Kirklees Metropolitan Council v Radecki [2009] EWCA Civ 298

[2009] EWCA Civ 298Case No A2/2008/1260
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
His Honour Judge Serota QC
UKEAT/0114/08/DA
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 08/04/2009
Before
LORD JUSTICE RIXLORD JUSTICE TOULSONLORD JUSTICE RIMER
Between
KIRKLEES METROPOLITAN COUNCILAppellantROBERT JOHN RADECKIRespondent
(Transcript of the Handed Down Judgment ofWordWave International LimitedA Merrill Communications Company190 Fleet Street, London EC4A 2AGTel No: 020 7404 1400, Fax No: 020 7831 8838Official Shorthand Writers to the Court)
Mr James Cornwell (instructed by Mr J.H. Chapman, Kirklees Legal Services) for AppellantMr Paul Wilson (instructed by Jordans) for RespondentHearing Hearing date: 17 December 2008
JudgmentLord Justice Rimer :Introduction
[1]This is an appeal by Kirklees Metropolitan Council (“Kirklees”) against an order dated 9 May 2008 of the Employment Appeal Tribunal (His Honour Judge Serota QC, sitting alone) allowing an appeal against an order dated 23 May 2007 of the Leeds Employment Tribunal (Mr P. Hildebrand, also sitting alone). The issue before the employment tribunal was whether the claim of Kirklees’ former employee, Robert Radecki, for compensation for unfair dismissal had been presented within the time limit prescribed by section 111 of the Employment Rights Act 1996 (“ERA”). The employment tribunal held that it had not. The appeal tribunal held that it had.[2]So far as material, section 111(2) requires a claim for unfair dismissal to be presented to an employment tribunal:
“(a) before the end of the period of three months beginning with the effective date of termination, or (b) within such further period as the tribunal considers reasonable in a case where it is satisfied that it was not reasonably practicable for the complaint to be presented before the end of that period of three months.”
The effective date of termination (“EDT”) referred to in paragraph (a) is defined in section 97 of the ERA. So far as material, that provides:
“(1) Subject to the following provisions of this section, in this Part ‘the effective date of termination’ – (a) in relation to any employee whose contract of employment is terminated by notice, whether given by his employer or by the employee, means the date on which the notice expires, (b) in relation to an employee whose contract of employment is terminated without notice, means the date on which the termination takes effect, …” (a) in relation to any employee whose contract of employment is terminated by notice, whether given by his employer or by the employee, means the date on which the notice expires, (b) in relation to an employee whose contract of employment is terminated without notice, means the date on which the termination takes effect, …”
[3]The employment judge held that the EDT of Mr Radecki’s employment was 31 October 2006. His unfair dismissal claim was presented on 7 March 2007. That was over four months after the EDT. The judge found that it was reasonably practicable for the claim to have been presented within the three month period prescribed by section 111(2)(a). He therefore held that it was presented out of time and dismissed it.[4]On the premise that the judge was right as to the date of the EDT, the appeal tribunal refused to permit Mr Radecki to appeal on the ground that the judge ought to have found that it was not reasonably practicable for his claim to have been presented within the three month period. That matter is, therefore, no longer alive. The only ground on which the appeal tribunal did permit a challenge to the judge’s conclusion was that he had erred in law in finding the EDT to have been 31 October 2006. Mr Radecki succeeded on that ground: the appeal tribunal held that his employment contract continued until 5 March 2007 with the consequence that his complaint presented on 7 March 2007 was in time.[5]Kirklees, with Smith LJ’s permission, challenges that conclusion of the appeal tribunal and seeks to have the employment judge’s decision reinstated.

