate, before me.

Background
4.	The background facts were mostly not in dispute and can be shortly stated.  The Claimant was employed at the Swallow Hotel in Glasgow as operations manager.  The Swallow Hotel was part of the First Respondent’s business.  They went into administrative receivership in about November 2009 and entered into a contract with the Second Respondent whereby the latter would manage it and a number of other hotels which were part of the First Respondent’s business enterprise.

5.	As at November 2010, Mearns Pert was the General Manager of the Swallow Hotel.  He did not work on Sundays.  The Claimant knew that he did not do so.  On Sunday 21 November 2010, Hannah MacAskill was working as duty manager.  The Claimant called at the hotel at about 3pm and handed a sealed envelope addressed to Mearns Pert, to Hannah MacAskill.  She asked her to put it into Mearns Pert’s pigeonhole.  Hannah MacAskill told her that Mearns Pert was on leave and would not back at work until the Wednesday.  The Claimant accepted that, left the envelope (subject to her instructions to put it into Mr Pert’s pigeonhole) and left the hotel.

6.	In the envelope was the Claimant’s letter of resignation which was dated 22 November 2010 and included the following statement:

“I, Tracey Eyre (McMaster) wish to resign my position with immediate effect from Crerar Mgmt/Vassella Ltd at the Glasgow Swallow Hotel.”

7.	The letter then went on to explain her reasons for resigning.

8.	That evening – at 18.24 on Sunday 21 November – the Claimant emailed Tessa Budd, who was the executive PA and group admin manager for the Second Respondent and cut and pasted into the email the letter which she had delivered to the hotel.  Tessa Budd’s working week was Monday to Friday.  She did not work on Sundays.  The Tribunal made no finding which suggested that the Claimant had any belief that her working schedule was other than Monday to Friday.  Tessa Budd did, however, read the Claimant’s email that evening and forwarded it to Paddy Crerar of the Second Respondent and to its finance director.

9.	On 22 November 2010, at 16.40, Tessa Budd responded to the Claimant’s email attaching a letter to her, dated 22 November, in terms which included:

“Thank you for your resignation letter, sent by email, dated 21st November 2010, and I confirm that the company accepts your resignation with immediate effect.  Your final date of employment will therefore be Monday 22 November…..”

10.	The Claimant presented a form ET1, containing a complaint of unfair dismissal, to the Employment Tribunal on 21 February 2011.  Accordingly, depending on the view that is taken of the date of termination of her employment, her complaint was lodged either just within or just outwith the three month time limit for presenting such claims.

The Tribunal’s Judgment
11.	One aspect of the Tribunal’s finding in fact – which was not really material – was disputed.  In paragraph 23, the Employment Judge found that Hannah MacAskill had telephoned Mearns Pert on Sunday 21 November and he had asked her to read the Claimant’s letter to him.  However, the Employment Judge’s note of the evidence on that matter (provided in response to an order from this Tribunal) does not support that finding.  It is not clear as to whether or not Hannah MacAskill had herself advised Mr Pert of the contents of the letter and, moreover, the Employment Judge offers no note at all of when it was that Mearns Pert was phoned about the matter.  In short, the Employment Judge had no basis for making the findings that she made in paragraph 23.  The material facts were not, however, as above noted, disputed as between parties.

12.	Having considered the Respondents’ submissions which were to the effect that the effective date of resignation (“EDT”) was 21 November 2010 and the Claimant’s submissions that it was 22 November, the Tribunal found in favour of the Claimant and held that her claim for unfair dismissal was not time barred.

13.	The Tribunal noted the terms of section 97 of the Employment Rights Act 1996 and found that, on the facts, the date that the termination took effect was 22 November 2010.  That was because the Claimant’s letter of resignation was dated 22 November and clearly expressed the intention that that should be the date of resignation.  At paragraphs 57 and 58, the Employment Judge explains:

“57. In relation to the unfair dismissal claim, the Tribunal noted that the letter of resignation was dated 22 November 2010.  That letter made reference to the fact that the resignation was to have immediate effect.  The letter itself, notwithstanding the date which it was handed in or indeed e-mailed, being dated 22 November 2010, clearly expresses the intention that that should be the date of the resignation.  There is no ambiguity in the terms of the letter itself.  To interpret the letter otherwise, which is a stand alone document, in the form in which it was handed in to the hotel, would not make any sense.  Indeed, this was how it was initially interpreted by Tessa Budd in her letter acknowledging receipt of the letter of resignation.  In that letter, she makes reference to the date of the e-mail but confirms that the claimant’s final date of employment will therefore be Monday 22 November.
58. Given that under section 97 of the ERA the EDT means the date on which the termination takes effect, the Tribunal finds that in this case the termination took effect on Monday 22 November.”

