Conditional resignations - what do they mean?

12/08/2010

By Nick Hobden, Partner and Head of Employment

The range of issues that can arise out of attempts to interpret the wording of letters of dismissal and resignation is always surprising. So the recent case of Heaven v Whitbread Group plc helps in casting some light on the effect of conditional resignations.

As is often the case, the matters in dispute came before an Employment Tribunal ('ET') in relation to the question of whether an unfair dismissal claim has been presented within time. In order for the ET to decide whether the claim form had been submitted within three months of the effective date of termination, it first had to work out when Mr Heaven's employment had ended. His employer, Whitbread, argued that his employment terminated on 29 August 2008. Mr Heaven sought to argue that his employment did not actually terminate until 3 September 2008. In cases such as these, a few days can make a lot of difference.

The facts

Mr Heaven wrote to his employer on 29 September 2009, heading up his letter "Conditional Resignation Letter". He proceeded to indicate that he tendered his resignation on the condition that he received:

(i) an assurance that he would be paid in lieu of notice and

(ii) a "glowing reference".

In response, Whitbread wrote to Mr Heaven on 31 August 2009 confirming that if he resigned, he would receive the payment that he was seeking. The employee replied by e-mail on 3 September confirming that he resigned. He then indicated that his resignation was effective from 29 August.

The decision

In reaching its decision on the matter, the Employment Appeal Tribunal ('EAT') was heavily influenced by the case of Fitzgerald v University of Kent at Canterbury. This 2004 case made it clear that it was not open to employer and employee to agree between themselves when the employee's employment terminated for the purposes of unfair dismissal rights. The effective date of termination of employment is a statutory concept and strictly governed by statutory rules.

In looking at the facts of this case, the EAT confirmed that it was not possible for a contract of employment to be terminated by an equivocal and conditional statement.  As a result, rather than constituting a resignation in itself, Mr Heaven's letter of 29 August 2009 simply set out the terms on which he would be prepared to resign. The contract of employment, therefore, only came to an end when he actually resigned on 3 September 2009. Although Mr Heaven purported to do so, he was not able 'backdate' his resignation at that stage, even if he wanted to.

Take care

Small differences in the termination date can have significant implications. It is often extremely important for employers to be able to identify precisely when an employee's employment came to an end. As a result, correctly interpreting the terms of resignation letters and carefully drafting dismissal letters is very important. If you need any help with these issues, please contact a member of the Employment team.