The facts

[6]I take these from the findings of the employment judge, expanded by reference to the documents. Mr Radecki was employed by Kirklees as a teacher at the Hartshead Moor School, Cleckheaton at the beginning of the 2005/2006 academic year. His employment was suspended on 21 October 2005 following the arising of concerns as to his skills and experience and his relationship difficulties with staff members but he still continued to be paid his full salary. Disciplinary allegations against him were investigated but have never been adjudicated upon. Disciplinary hearings fixed for 25 April and 13 June 2006 were postponed. The reason for the second postponement was because by June both sides had embarked on discussions of proposals for a settlement of their differences. Mr Radecki was represented in them by his union, the National Association of Schoolmasters/ Union of Women Teachers (“NASUWT”). The settlement proposals contemplated a compromise agreement providing for (inter alia) the giving of a reference for Mr Radecki, a payment to him in lieu of notice (“PILON”) and an agreed termination date of 31 August.[7]Mr Radecki’s union representative was Christine Rinder. She sent him a draft reference and draft compromise agreement on 14 August. The latter was expressed to be “without prejudice & subject to contract”. The time-honoured effect of the latter half of that legend was that(i) neither side was to be regarded as contractually committed to any of the terms the subject of the negotiations,(ii) each side was at liberty at any stage to withdraw from the negotiations, and(iii) each would be contractually committed to the other only if and when they signed a formal compromise agreement, their commitment being on the terms of that signed agreement. Mr Radecki responded on 24 August with comments on the documents. Negotiations continued.[8]On 13 October Ms Rinder emailed Mr Radecki the then version of the draft compromise agreement. It now provided for a termination date of 31 October and two months PILON. Shortly afterwards she emailed him again, explaining that she had just spoken to Joanne Burnand (Kirklees’ human resources manager) who had confirmed he would receive his pay for October as usual. Ms Rinder said:
“We are therefore looking at a termination date now of 31 October. This takes some of the pressure off both sides to arrive at an acceptable compromise on both the Agreement & the reference.”
Ms Rinder then sent an email to Ms Burnand in confirmation of their earlier conversation. She said Mr Radecki was still not happy with aspects of the compromise agreement and reference. She asked her to arrange for his salary to be paid as usual in October and expressed the hope that “this will allow us the opportunity to finalise matters very shortly.” An internal Kirklees email of 16 October confirmed that Mr Radecki would be paid for October, adding that “[t]he deadline for November payroll is Tuesday 7 November so if he wanted terminating wef 31 October we would need to do it by this date.”[9]On 16 October Ms Rinder wrote to Mr Radecki saying that she knew he was unhappy about both the draft agreement and reference but that they had reached the stage at which he had to decide whether(i) to accept the agreement; or(ii) reject it and await the outcome of a disciplinary hearing likely to be fixed for early November. She added:
“Without agreeing to a Compromise Agreement you receive the right to claim unfair dismissal at an Employment Tribunal but I cannot state at this time whether you would have a viable claim. Even if you have, the Tribunal will take into account the fact that you have been paid for several months longer than would have happened if you had not sought a mutual termination.”
[10]Mr Radecki’s response on 23 October was that he was willing to give full consideration to a compromise agreement but, as he had said before, he wanted advice from a solicitor; and, as Kirklees was still considering his own proposed amendments, he saw no reason to accept the draft agreement and reference in their current form.[11]Ms Rinder emailed Ms Burnand on 24 October proposing amendments to the reference. As for the compromise agreement, she asked for confirmation(i) of the amount now being offered by Kirklees “based on a termination date of 31 October”; and(ii) that, in line with its policy on compromise agreements, Kirklees did not agree to the removal of clause 6.1. She said that “if the reference & the above points can be confirmed, I will inform Mr Radecki that we have reached the end of negotiations.” The following morning, 25 October, she emailed Mr Radecki again. The essence of her message was that (i) she had insufficient knowledge of the facts to be able to advise him whether, were he to be dismissed, he would have a viable claim to an employment tribunal; (ii) Ms Burnand had told her that she would be coming back to her on the points Ms Rinder had raised in her email of the day before; and(iii) Kirklees could withdraw its offer at any time and there was a strong possibility that it might. Ms Rinder said that, before referring the papers to a solicitor for advice, she would send Mr Radecki:
“… the final version of the Agreement & reference as negotiated & an acceptance slip to sign. The solicitors can advise you on the terms of the Agreement but they cannot renegotiate. I will contact you again when I have something in writing from [Ms Burnand].”
[12]On 31 October Ms Burnand sent an email to Ms Rinder in response to her email of 24 October, by which she made a concession in relation to the form of the proposed reference but did not respond expressly to the point about clause 6.1 of the draft agreement. She concluded by saying that “I hope we are able to agree this in relation to the reference, [if] this is OK I will amend the version attached to the agreement and re-send that to you.” On 1 November Ms Burnand emailed Ms Rinder the revised draft agreement incorporating what she said were the amendments previously agreed and attaching the form of reference as Schedule 2. She added:
“Just to let you know that payroll deadline for November pay is 7th November, so I will be instructing payroll then to terminate Mr Radecki on the payroll, so if there are any further queries could we discuss them before then?”
The revised draft agreement (still stated to be “without prejudice & subject to contract”) recited that Mr Radecki’s employment with Kirklees and the School’s Governing Body “will terminate by mutual consent on 31 October 2006 (‘the Termination Date’)”; and that terms of settlement of all his claims had been agreed. Clause 1.1 provided that he was to be entitled to his salary and benefits up to the termination date; and the draft agreement provided for PILON equating to his salary for November and December.[13]That form of agreement was not one whose terms Mr Radecki had agreed to and of course as at 1 November no formal agreement containing such terms had been signed by either side. At 3.10 pm on the same day Mr Radecki emailed Ms Rinder a response to her email of 25 October. He asked a question about the latest draft of the compromise agreement he had seen. He asked who was requiring him to decide whether to accept or reject the compromise agreement, why any solicitor to whom he was referred could not re-negotiate it and what the “acceptance slip” was that Ms Rinder had referred to. She emailed him at 4.00 pm (without referring to his own email) attaching what she said was the final version of the reference and explaining that no further amendments to it would be agreed. She said the form of compromise agreement that Ms Burnand had sent her earlier that day omitted certain amendments that had been earlier agreed and that she would return it to Ms Burnand (as she did) so that a correct version could be produced.[14]On 6 November Ms Burnand sent Ms Rinder a revised form of compromise agreement reflecting all the agreed amendments and Ms Rinder emailed it to Mr Radecki. She said she would send him a hard copy in the post together with an acceptance slip and answers to his questions. She said that “Negotiations are now at an end.” The amount of the compensation payment that the draft agreement offered was £6,248. On the same day she wrote two letters to Mr Radecki, enclosing hard copies of the final versions of the compromise agreement and reference. One letter was a two-page letter of advice. Ms Rinder said in it that, not having heard from Mr Radekci since sending him the reference on 1 November, she presumed he had accepted the reference. As for the draft compromise agreement, she said:
“There is no further negotiation possible. If you agree to the terms, please return the signed acceptance slip to me as soon as possible. [Kirklees] are not expecting to pay you through payroll in November so the sooner I get your acceptance slip back the sooner I can refer the papers to the solicitors. The NASUWT will only instruct solicitors concerning the Compromise Agreement following your acceptance of the Agreement as finally proposed by the employer. Thompsons solicitors are instructed to provide you with advice in respect of the terms and effects thereof.”
[15]The letter explained that, by signing the compromise agreement, Mr Radecki would give up his legal rights to pursue a claim against Kirklees at an employment tribunal; and that, although he had been suspended within two months of starting his employment contract, he had remained on full pay and in employment for more than 12 months and would now be entitled to make a claim for unfair dismissal to an employment tribunal. Ms Rinder said that Kirklees could resume the disciplinary process if he decided not to accept the compromise agreement. She gave some downbeat advice about the prospects of achieving material success in an unfair dismissal claim and indicated that the union would be unlikely to support such a claim.[16]Ms Rinder’s other letter to Mr Radecki was described in the first letter as the standard covering letter. It said:
“With your agreement, the Compromise Agreement will be forwarded to a Solicitor instructed by the NASUWT to advise you on the terms and effects of the Compromise Agreement. Save in exceptional circumstances, the Solicitor does not have instructions to enter into negotiations with your employer or to request any further changes to the Agreement. If the Solicitor considers the terms of the settlement to be unfavourable, the Solicitor will advise you in this respect and liaise further with the union at that stage.”
It asked Mr Radecki, as a condition of referring the papers to a solicitor, to confirm that he was satisfied with the proposed compromise agreement and the reference; and that he agreed to the reference of the matter to a solicitor.[17]On 7 November Ms Burnand told Kirklees’ payroll department that, as the employment

