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Employment Law Update - Notice Periods & Effective Date of Termination

Employees who wish to bring a claim for unfair dismissal, and certain other employment-related claims, must submit their claim to an employment tribunal within 3 months of the effective date of termination. This time period will be extended only in limited circumstances, so it is critical to understand when the 3 month period begins.

Where an employee’s employment is terminated with notice, the effective date of termination is the date on which the notice expires. The period of 3 months within which an employee must submit a claim to the employment tribunal includes the effective date of termination itself (e.g. if a period of notice expired on 9 May 2011, any claim for unfair dismissal must be submitted no later than 8 June 2011).

The Employment Appeal Tribunal has recently clarified what the effective date of termination is where the employment is terminated on notice. Dr Wang was given 3 months’ notice of dismissal by his employer, the University of Keele, by a letter that was emailed to and read by Dr Wang on 3 November 2008. Dr Wang, having sought legal advice and believing the effective date of termination to be 3 February 2009, submitted a claim to the employment tribunal on 2 May 2009, in the belief that this was the last day of the 3 month period for submission.

The University argued that, upon the ordinary construction of the letter, as notice of dismissal was given and received on 3 November 2008, the 3 month notice period expired on 2 February 2009 and therefore the last day Dr Wang could submit his claim was 1 May 2009, meaning he had lodged his claim out of time. The employment tribunal upheld this and so Dr Wang appealed.

The Employment Appeal Tribunal held that notice did not start to run until 4 November 2008. It also held that notice can only have immediate effect if the employee’s contract of employment provides it should do so. Therefore, Dr Wang’s notice did not expire until 3 February 2009 and so his claim had been submitted in time, and the employment tribunal had jurisdiction to hear it.

Employees should, wherever possible, submit tribunal claims well within the applicable limitation periods to avoid any possible complications with claims being brought in time, not only because of possible confusion over when the limitation period ends, but also in case there is an error in the claim form or, depending on how the claim is sought to be delivered, a postal delay or glitch with an email or fax.

Employers may wish to review the notice provisions in their contract of employments in light of this decision. They should also take note of this decision when deciding to dismiss with notice an employee who has less than a year’s continuous service (meaning they do not usually have unfair dismissal protection) to ensure that notice of dismissal is served early enough to prevent the effective date of termination being over 12 months from the date the employee commenced employment, leaving them at risk of a potential unfair dismissal claim. Employers should also note that, in the absence of a fundamental breach of contract, attempts to terminate a contract of employment on short notice will be unsuccessful, as the statutory minimum notice period will always be treated as added onto any continuous service.