The Employment Appeal Tribunal (EAT) has held in Meaker v Cyxtera Technology UK Ltd that a letter to an employee that was headed "without prejudice", stated that his employment would terminate by mutual agreement and included a draft settlement 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 were going to be made about alternative employment, but this was not the case. On 5 February 2020 he was sent a letter by CTUK which was headed "without prejudice" and started by stating that it had been agreed that there would be a mutual termination of employment. It stated that his employment would terminate on 7 February 2020. On 7 February Mr Meaker wrote to CTUK Ltd rejecting the settlement offer. On 14 February payment of both the PILON and pay for untaken holiday was received in Mr Meaker's bank account. On 19 June Mr Meaker brought an unfair dismissal claim.
The employment tribunal decided at a preliminary hearing 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 and, although the contract provided for the possibility of a PILON, so such payment had been make at the time. He 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 EAT noted that the basic principle as to whether a document or communication amounts to a dismissal will 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 the 7 February 2020, which was not dependent or contingent on anything else happening.
Take note: Generally it will be a good idea 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 which were likely to be permanent, and the possible termination of his employment and a settlement had already been discussed with him.