judge put it:

“… she had finalised details with the union representative that they needed to end the employment of [Mr Radecki] on Payroll as of 31 October and arrange to make payment of the payment in lieu due to [him].”
She added that his union representative was still discussing the compromise agreement with his solicitor and, until he had signed it, Kirklees could not release the pay in lieu. Ms Burnand’s evidence (which I read the employment judge as accepting) was that Ms Rinder had confirmed that Mr Radecki had agreed the terms of settlement “and that the agreement would be forwarded to the union’s Solicitors in order that the requirements of the legislation regarding Compromise Agreements could be complied with.” That was a reference to section 203 of the ERA.[18]Mr Radecki asked further questions of Ms Rinder by email on 8 November. On 10 November he signed the acceptance slip. It read:
“I, Robert Radecki, … confirm that I understand the meaning of Christine Rinder’s letter dated 6 November 2006. I am content with the terms of the proposed Compromise Agreement and reference enclosed with that letter, and give my permission for the case papers to be referred onwards to the union Solicitor. I understand that the union Solicitors will contact me directly to advise me, as required by Section 203 of the [ERA].”
Underneath that he wrote:
“Dear Christine I am content that the agreement, reference and the papers in my case be referred to Solicitors immediately. I hope that we may thereafter reach a swift conclusion to this matter on the basis that the agreement in all its parts is found to be satisfactory. I look forward to hearing from the Solicitors.”
[19]There was then a pause during which Ms Burnand heard nothing more from the union. She contacted Ms Rinder on about 8 December to be told that Mr Radecki had not yet seen the solicitors, although the union had sent an instruction letter to Thompsons (with a copy to Mr Radecki) on 14 November. As a result of administrative delays, Mr Radecki did not see Thompsons until December. His evidence was that it was clear to Thompsons that he was still suspended on full pay and had not been dismissed. Their advice was that he could(i) sign and accept the compromise agreement; or(ii) decline to sign or accept it; or(iii) go back to his union for advice.[20]Also in December, the School was closed. Kirklees did not notify Mr Radecki that he had been transferred to another one. In January 2007 Mr Radecki went back to his union, expressing dissatisfaction with Ms Rinder’s representation. The union considered his case during January and February and withdrew their representation of him. Ms Rinder’s explained that in her letter to Kirklees of 23 February 2007:
“I regret to inform you that Mr Radecki has refused to accept the terms of the proposed Compromise Agreement. The NASUWT has informed him that we cannot provide any further casework support for him. ... I will be grateful if you would convey this information to the School. The Agreement was negotiated in good faith by the NASUWT.”
[21]Mr Radecki’s evidence was that he had decided to reject the proposed compromise agreement and had so informed Kirklees by a telephone call on 22 February and an email to Ms Burnand. His evidence was that he also rang Geraldine Yehya of Kirklees’ Payroll Section, as is supported by Ms Yehya’s email of 26 February to Ms Burnand in which she said that Mr Radecki had:
“… phoned me this morning asking when he can expect payment of salary due to him! I explained that I understood we were waiting for some information from his solicitor before the monies owed could be released. He said that you will not be getting anything from his solicitor and therefore he is due salary for a number of months! He also asked me to confirm what his place of employment was – I said that I was unable to confirm this. He said that he had tried to contact you before ringing me. Can you advise me re this?”
[22]Mr Radecki wrote to Ms Burnand on 26 February saying he had contacted Ms Yehya asking for the payment of his outstanding salary. He said he had declined to accept the compromise agreement, that NASUWT were no longer representing him and that he was now representing himself. He asked for payment of his outstanding salary within seven days.[23]Ms Burnand wrote to Mr Radecki on 5 March 2007. He received her letter on the following day. She wrote to confirm the current position. She referred to his suspension on 21 October 2005, to the adjourned disciplinary proceedings and to the negotiations for the termination of his employment by a compromise agreement. She said the final date for his employment had been “agreed with your representative and yourself as 31 October 2006 on the understanding that the agreement would be signed shortly.” She said he had not indicated that he would not sign it. She continued:
“You were terminated on the payroll system and your employment ended on that date [31 October 2006] and this was mutually agreed. Your trade union representative stated that you had signed documentation to confirm that you would sign the compromise agreement when this was forwarded to a solicitor for completion. The School and the Local Authority have been led to believe that you are in agreement with the compromise agreement and that your employment ended mutually on 31 October 2006.”
[24]She concluded by saying that his employment had ended on 31 October 2006, any salary owed to him up to then had been paid into his account and no money was outstanding as due to him. Kirklees sent him a P45 at about this time, which gave 31 October 2006 as the leaving date. Ms Burnand contended in her evidence that that document was a duplicate of one that should have been sent when he was removed from the payroll at the end of October 2006, although there was no evidence that one had been so sent. Mr Radecki’s response on 6 March to Ms Burnand’s letter was to assert that he had never agreed to the termination of his employment and nor had he authorised or instructed anyone to do so for him. The first he had heard of the termination of his employment was Ms Burnand’s letter. He presented his unfair dismissal complaint to the employment tribunal on 7 March.[25]In his witness statement, Mr Radecki claimed to have been unaware that he had not received any salary for November 2006 to February 2007. His explanation was that his wife handled his accounts, they had various bank accounts and the “base line balance” did not alter significantly over this period. He was cross-examined about his alleged unawareness that Kirklees had stopped paying him his salary at the end of October 2006. In paragraph 26 of his judgment, the employment judge found that Mr Radecki was aware that the payment of his salary had then ceased. This is what he said:
“In relation to this aspect, my conclusion is that I did not accept that [Mr Radecki] was unaware that payment had ceased to him at the end of October 2006. His union representative, with whom he was in very close contact, was expressly informed of this change to his payroll status. It was in accordance with the terms of the agreement which he had indicated in writing that he accepted. I found it instructive that [Mr Radecki] had not approached [Kirklees] to state that he had only become aware of the non-payment of salary on 26 February. His approach was to ask for the salary owed to him. It was therefore my conclusion that [Mr Radecki] was aware of the non-payment of salary from the November payroll.”
[26]We were told that Kirklees’ practice was to pay salary in the middle of the month. In paragraph 12 of his judgment for the appeal tribunal, Judge Serota recorded an apparent acceptance by Mr Wilson (counsel for Mr Radecki) that Ms Rinder promptly passed on to Mr Radecki Ms Burnand’s information to her on 1 November that she was going to give instructions for him to be taken off the payroll for November; and the employment judge’s finding was that (contrary to his evidence) Mr Radecki did know that his salary was stopped after October. Although there is no finding as to precisely when he learnt that the November salary had not been paid, the inference is that it would have been at about the middle of November.

