The Employment Appeal Tribunal (EAT) has held in Riley v Direct Line Insurance Group plc that an employment tribunal was entitled to reject an employee's unfair dismissal claim on the basis that there was a termination of his employment by mutual agreement rather than a dismissal by the employer.
R had autism spectrum disorder, anxiety and depression. He was employed by Direct Line Insurance Group (DLIG) as a home claims adviser from March 2012 and was enrolled on DLIG's private health insurance scheme provided by UNUM, which offered support until retirement age in the event of incapacity. From 2014 until October 2017 R was absent from work with anxiety and depression; for much of this period he was paid 80% of his normal salary under the UNUM scheme. Following an unsuccessful attempt to return to work he went off sick in May 2018. A meeting took place at which the option of his ceasing employment with DLIG and instead receiving payments under the UNUM scheme were discussed. He agreed in principle with this and confirmation was received that he would receive payments under the scheme until state pension age. A final meeting took place to end R's employment and he was informed by letter that he was dismissed with effect from 19 September 2018 on grounds of capability due to ill health.
R brought various claims, including for unfair dismissal and a failure to make reasonable adjustments. The tribunal dismissed his claims, finding that there was no "dismissal" with the meaning of the Employment Rights Act 1996 and that the termination of R's employment was consensually agreed on 19 September 2018. R appealed arguing that the tribunal had wrongly rejected the unfair dismissal claim.
The EAT rejected the appeal holding that the question to ask was "who really terminated the contract?" and that termination of the contract of employment by the freely given mutual consent of both employer and employee is not a "dismissal". As a result it had been open to the tribunal, on the evidence, to find that the termination of R's employment came about by free mutual consent. In particular, the tribunal found that R was not tricked or coerced in any way and that he participated in the discussions, was given time and fully understood what he was doing. The existence of a letter which said that R was "dismissed" did not undermine this conclusion as the termination was agreed consensually before the letter was written.
Take note: The decision in Riley shows the importance of properly documenting any termination of employment by mutual consent and ensuring that consent to termination is freely given. Provided that this is done an employee will not be able to rely on any subsequent letter referring to "dismissal" for the purposes of bringing an unfair dismissal claim; however, it would be advisable to carefully consider the language used in any written correspondence to ensure that it reflects the reality of the situation.
