When is the ‘effective date of termination’?

Identifying the correct effective date of termination is important, particularly when considering a claim for unfair dismissal. A claim must be presented to the Tribunal within three months of the effective date of termination, subject to any extension by ACAS early conciliation.

The effective date of termination will be one of these options:

1. If the employee is summarily dismissed, the date on which that termination takes effect i.e. the date the dismissal is communicated to the former employee
2. If either the employer or employee give notice to terminate the employment contract, the date on which the notice period expires
3. If the employee is employed under a fixed-term contract, and his or her employment terminates upon expiry of that term, the date on which the termination takes effect

But what happens if the employer summarily dismisses an employee, and subsequently gives notice? Does the effective date of termination move to the end of the notice period?

This was considered in the case of Cosmeceuticals Ltd v Parkin. In this case, the Employment Appeal Tribunal clarified that the effective date of termination will be the date the dismissal is communicated to the employee, even if the employer should have given notice but failed to do so.

Termination of employment

The claimant was a Managing Director of a company that manufactured and distributed cosmetic products.

The respondent had concerns about the claimant’s performance and, upon her return from a period of sabbatical leave, the Chairman informed her that she could not return to her job. This discussion took place on 1 September 2015.

Three days later, on 4 September 2015, the claimant was put on garden leave.

On 29 September 2015, she received confirmation in writing that the respondent had given notice to terminate her employment, which would end on 23 October 2015.

When was the effective date of termination?

When bringing the claim, both parties agreed that 23 October 2015 was the effective date of termination.

The Tribunal made a factual finding that there was an effective dismissal without notice on 1 September, and the respondent only subsequently sought to place the claimant on garden leave and give her notice.

The Tribunal made a finding that the effective date of termination was the day on which the claimant’s notice period ended, despite the fact there was an effective dismissal without notice on 1 September.

The Employment Appeal Tribunal overturned this decision, stating that the date of communication to the employee of their summary dismissal is the effective date of termination, even if the employer should have given notice in the circumstances, but failed to do so.

The effective date of termination in this matter was therefore 1 September and that was the relevant date for determining whether the claim was presented in time.

Claims in the Employment Tribunal

This is an interesting case as, the employee was summarily dismissed, and subsequently given notice that her employment would terminate and placed on garden leave.

Identifying an employee’s effective date of termination is important where an employee wishes to bring a claim for unfair dismissal in the Employment Tribunal, as the effective date of termination will be used to calculate whether the claim has been presented in time.

This time limit for bringing a claim will be extended if the parties participate in ACAS early conciliation.

Subject to the rules of the ACAS early conciliation, the Tribunal can also extend time for bringing a claim where it is satisfied that it was not reasonably practicable to bring the claim in time, as long as the claim was brought ‘within such further period as the Tribunal considers reasonable’. However, this is not a regular occurrence and the Tribunal can be quite strict with enforcing the time limits.

Practical tips for employers

In order to be certain of the date of dismissal, employers should arrange for dismissal to be communicated in a meeting, at which notes are taken.

This will negate any argument around the effective date of termination, which may arise when a letter of dismissal, sent to an employee’s home address by recorded delivery, and was either not received on the date of delivery but also if received but not read.

This is because, in the absence of evidence that an employee has deliberately not opened a letter summarily terminating their employment, the effective date of termination is the date on which the employee learns of their dismissal i.e. the date on which the employee reads the letter informing of dismissal, and not the date on which the letter was written or posted.