Relevant Law
14.	In terms of section 95(1)(c) of the Employment Rights Act 1996, an employee is dismissed if he or she terminates their contract of employment with or without notice in circumstances where they are entitled to do so by reason of the employer’s conduct.  Resignation does not require to be in any particular form.  It is sufficient if the employee communicates to the employer, clearly and unequivocally, that he or she is treating the contract as being at an end.  Section 97 makes for provision for identifying the date that the contract is terminated – the effective date of termination (“EDT”):

“97	Effective date of termination
(1)	Subject to the following provisions of this section, in this Part, 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,
(b) in relation to an employee whose contract of employment is terminated without notice, means the date on which the termination takes effect…….”

15.	Parties were agreed that, in this case, section 97(1)(b) was the relevant provision.

16.	Section 97 was discussed by the Supreme Court in the case of Gisda Cyf v Barratt [2010] ICR 1475.   At paragraph 5, Lord Kerr of Tonaghmore said:

“5. The effective date of termination of employment is a term of art that has been used in successive enactments to signify the date on which an employee is to be taken as having been dismissed.  The fixing of the date of termination is important for a number of purposes.  These include, but are by no means confined to, the marking of the start of the period within which proceedings for unfair dismissal may be taken.”

17.	The facts in Gisda Cyf were that the employer’s letter of dismissal had lain unopened at the claimant’s home for a number of days while she was away on a visit and the court required to determine if it was relevant to consider whether or not the claimant had had a reasonable opportunity to find out what the letter contained prior to the date when she opened it.  The court found that the employment tribunal had not erred in considering whether or not the claimant had had a reasonable opportunity to find out what was in the letter (paragraph 29).  At paragraphs 34 and 35, having referred to Brown v Southall & Knight [1980] ICR 617 and McMaster v Manchester Airport [1998] IRLR 112, Lord Kerr said:

“34. Underlying both decisions (although not expressly articulated in either) is the notion that it would be unfair for time to begin to run against an employee in relation to his or her unfair dismissal complaint until the employee knows – or, at least, has a reasonable chance to find out – that he or she has been dismissed.  This is as it should be.  Dismissal from employment is a major event in anyone’s life.  Decisions that may have a profound effect on one’s future require to be made.  It is entirely reasonable that the time (already short) within which one should have the chance to make those decisions should not be further abbreviated by complications surrounding the receipt of the information that one has in fact been dismissed.
35.	These considerations provide the essential rationale for not following the conventional contract law route in the approach to an interpretation of section 97.  As Mummery LJ said, it is a statutory construct.  It is designed to hold the balance between employer and employee but it does not require – nor should it – that both sides be placed on an equal footing.  Employees as a class are in a more vulnerable position than employers.  Protection of employees’ rights has been the theme of legislation in this field for many years.  The need for the protection and safeguarding of employees’ rights provides the overarching backdrop to the proper construction of section 97.”

18.	The corollary to the above reasoning in a case where the EDT requires to be identified in a constructive dismissal case must, in my view, be that it would be unfair for time to run against an employee in relation to her unfair dismissal complaint from any date that is earlier than the date when she could reasonably expect her employer to find out that she was resigning.  Further, it must also be that it would be unfair for time to run against an employee in relation to her unfair dismissal complaint from any date that is earlier than the date which she clearly and unambiguously states is the date of her resignation.  These matters require, of course, to be tested objectively.  That approach accords with observations made by HHJ David Richardson in the case of Potter and others v RJ Temple Plc (in liquidation) UKEAT/0478/03/LA, where an employee’s solicitor had faxed his employers on a Friday evening, intimating his resignation “effective forthwith” and received a fax confirmation sheet at that time.  The fax had not, however, been read by anyone on behalf of the employer until some time the following week:

“40. If the effective date of termination is the date on which the fax was received in the Company’s office, a sensible result is achieved.  This is the date on which Mr Potter, having made his election, communicated it in the clearest terms.  As the Tribunal found, he intended to resign with effect from that date, and no longer considered himself bound from that date.  He had a fax confirmation sheet to tell him when his communication was received.
41. If receipt of the fax is insufficient to fix the date of termination, Mr Potter could not with certainty know what date it was.  It might have been as late as 16th September, when the office opened on Monday.  But if an authorised member of staff read it on the Friday, Saturday or Sunday, the date would be earlier.  It is certainly not out of the question for a senior member of management to be in the office late, or go in the office at the weekend.  So Mr Potter could not sensibly rely in any event on the date being later than 13 September.”