The decision of the employment judge

[27]Against that background, the employment judge recorded that both sides were agreed(i) that Mr Radecki’s employment had come to an end; and(ii) that it had not been terminated by the giving of notice. The critical question was whether, as Kirklees claimed, the employment terminated on 31 October 2006, in which case Mr Radecki’s claim was out of time; or whether, as Mr Radecki claimed, it was only terminated on 6 March 2007, when he received Ms Burnand’s letter of the previous day. That, he said, was (i) the first he knew of the claim that his employment had been terminated; and (ii) that it could not have been terminated earlier than the date he learnt of it.[28]The employment judge’s conclusion and finding, in paragraph 40 of his judgment, was that Mr Radecki’s employment terminated “by mutual consent” on 31 October 2006. His reasoning was set out in these paragraphs: “37. On [Kirklees’] side, reliance is placed on the terms of the Compromise Agreement negotiated, reciting as it does that the employment ‘will terminate by mutual consent on 31 October 2006’. [Ms Burnand’s] e-mail of 1 November indicated to [Ms Rinder] that she, [Ms Burnand], would be instructing Payroll to terminate Mr Radecki’s payroll before the November pay deadline of the 7th. [Kirklees] also relies on an e-mail of 6 November from [Ms Rinder] to him forwarding the Compromise Agreement with the standard letter and acceptance slip. Particular reliance is also placed on the terms of the acceptance slip signed by [Mr Radecki] and dated 10 November 2006, indicating that he was content with the terms of the proposed Compromise Agreement. It is clear from the period running up to the removal of [Mr Radecki] from the payroll that this was a matter of concern to [Kirklees] shortly after the September payroll.38. An interesting insight into [Mr Radecki’s] approach is in his letter to [Ms Rinder] of 23 October, in which he states: ‘At this time I have no problem in accepting that I am and shall continue to be willing to give full consideration to a Compromise Agreement between myself and [Kirklees] over this matter. I am appreciative of your efforts in continuing to make amendments to the draft agreement/reference, and am fully satisfied that [Kirklees] should continue to believe that I wish to seek an agreement and that nothing which follows runs contrary to that.’39. When one looks at the dealings between the parties in this case, it is clear that the correct interpretation of events lies in the case put forward by [Kirklees]. [Mr Radecki], through his union representative, held himself out as agreeing to a compromise whereby his employment was to end on 31 October 2006. The union instructed Solicitors to advise him on a Compromise Agreement in those terms, and [Kirklees], in reliance on the union’s actions and after informing the union, terminated [Mr Radecki’s] pay. [Mr Radecki’s] case that he was unaware of this fact at the time is contrary to common sense and the circumstances of the case. It also runs contrary to the date of termination of employment which [Mr Radecki] gave in his claim to the tribunal [31 October 2006]. The correct factual analysis appears to be that [Mr Radecki] was aware that his employment had been brought to an end on 31 October 2006. Payment by [Kirklees] had ceased, and [Mr Radecki’s] approach to [Kirklees] in February 2007 was not that of a man surprised to have discovered that he had not been paid for some three months, but rather that of someone who had changed his position in relation to an agreement entered into and wished in response to be paid for a salary which he knew he had not been paid for in the intervening period.40. [Mr Radecki’s] contention is that, since the Compromise Agreement was without prejudice and subject to contract, it is of no effect until it is signed in accordance with statute, on the basis of advice received from a qualified advisor. However, the factual basis on which the Compromise Agreement took effect was that [Mr Radecki] agreed to consensual termination of his employment on 31 October 2006. In response to that agreement, [Kirklees] terminated payment to [Mr Radecki]. Accordingly, [Mr Radecki’s] employment came to an end by mutual consent on 31 October.” ‘At this time I have no problem in accepting that I am and shall continue to be willing to give full consideration to a Compromise Agreement between myself and [Kirklees] over this matter. I am appreciative of your efforts in continuing to make amendments to the draft agreement/reference, and am fully satisfied that [Kirklees] should continue to believe that I wish to seek an agreement and that nothing which follows runs contrary to that.’[29]The result was that the employment judge held that Mr Radecki’s complaint of unfair dismissal was presented outside the three-month time limit and he dismissed the claim.

