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Resigned or dismissed? How the law sees it

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The laws on dismissal

When there is confusion as to whether an employee has resigned or been dismissed, how is it seen in the eyes of the law? Barrister Charles Price explains.

 


It is often not clear whether an employee has resigned or was dismissed, and it has been held in law that where an employee is told that they will be dismissed, if they do not resign, there is a dismissal.

The law is very clear on the difference between resignation and dismissal. Employees can only bring a claim for unfair dismissal under section 98 of ERA 1996 if they have been dismissed. A dismissal will occur if:

 

  • The employer terminates the employment, either summarily (that is, with immediate effect) or on notice.
  • The employee resigns (with or without notice) and can establish that they were constructively dismissed. This involves the employee showing that: There was a fundamental breach of contract by the employer; they resigned because of that breach; they did not delay too long before resigning, thereby affirming the contract.

A very common allegation made by employees is that their boss took them aside and surreptitiously warned them to resign or face dismissal. The first problem facing the claimant in this situation is proving it. Often in such situations, the tribunal may have to decide on a balance of probabilities of who is telling the truth – the unscrupulous boss or the employee.

 

"The tribunal may have to decide on a balance of probabilities of who is telling the truth – the unscrupulous boss or the employee."

A clever claimant will record their telephone calls when they communicate with their employers whilst in the throes of a dispute. In a recent case I attended, the canny employee gave evidence that upon being phoned by her boss she put on the speaker phone and her husband overheard the threat being made by the employer. He was then able to give evidence to that effect and the tribunal sided with them when making their judgment. More often than not, however, the tribunal will have to make their decision based on the claimant's word against that of the employer.

Proof that the threat was actually made is only one challenge the claimant must overcome; in the case of In Sheffield v Oxford Controls Ltd [1979] IRLR 133, the EAT identified the issue as one of causation. Where an employee resigns rather than be dismissed (having been told that, if they do not resign they will be dismissed) the cause of the resignation is the threat and therefore there is a dismissal.

However, where the cause of the resignation is not the threat but, say, the attractive terms that have been negotiated with the employer concerning the termination of his employment, there is a resignation. In such instances the tribunal will be looking for evidence of a reluctance on the part of the claimant to leave.

Further case law has stated:

 

  • Where an employee chooses to resign rather than face disciplinary proceedings, there is a resignation (Staffordshire County Council v Donovan [1981] IRLR 108).
  • Where the employee enters into a genuine severance agreement negotiated between the parties, there is a resignation (Crowley v Ashland (UK) Chemicals Ltd EAT 31/79).

 

For more information, please visit www.charlesprice.net

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