19.	In Horwood v Lincolnshire County Council UKEAT/0462/11/RN, Slade J held that where an employee had written a letter of resignation “with immediate effect” in clear and unambiguous terms and sent it to her employers by special delivery on 28 January 2010, the EDT was 29 January.  The letter was received and opened on 29 January by a member of staff although not read by the specific addressee until 1 February.  It was held that the EDT could not be a later date because once the employee’s unequivocal resignation had been received at the employer’s offices, opened and date stamped, communication was effective (see paragraph 49). There was no suggestion that the claimant in that case could reasonably have expected her letter to be effectively communicated to her employers later than the day after she had sent it by special delivery or to be read as intimating resignation other than on that day.  Equally, it was not suggested that the EDT was 28 January; allowance was evidently made for a period for delivery to elapse after posting before the claimant could be held to an EDT.

20.	I note that in Horwood, Slade J observed that the concerns expressed in the authorities (including Gisda Cyf) about protecting employees’ rights do not arise when the decision to leave is that of the employee (paragraph 42) but would respectfully differ.  The generality of the statutory purpose of protection of employee’s rights applies, in my view, just as much when determining the EDT in a constructive dismissal case. Fairness dictates that employees should not be held to an EDT which they could not reasonably have thought was the EDT, EDT being a term of art and a date to be ascertained on an objective view of all relevant facts and circumstances.

21.	Finally, some assistance is also provided by what was said by Sedley LJ in the case of Fitzgerald v University of Kent at Canterbury [2004] ICR 737 at paragraph 20:

“….the effective date of termination is a statutory construct which depends on what has happened between the parties over time and not on what they may agree to treat as having happened.”

22.	Three points arise from that observation.  First, the EDT is to be found by considering objectively what parties did and said over whatever, in an individual case, is the relevant period.  Secondly, parties cannot undo what has happened even by agreement.  Thirdly, as was recognised by Judge Hague QC sitting in this Tribunal in the case of Newman v Polytechnic of Wales Students Union [1995] IRLR 72 at page 74 (and relied on by HHJ Richardson in Potter) ascertaining the EDT is:

“…..essentially a matter of fact to be decided in a practical and commonsense way….”

The Appeal
Submissions for the Respondents
23.	Before me today, Mr Lindhorst submitted that the EDT was the date when the Claimant intimated her resignation to the Respondents; that was 21 November.  It would, he said, be an artificial construct to hold that where there was no agreement about a notice period to be worked, an employee could intimate termination on one day whilst still choosing a later date on which that termination was to come into effect.  The time limit was a statutory construct and neither employer or employee could contract out of it.

24.	He did not demur from the proposition that the employee’s own actings were relevant: Gisda Cyf at paragraph 29.  He stressed, however, that parties could not escape the statutory construct and referred to Fitzgerald in support of that submission.  He submitted that it was not what was in the Claimant’s head that mattered; it was a question of what she did.  Her letter was received on Sunday 21 November.  There was no discussion between parties at that time.  The letter of 22 November, accepting the Claimant’s resignation, was irrelevant.  It was not “significant” that the letter referred to a resignation date that was later than the date of delivery.  He did, however, accept – under reference to the case of Potter – that it was relevant to ask whether the employee’s communication was clear and what it was that was being communicated.  The nub remained, however, in his submission, that she could not give notification of resignation on 21 November whilst at the same time unilaterally saying that it was not to take effect until the following day.

25.	Mr Lindhorst referred to the case of Horwood and the authorities referred to within it.  Whilst recognising that they were not directly in point, he generally prayed them in aid of his submissions, particularly for the proposition that employers – or parties – cannot agree the EDT, its ascertainment being a matter of applying the statutory provisions.

Submissions for Claimant
26.	Mr Ross submitted that the appeal was ill founded.  The authorities demonstrated the following general principles: that the principles of the law of contract are of limited relevance when determining the EDT, that a practical and commonsense approach was to be adopted: Newman, that parties’ intentions were relevant: Potter at paragraphs 9 and 40, and construction of section 97 ought to be guided by the underlying purpose of the statute, which was protection of employee’s rights: Gysda.