The decision of the appeal tribunal

[30]Judge Serota held that the employment judge had been wrong to find that Mr Radecki and Kirklees had agreed that the employment was to terminate on 31 October 2006. Whilst the draft compromise agreement referred to that as the termination date, it was expressly “subject to contract” and no formal agreement was ever executed. Therefore it provided no basis for the judge’s finding of an agreement as to the termination date, nor was there any basis for a conclusion that there was a separate freestanding agreement to that effect.[31]Kirklees sought before Judge Serota to maintain the employment judge’s conclusion on the alternative ground that, if there was no consensual termination of Mr Radecki’s employment on 31 October 2006, Kirklees had nonetheless evinced a clear intention to terminate his employment as from that date. It took him off the payroll in November 2006, communicated that decision to Ms Rinder, did not pay him after 31 October 2006 (as, so the employment judge found, he knew) and did not require him to attend work nor attend a disciplinary hearing. In addition, the school at which he had worked so briefly in the autumn of 2005 was closed in December 2006 and Kirklees did not deploy him elsewhere. There was therefore nothing left in the employment relationship as at 1 November 2006. The dismissal may have amounted to a repudiatory breach of contract, but it was nonetheless an effective termination of his employment.[32]Judge Serota declined to accept that argument. His reason was that the matters relied upon were all explicable in the context of either(i) the continued negotiations, or(ii) the expectation that a compromise in the terms of the draft compromise agreement would be effected. These matters included the fact that Mr Radecki was not being paid, of which he was aware. He was not required to attend work because he was on suspension. He was not called to a disciplinary hearing because a settlement was expected to be achieved. There was, in Judge Serota’s view, nothing in the evidence that could have led the employment judge to find, had he been so minded, that what took place on 1 November 2006 was tantamount to a dismissal or termination, whether wrongful or otherwise. There was no sufficiently unequivocal statement by Kirklees that could have been regarded as terminating the employment until its letter of 5 March 2007. If, however, he was wrong on his conclusions as to the effect of what happened at the end of the October 2006, Judge Serota said that the EDT would have been when Mr Radecki realised, or should have realised, that his employment had been terminated, and that would have been soon after 31 October 2006.

The appeal to this court

[33]The whole of the employment judge’s reasoning in paragraphs 37 to 40 of his judgment was, I consider, seriously flawed. The draft compromise agreement was stated to be “subject to contract”, the meaning of which I have described and which applies as much in an employment law context as in others. Since the draft agreement never matured into a formal agreement executed by both parties, all the terms in it from time to time were things writ in non-contractual water, signifying nothing. That includes the recital that the employment would terminate on 31 October 2006. The employment judge’s reliance on this as reflecting a consensual agreement as to that being the termination date was wrong. So too (to the extent that he may have relied upon it) was Mr Radecki’s signature of the “acceptance slip”, which also did not constitute any binding acceptance of the terms of the draft agreement (it still remained for him to receive the necessary advice on it -- section 203 of the ERA – and formally to execute it). Moreover Ms Burnand’s evidence was that, as at the beginning of November 2006, she knew that finality on the proposed compromise agreement could only be achieved after he had received advice from solicitors, pending which the PILON (measured by reference to his November and December salary) could not be paid. The judge’s conclusions in the second and third sentences of paragraph 40 were wrong. Mr Radecki’s contention, summarised in the first sentence, was right. Judge Serota took the like view about the employment judge’s reasoning and was correct to do so. No attempt has been made before us to support such reasoning.[34]It is unfortunate that the critical paragraphs of the employment judge’s conclusions were so tainted with error because the consequence was to obscure whether it was also any part of his reasoning to accept what Mr Cornwell, who appeared for Kirklees both before the appeal tribunal and this court, told us had been Kirklees’ primary submission. That was not that there was a consensual termination on 31 October 2006, but that as from about 1 November 2006 Kirklees severed the fundamental basis of the employment relationship by ceasing to pay any further salary to Mr Radecki. That, it was said, effected a termination of his employment, albeit by conduct amounting to a repudiation of his contract; and it terminated it with effect from about 1 November 2006. The appeal to us was founded on the basis that:(i) the undisputed evidence before the employment judge showed that there was such a repudiation on about 1 November 2006;(ii) that the employment was thereby terminated, with the EDT being about 1 November 2006 (the precise date does not matter because the claim was presented well after the three month time limit);(iii) the employment judge found as a fact that it was so terminated, which foreclosed Judge Serota’s different finding that it was not; and(iv) even if the employment judge did not so find, the facts speak for themselves and provide an alternative basis for re-instating his conclusion that Mr Radecki’s claim was presented out of time.[35]I accept that Kirklees clearly did advance this case before the employment judge.

