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GISDA Cyf v Barratt 2010: When is a dismissal effective?
The decision in the case of GISDA Cyf v Barratt marks a further step towards furthering employee protection over achieving certainty for employers.
Why should we care?
As we know, assessing the exact date on which a dismissal is effective is important - not only as employers need to know when to pay departing employees until (or may otherwise face claims of unlawful deductions from wages) but also in order for both employers and employees to be able to calculate the deadline by which the employee must present any employment claims connected with their dismissal in the tribunal.
Dismissal not effective until the letter has been read….
In this decision the Supreme Court held that where a dismissal is communicated in writing rather than in person (as is so often the case), the dismissal is not effective until the employee has actually read the dismissal letter, or had a reasonable opportunity to read it. Therefore it is not safe to assume that if you post a dismissal letter, that the dismissal will be effective the next day.
The employer in this case argued that employers should be able to at some stage presume that such a letter had been read, and even if that was not found to be the right approach in all cases, it should apply at least where the employee was being dismissed for gross misconduct (and had therefore already breached the employment contract). The Court rejected both of these arguments, on the basis that the provisions of the legislation setting out how the effective date of termination should be assessed was part of a “charter protecting employee’s rights” and the law should be interpreted to promote employee rights rather than to curtail them. The Court gave weight to the possible (and in reality rare) scenario of an employee’s deadline to present claims expiring before they had read the letter terminating their employment. The Court refused to make a ruling that would eat into what it saw as an “already short” period of three months for the employee to assess whether to bring a claim against their employer, and to submit that claim if then they decide to do so.
Another factor – interim relief
Another factor in the Court’s decision was the potential impact on employees’ ability to obtain “interim relief”. In certain limited cases (such as whistleblowing claims) employees have a very short window of only 7 days to apply to the Employment Tribunal for what is known as “interim relief”. This means they ask the Tribunal to order the employer to continue to pay them for a period of time in order to assist their ability to fund the litigation and there is no requirement on the employee to repay this interim relief even if they lose their case – a galling thought for any employer, although reassuringly interim relief is rarely granted and only after a mini-hearing. The fact that adopting a narrower interpretation of the law in relation to the effective date of termination would potentially render the ability to claim interim relief impossible in certain cases seemed to be the deciding factor for the Court.
As to how to determine when an employee has had a reasonable opportunity to read a letter of dismissal? The Court ruled that in assessing this, consideration should primarily be to the reasonableness of the particular behaviour in question - and as the facts of this specific case make clear employees will not be expected to ask someone to read the letter to them where they are not at their home address.
How best to serve notice
This decision serves as a warning for employers in dismissing any employee, and particularly when there is a specific need to ensure that dismissal is effective on a certain date, for example to avoid payment of a bonus to a departing employee. In such cases the safest approach is to inform the employee in person and hand the written dismissal letter to the employee. Where this is not practical, the next best thing will be to send the letter by courier requesting a signature and, ideally to inform the employee by telephone of the contents of the letter.
Look at your contracts
In light of this decision it may also be prudent to review your precedent employment contracts to assess whether to include or amend provisions concerning deemed notice, for example to include a provision to state that notice is deemed to be effective a certain number of days after a letter has been dispatched. Whilst given the approach of the Courts in this judgment this is unlikely to be deemed to determine the effective date for statutory claims, it may serve to determine the effective date for contractual claims, for example for notice pay and other contractual benefits (which if raised in the employment tribunal are subject to a 3 month time limit, as compared with a time limit of 6 years if raised in the High Court).