27.	The Employment Judge had, he submitted, reached the correct conclusion in its succinctly expressed decision.  It was consistent with the above principles.  It was clear that both parties understood that the Claimant’s employment came to an end on 22 November 2010; that emanated from the date on her letter and the terms of the Respondent’s letter of 22 November.  This was not a case of an employer seeking to impose a different date; those letters simply demonstrated the parties’ mutual understanding of what the position always was.  Practical commonsense dictated that 22 November was the EDT.  Further, that was what the Claimant intended.  That was clear from what she had written and done.  Regarding 22 November as the EDT was consistent with the statutory purpose.  To approve an interpretation which allowed an employer to write to an employee stating expressly that her last date of employment was 22 November but to then maintain before the Employment Tribunal that the EDT was in fact a day earlier would not be consistent with the protection of an employees’ rights.

28.	Regarding the authorities referred to by Mr Lindhorst, Mr Ross submitted that none of them were on all fours with the present case; all of them concerned different circumstances.  Fitzgerald, however, showed that a sensible objective assessment was to be applied to the ascertainment of the EDT.  Potter emphasised the relevance of the employees’ intention.  Edwards, referred to in Horrocks, which dealt with the need to actually communicate the termination of the contract, did not assist.  Horwood was not in point.

29.	Finally, Mr Ross submitted that determining that the EDT was 22 November 2010 was a permissible option: Melon v Hector Powe [1980] SC 188.

Cross-Appeal
30.	The issues in the cross appeal arise only in the event that the appeal is not dismissed.

31.	First, Mr Ross submitted, as above noted, that there was no basis for the Employment Tribunal’s findings at paragraph 23.  I have already dealt with that matter.  He was, I consider, well founded in his criticisms but that finding is not material to the outcome of the case as a whole.

32.	Secondly, Mr Ross submitted that the Respondents were personally barred from contending that the EDT was 21 November since they had never stated that that was their position until after these proceedings were raised.  They had, conversely, stated to the Claimant that her employment ended on 22 November.

33.	Mr Ross referred to Rankine: Personal Bar p.6; Secretary of State for Employment v Globe Elastic Thread Co Ltd [1980] AC 506, and the Stair Memorial Encyclopedia 1601-1609.  The Respondents had represented to the Claimant that their position was that 22 November was the termination of the Claimant’s employment, it was in reliance on that belief that the Claimant had, through her solicitors, presented her application when she did, and it was self evident that was to her prejudice.  The Respondents were accordingly personally barred.  Insofar as it might be suggested that personal bar did not apply because this was a matter of statutory rights, that proceeded only on the wide, general comment in Rankine and was not supported by the Globe Elastic case.

34.	Mr Lindhorst submitted that personal bar could not apply because this was matter of statutory rights.  If the Respondents’ application of section 97 of the 1996 Act was correct then the jurisdiction of the Employment Tribunal was excluded by section 111.   Parties could not confer jurisdiction by agreement.

Discussion and Decision
35.	I cannot find fault with the reasoning of the Employment Judge and am persuaded that Mr Ross’ submissions on the EDT are well founded.  Even allowing for the letter having been delivered to the Swallow Hotel on 21 November, what it communicated was that the Claimant was intimating that she was resigning not that day but the following day.  The letter could not be read as communicating a contemporaneous resignation on 21 November or that the Claimant intended to do other than resign on 22 November.  Further, on the findings in fact, the Claimant had no reason to think that her resignation would be communicated to either Respondent earlier than Monday 22 November 2010. She left the hotel thinking that the message of her resignation would not be communicated to anyone from the Respondents on the Sunday.  Whilst she emailed it to Tessa Budd, there are no findings in fact to show that she had any reason to think that an employee who worked Monday to Friday would read and act on that email on the Sunday. That was what “happened between parties” to use the terminology of Sedley LJ in Fitzgerald and there was no basis for the Claimant sensibly to understand that her resignation date would be other than 22 November.

36.	Regarding the issue of personal bar, I do not, in these circumstances, require to determine it.  Had I had to do so, however, I can see that there may be an argument to the effect that personal bar applies where an employer has led an employee to believe that they accept that termination of employment occurred on one date and do not suggest otherwise until a date when it is too late for the employee to present a timeous claim if the employer’s revised assertion is correct – that is because the EDT is essentially a question of fact.  However, there would have been a problem for the Claimant because (a) the point was not argued before the Employment Tribunal and (b) there are no findings in fact to the effect that the employers’ representation that they accepted that termination occurred on 22 November was in fact relied on in the matter of presenting the ET1 when it was presented.

Disposal
37.	In these circumstances, I will pronounce an order dismissing the appeal.