Withdrawing Dismissals – case authority

25th August 2010
Withdrawing Dismissals – case authority image

Withdrawing Dismissals – case authority

There are many instances of employers purporting to dismiss employees and then looking to withdraw or retract the dismissal. A recent case of Willoughby (W) –v- CF Capital Plc (CFC) provided some further legal guidance on this subject.

W was told by her manager that CFC was experiencing difficulties, and that one way to avoid redundancies was for staff to become self-employed on a retainer plus commission basis.  W expressed an interest in this option and requested more information.  After repeated requests for paperwork, W eventually received on 23rd December an agency agreement to effect the move to self-employed status. The agreement stated that her existing employment would end on 31st December.

W took legal advice and informed CFC that she declined the agency agreement.  On 5th January W’s manager rang her to say that there had been a misunderstanding and that if she did not want to become self-employed that she could continue in her employment.

W maintained that she had been dismissed and claimed wrongful and unfair dismissal.  CFC denied that there was a dismissal and claimed that W had resigned.

The Employment Tribunal (ET) found that the letter from CFC ‘without more’ amounted to a dismissal.  However the ET found ‘special circumstances’, as W’s manager had genuinely believed that W had agreed to become self-employed, and the dismissal was withdrawn as soon as practicable after W had alerted them to the mistake.  The ET held that W had resigned, having refused the explanation of the situation and offers to continue to employ her.  W appealed.

The Employment Appeal Tribunal (EAT) allowed her appeal!  They said the ET had failed to ask whether ‘in the special circumstances’, W was entitled to assume that the decision to dismiss her was a conscious, rational decision.  In other words, was there anything to indicate to W that the words of dismissal were not to be taken at face value?

The EAT noted that the main practical problem addressed by ‘special circumstances’ had been words spoken in the heat of the moment and then quickly retracted.

On the basis of the ET’s findings that the reference to termination in the letter was intentional, not an error, W was entitled to assume that this was a conscious rational decision and to consider that her employment had ended.  Further the EAT held the Tribunal was wrong to hold that the withdrawal of the dismissal was timeous.  For a clearly expressed dismissal to be retracted it must be done quickly, usually within a day or two.  In this case the period was much longer and the Christmas holiday period was no excuse.

Daven Naghen, head of our Employment Team commented as follows:-

“This ruling may have been harsh on the employer, but shows that the employer must take great care in these matters.  An employer is only likely to be able to retract a dismissal if it was say made in the heat of the moment and the retraction is made almost instantly within no more than a couple of days at most.  If an employer notifies an employee in writing of a dismissal it will have great difficulties in retracting the dismissal as a written letter could suggest that the employer has made a conscious and rational decision to dismiss.

Subsequently a dismissal which cannot be retracted may lead to a claim by the employee for wrongful dismissal and or unfair dismissal.”

If you need advice on this subject matter then please email daven.naghen@maplessolicitors.com or telephone Dav on 01775 722261.


How Banks are Cashing in on Wills image

How Banks are Cashing in on Wills

Recent headlines have reported how banks are now cashing in on Wills.

During the 1990s and early 2000s, banks offered customers low cost Wills (or sometimes even free Wills) but the small print allowed the bank to charge extortionate rates to act as Executors. It is reported that banks are expecting billions of pounds of revenue from their Will writing services and administering estates and in some cases their fees have been over £12,000 to administer an estate as they look to charge a fixed fee PLUS a percentage of the deceased’s wealth.

If you or a loved one has made a Will through a bank we would urge you to check who you have appointed as Executors and check any small print which you may have signed. If you are unsure then please speak with one of our lawyers in the Wills and Probate team who can look at your existing Will with you. It may be appropriate to make a new Will which revokes any previous Will you have made which could save your family thousands of pounds when your estate needs to be administered.

In the majority of cases, when someone has passed away we can provide the family with a quote of how much the legal fees will be so that there are no nasty surprises once the administration is complete.

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