The judge recorded at paragraph 30:

“[Kirklees’] submission is that from 31 October the fundamental basis of the contract was at an end: [Kirklees] was no longer paying [Mr Radecki]; [he] was not required to attend work; [he] was not required to attend a Disciplinary Hearing; and even though the School closed, [his] place of work was not transferred to another School.”
In paragraphs 31 to 33 he also recorded the further submission that it mattered not that that conduct amounted to a repudiation of the employment contract. It still operated to terminate the employment, whether or not the repudiation was accepted. That was said to be supported by Dedman v. British Building & Engineering Appliances Ltd [1974] ICR 53; Robert Cort & Son Ltd v. Charman [1981] ICR 816; and Lambert v. Croydon College [1999] IRLR 246, to which the judge was referred.[36]Unfortunately, however, the employment judge did not deal expressly with that submission when expressing his reasoned conclusion. I propose to deal with Kirklees’ appeal by considering:(i) the factual and legal basis of the submission;(ii) whether the employment judge made any findings of fact relating to it; and(iii) whether, if he did not, his decision can be upheld on the ground that the submission was unanswerably well founded in fact and law and that Judge Serota was in error in taking the different view he did.[37]Mr Cornwell referred us to Dedman’s case, a decision of the Court of Appeal; and Cort’s case, a decision of the Employment Appeal Tribunal (Browne-Wilkinson J presiding). The latter case applied the former and both are authority for the proposition that where an employee is dismissed summarily, the EDT of his employment for the purposes of what is now section 111 of the ERA is the date of the summary dismissal; and it makes no difference that the dismissal might have amounted to a repudiatory breach of the employment contract such that the employee might be entitled to bring a claim for damages in respect of such dismissal. It is worth quoting part of Browne-Wilkinson J’s judgment in the Cort case, at [1981] ICR, 816, 821: “(3) …We therefore consider it to be a legitimate use of words to say, in the context of [what is now section 111], that the termination of the contract of employment ‘takes effect’ at the date of dismissal, since on that date the employee’s rights under the contract are transformed from the right to be employed into a right to damages. This view receives support from the remarks of Winn LJ in Marriott v. Oxford and District Co-operative Society Ltd (No. 2) [1970] 1 QB 186, 193. After pointing out that the statutory definition of ‘the relevant date’ for redundancy payment purposes … is the date of the expiry of the notice or (if there is no notice) the date on which the termination takes effect, Winn LJ said: ‘That is consistent with the whole concept that a contract of employment for the purposes of this statute is brought to an end, i.e., it is terminated, when it is so broken that no further full performance of its terms will occur.’ (the appeal tribunal’s emphasis) This indicates that the date of final termination of the contract is not necessarily ‘the effective date of termination’ or ‘the relevant date’: if, as in the case of repudiation, further full performance becomes impossible, that will be the relevant date. (4) We consider it a matter of the greatest importance that there should be no doubt or uncertainty as to the date which is the ‘effective date of termination.’ An employee’s rights either to complain of unfair dismissal or to claim redundancy are dependent upon his taking proceedings within three months of the effective date of termination (or in the case of redundancy payments ‘the relevant date’). These time limits are rigorously enforced. If the identification of the effective date of termination depends upon the legal subtleties of the law of repudiation and acceptance of repudiation, the ordinary employee will be unable to understand the position. The Dedman rule fixed the effective date of termination at what most employees would understand to be the date of termination, i.e. the date on which he ceases to attend his place of employment.” ‘That is consistent with the whole concept that a contract of employment for the purposes of this statute is brought to an end, i.e., it is terminated, when it is so broken that no further full performance of its terms will occur.’ (the appeal tribunal’s emphasis)[38]Applying that principle to this case, Mr Cornwell said whilst Ms Burnand’s communication to Ms Rinder on 1 November 2006 that Mr Radecki was being taken off the payroll as from November did not amount to an express statement that he was being dismissed, it nonetheless unequivocally conveyed that his employment was being terminated. He knew that Kirklees had reached the end of the negotiating road and were only prepared to agree to a compromise agreement providing for his employment to terminate on 31 October. He knew that he had the option of signing or not signing the agreement; and had no reason to believe that, if he did choose to sign it, Kirklees would not also do so. But – consistently with their negotiating stance – Kirklees also informed him that, as from the end of October, he was no longer to be paid any salary. The obligation to pay salary to an employee is an employer’s fundamental obligation under the employment contract. In this case, the contract had been an unusual one in that Mr Radecki had been suspended on full pay since October 2005 and had not since done a day’s work at the School. For practical purposes, the sole remaining vestige of his employment status was his right to receive and Kirklees’ duty to pay his salary. Yet on about 1 November he was told that his salary was to be stopped, as it was. Its stopping was a repudiation of his contract marking the severing of that last vestige and it evinced the clearest intention to bring the employment to an end. Contrary to Judge Serota’s view, its stopping could not be explained by the fact that there was an expectation that the compromise agreement was awaiting execution: it is an employer’s obligation to pay an employee his salary and there was no agreement that it should be suspended whilst Mr Radecki decided whether or not to sign the agreement.[39]Mr Cornwell also relied on the facts that no more salary was thereafter paid, Mr Radecki was not called to a disciplinary hearing, the School was closed and he was not notified of an alternative school, all of which, said Mr Cornwell, were consistent with the termination of his employment on about 1 November. I agree that those facts are so consistent – as is the fact that when Mr Radecki belatedly decided to re-open his employment status in February 2007, Kirklees’ response was that his employment had terminated at the end of October 2006. But I disagree that they lend any help to Kirklees’ case. As the court pointed out in Cort’s case, it is important that there should be no scope for doubt as to the EDT: the employee needs to know when it is and needs to know that at the time of the EDT. It follows in my view that Kirklees has to make good its case in this respect by focusing exclusively on what had happened by and in early November. If that was not sufficient to evince a clear intention to terminate the employment, Kirklees cannot expect to be able retrospectively to feed such insufficiency by reliance on subsequent events.[40]The essence of Mr Wilson’s counter-argument for Mr Radecki was that whilst the non-payment of salary can indeed amount to a repudiatory breach of an employment contract, Kirklees’ evincing of its intention to do so in this case did not amount to any such a repudiation. The stopping of the salary as from November 2006 was consistent with, and explained by, Kirklees’ expectation that Mr Radecki would sign the compromise agreement, which, when signed, would terminate the contract with retrospective effect from 31 October 2006. In those circumstances Kirklees could not be regarded as unequivocally intending by its action to bring the employment to an end at the beginning of November. What, asked Mr Wilson, would have been the position if, say, on 10 November Mr Radecki had told Kirklees that he had decided not to accept the compromise agreement? Can it be said with unshakeable confidence that Kirklees would not have unwound its payroll instruction and reinstated the disciplinary proceedings?[41]Mr Cornwell’s further submission, however, was that the employment judge had in fact made a finding that Kirklees had dismissed Mr Radecki at about the beginning of November 2006 – that is, that he had accepted the submission recorded in paragraph 30 of his judgment and repeated to us. For that Mr Cornwell relied on paragraph 39 of the judgment, in particular its first and sixth sentences. We had considerable argument as to whether the judge was there making a finding that Kirklees had summarily dismissed Mr Radecki on about 1 November. The fact that there was scope for that argument is a fair indication that such a finding does not leap from the page.

