Without prejudice letter contained effective dismissal

Without prejudice letter contained effective dismissal

The Employment Appeal Tribunal has supported a Tribunal’s finding that a Claimant’s employment was effectively terminated by a “Without Prejudice” letter containing a dismissal and erroneously referring to termination by “mutual agreement”.

In the matter of Meaker v Cyxtera Technology UK Ltd, the Employment Appeal Tribunal held that a“Without Prejudice” letter which included a draft settlement agreement and stated that the Claimant’s employment would terminate by mutual agreement was an effective letter of dismissal.

Mr Meaker was employed by CTUK Ltd in a heavy manual night role. He suffered back injuries and, following the second of these, was off work for an extended period. It was agreed that his inability to do heavy work was likely to be permanent. Conversations were held in which CTUK Ltd indicated that it was considering terminating Mr Meaker’s employment, and the possibility of entering into a Settlement Agreement was raised.

Mr Meaker believed that further enquiries would be made about alternative employment, but this was not the case. On 5 February 2020, he received a Without Prejudice letter containing a dismissal from CTUK Ltd stating that his employment would terminate by “mutual agreement” on 7 February 2020. Although Mr Meaker wrote to CTUK Ltd rejecting the settlement offer, he received PILON and pay for untaken holiday a week later. In response to this, Mr Meaker brought an unfair dismissal claim to the Employment Tribunal.

At a Preliminary Hearing, the Employment Tribunal decided that his claim was out of time. Mr Meaker appealed, arguing that the letter of 5 February was not an effective letter of dismissal as it was insufficiently clear and unambiguous. He argued that even if it was a termination letter, it was a purported termination in breach of contract as it did not give the notice required under his contract. Although the contract provided for the possibility of a PILON, no such payment was made at the time. Mr Meaker argued that it was only when the PILON notice was made on 14 February that there was a termination in compliance with his contract.

The Employment Appeal Tribunal noted that the basic principle as to whether a document or communication amounts to a dismissal would be a matter for objective determination by the Tribunal but must be construed in the context of the circumstances and matters known to the parties at the time. It dismissed Mr Meaker’s appeal, holding that the Tribunal had been entitled to conclude that, read as a whole and in the relevant circumstances, the letter was sufficiently clear that it was terminating Mr Meaker’s employment unilaterally.

Although the letter was headed “Without Prejudice”, the Tribunal was entitled to read it as having two distinct parts, one dealing with termination and the payments that would arise, and the other making a proposal for a further payment if Mr Meaker signed the settlement agreement. Although the reference to termination by mutual agreement was erroneous, the letter gave a clear date for the last day of employment, the amounts that Mr Meaker was entitled to, the date for payment, and the fact that his P45 would follow. This meant that the Tribunal was entitled to treat this as clearly communicating a termination on 7 February 2020, which was not dependent or contingent on anything else happening.

Generally, it is better to make open and without prejudice communications separately to avoid confusion. However, the fact that the employer had referred to termination “by mutual agreement” when this was not, strictly speaking, the case, was not enough to make the letter of termination invalid. On the facts, the letter did not come out of the blue, it had been established that Mr Meaker had injuries that were likely to be permanent, and the possible termination of his employment and a settlement had already been discussed with him.

If you also find yourself in a position where you need legal advice about the requirements associated with open and without-prejudice correspondence, our solicitors are available to assist.


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