Discussion and conclusion

[42]I will deal first with Mr Cornwell’s last point, namely that the employment judge made a finding of fact in his favour in paragraph 39. If he did, that would, I consider, effectively foreclose Mr Wilson’s contrary argument about the effect of what happened at the beginning of November 2006.[43]Having read and re-read the judge’s reasoning for his decision, I am unable to accept Mr Cornwell’s submission. Paragraph 39 must be read in the context of the judge’s reasoning as a whole, of which the key paragraphs are 37 to 40, which I have cited. They reflect that his reasoning was wholly coloured by, and exclusively based on, his view that the termination on 31 October 2006 was consensual, the reasoning being based upon his erroneous reliance on the draft “subject to contract” compromise agreement. He opened paragraph 37 by referring to the relevant recital in that draft. The rest of that paragraph was essentially directed to making good the point that both sides were working on the basis of it. Paragraph 38 made the point that Mr Radecki remained willing to consider disposing of the matter by agreement and was content for Kirklees to continue to understand that. In paragraph 39 the judge referred in the second sentence to the draft agreement and did so again in the last sentence (“ … an agreement entered into …”). Whilst, read in isolation, the sixth sentence: “The correct factual analysis appears to be that [Mr Radecki] was aware that his employment had been brought to an end on 31 October 2006.” may be said to support, or at least be consistent with, the notion that the judge was finding (or also finding) that there was a summary dismissal on about 1 November 2006, I agree with Mr Wilson that he was there doing no more than saying that Mr Radecki knew that his employment had been terminated on 31 October 2006 because that is what he had agreed. The judge was there implicitly referring to the same “agreement” as he again referred to in the final sentence of paragraph39. Nowhere did he make a finding that Kirklees had summarily dismissed Mr Radecki on about 1 November or done anything evincing an intention to do so. Nothing in paragraphs 37 to 40 shows that he had any such point in mind. Moreover, the fact that paragraph 39 was wholly coloured by what he derived from the draft compromise agreement was then underlined by paragraph40. The purpose of that paragraph was to record Mr Radecki’s argument as to why it was wrong to place reliance on the draft compromise agreement. The judge’s riposte was that it was Mr Radecki’s argument that was wrong, and he again asserted that there was a consensual termination of the employment on 31 October 2006. That was, it should be noted, also Kirklees’ own initial reaction to Mr Radecki’s claim that he was still an employee (see Ms Burnand’s letter of 5 March 2007). In my judgment, reading the judge’s reasons as a whole, he cannot safely be interpreted as dealing anywhere with Kirklees’ paragraph 30 argument or as making any findings in relation to it. He thought there was a simpler answer to the case.[44]We do of course have the judge’s findings as to the facts upon which the paragraph 30 submission was advanced to him -- and now to us -- and I am not conscious that a final determination of that submission is one that requires any further findings of primary fact. We know what happened as well as did the judge. But the further question, which the judge never answered, is whether the correct inference from those primary facts is (as Mr Cornwell contended) that Kirklees unequivocally evinced an intention to terminate the employment contract as from about 1 November 2006; or whether (as Mr Wilson contended) the correct inference is that Kirklees did no such thing but was simply proceeding on the implicit basis that the probabilities were that the compromise agreement would be signed, which would itself(a) retrospectively terminate the employment contract with effect from 31 October 2006 and(b) acquit Kirklees of any further obligation to pay salary, although it would then have to pay two months PILON.[45]Judge Serota favoured the latter view. In my judgment, however, the correct answer to the question he there answered was one of fact and the relevant fact-finding tribunal was the employment tribunal, which did not make the required finding. I am not, with respect, confident that Judge Serota ought to have made the finding on the matter that he did or that this court should attempt to do so either. To do so was, and would be, to usurp the as yet undischarged function of the employment tribunal. In my judgment, whilst I arrive at this conclusion with considerable regret, the fair disposition of this appeal requires the remission of Mr Radecki’s claim to the employment tribunal for a re-hearing of the question as to whether or not his claim was presented within the time limit prescribed by section 111(2)(a).[46]I would allow the appeal, set aside the decision of the employment appeal tribunal and remit the claim to the employment tribunal for a re-hearing of that question.

Lord Justice Toulson :

[47]I agree that the appeal should be allowed for the reasons given by Rimer L.J. I also agree with Rix L.J that on Mr Hildebrand’s findings Kirklees brought Mr Radecki’s employment to an end, for the purpose of the statutory concept of the effective date of termination, by ceasing to pay his salary from 31 October 2006 (the last vestige of any performance of the contract), which they had indicated that they would do and which Mr Radecki knew that they had done when the payments ceased to come into his bank account. That is inconsistent with a continued willingness to enter into a settlement agreement. So I agree that the remission of the case to the tribunal is in these circumstances unnecessary.

Lord Justice Rix :

[48]I agree that this appeal should be allowed for the reasons given by Rimer LJ, with the result that we should set aside the decision of Judge Serota QC in the EAT. However, differing from Rimer LJ on his final point, I do not think there is any need to remit the matter to the Employment Tribunal, for I would hold that we are bound by the findings of fact already made by Mr Hildebrand in that forum to the effect that the effective date of termination, of which Mr Radecki knew, was 31 October 2006. As Mr Hildebrand found, in paragraph 39 of his decision: “The correct factual analysis appears to be that [Mr Radecki] was aware that his employment had been brought to an end on 31 October 2006”.[49]The jurisprudence cited by Rimer LJ indicates that the effective date of termination should be freed of the niceties and uncertainties of contract law and its general requirement that, where there is a repudiatory breach, the contract nevertheless continues until that breach is accepted: see the discussion at Chitty on Contracts, 30th ed, 2008, Vol II, at paras 39-185 and 39-213/4. Thus, the effective date of termination will be the date of summary dismissal, as long as that is known to the employee.[50]In the present case, the Council addressed two entirely different arguments to the Employment Tribunal. The primary argument was addressed by Mr Hildebrand at para 30:
“The Respondent’s submission is that from 31 October the fundamental basis of the contract was at an end: the Respondent was no longer paying the Claimant; the Claimant was not required to attend work; the Claimant was not required to attend a Disciplinary Hearing; and even though the School closed, the Claimant’s place of work was not transferred to another School.”
[51]That submission was not premised in any way on mutual consent. It arose from the most stark and basic facts governing the relationship of employer and employee, which it was submitted was at an end. That would be irrespective of whether the employer was entitled to end the contract of employment or not, and of course irrespective of agreement. That the unilateral termination of the contract of employment was the basis of this submission was then re-emphasised in paras 31/33 of Mr Hildebrand’s decision, where he briefly outlined the jurisprudence concerning the statutory concept of the effective date of termination, including Robert Cort and Dedman. All of that is under the heading of “The Law”. The point is re-emphasised in the plainest terms at the beginning of para 31, where Mr Hildebrand records – “The Respondent further contends that even if the failure to pay the Claimant was a breach of a fundamental term…the Respondent relies on authority for the proposition that the EDT is a purely statutory concept, and that failure to accept repudiation does not have the effect of continuing the contract when it has clearly been terminated.”[52]Under the heading of “The decision”, Mr Hildebrand went on to mention further submissions on either side. Thus at paras 35/36 he recorded Mr Radecki’s case that “his employment was brought to an end” only on his receipt of Kirklees’ letter of 5 March 2007, since he argued that this “was the first occasion on which he knew of the Respondent’s contention that his employment had come to an end”. At para 37 he records Kirklees’ further contentions by reference to the negotiation of the compromise agreement, which showed that Mr Radecki knew that he would be taken off the payroll by 7November. It followed that by mid-November when he would normally have been paid his November salary, if his employment had not been terminated, no salary was paid and, the tribunal found, Mr Radecki knew that. As Mr Hildebrand found (at para 37):
“The union instructed Solicitors to advise him on a Compromise Agreement in those terms, and the Respondent, in reliance on the union’s actions and after informing the union, terminated the Claimant’s pay. The Claimant’s case that he was unaware of this fact at the time is contrary to common sense. It also runs contrary to the date of termination of employment which the Claimant gave in his claim to the Tribunal. The correct factual analysis appears to be that his employment had been brought to an end on 31 October 2006.”
[53]Those are the central findings of fact of the Employment Tribunal on the essential conflicting factual case relating to the date of effective termination, with Mr Radecki relying on 6 March 2007 and Kirklees relying on 31 October 2006.[54]It is true that in para 40, in specific response to Mr Radecki’s contention “that, since the Compromise Agreement was without prejudice and subject to contract, it is of no effect until it is signed”, Mr Hildebrand went on at the end of that paragraph to say that, because Mr Radecki had agreed to termination as at the end of 31 October 2006, “Accordingly, the Claimant’s employment came to an end by mutual consent on 31 October”. However, that is not inconsistent with a statutory effective date of termination of the same date, by reason of the factual analysis already conducted at para 39, irrespective of consent. As Ms Burnand’s e-mail of 1 November 2006 had made clear, effectively on a “take it or leave it basis”, “she…would be instructing Payroll to terminate Mr Radecki’s payroll before the November pay deadline of the 7th” (at para 37). Indeed, if Kirklees’ essential or primary submission had simply been that the parties had agreed an effective date of termination of 31 October, there would have been nothing more that needed to be said, if that submission found favour. Mr Radecki’s knowledge of what he was being paid would have been irrelevant. All reference to the jurisprudence of Robert Cort and Dedman would have been quite beside the point. Mr Hildebrand would simply have been required to find whether an agreement had been reached or not. He appears to have concluded that an agreement had been reached. However, this was a conclusion on a secondary argument, and does not detract from the acceptance of the facts essential to Kirklees’ primary submission, which were that Kirklees “would be instructing Payroll to terminate Mr Radecki’s payroll before the November pay deadline”.[55]I regret I therefore do not agree with Rimer LJ that everything that Mr Hildebrand found was premised on mutual agreement. It seems to me plain that Mr Hildebrand, in addition to finding mutual consent, had already acceded to Kirklees’ central submission that Kirklees had brought Mr Radecki’s employment to an end, for the purpose of the statutory concept of effective date of termination, as Mr Radecki knew, by paying him only up to 31 October 2006.[56]In my judgment, therefore, remission is unnecessary. The critical findings have already been made. Whether rightly or wrongly, Kirklees had terminated Mr Radecki’s employment by 31 October 2006. Mr Radecki knew that within the fortnight. He pretended that he did not, that he was totally unaware that he had not been paid, and that he only discovered Kirklees’ position in March 2007. Mr Hildebrand rejected that case. The consequence was that Mr Radecki was out of time.

Cited in 44 later judgments

and 35 more of the most senior