1/ Fentem v Outform Emea: where the employee gives notice of termination & the employer later relies on a PILON clause to cut short the expiry of notice, the employer's act isn't a dismissal under s.95 ERA. The EAT decision in Hamblin is binding
bailii.org/uk/cases/UKEAT…
#ukemplaw
2/ In April 2019, F resigned on notice, giving 9 months' notice of termination of his employment. In December 2019, OE invoked a PILON clause, terminating F's employment early & paying him the salary due for the remainder of notice (though excluding bonuses that would be due).
3/ F brought an unfair dismissal claim in respect of the December termination. The ET held itself bound by the EAT decision in Marshall (Cambridge) Ltd v Hamblin that termination of a post-resignation period of notice by way of PILON didn't amount to a dismissal under s.95 ERA.
4/ On appeal, F accepted the ET was right on what Hamblin said but argued that the EAT shouldn't follow the decision. Unsurprisingly, OE's position was that the EAT was bound to follow it.
5/ Hamblin was a car salesman who resigned giving 3 months' notice & was then terminated by the employer a couple of weeks later, by paying H salary for the notice period but excluding commission. It also meant H lost the chance of sales & commission for the remaining notice.
6/ In Hamblin the ET held that an employer couldn't pay in lieu of unexpired notice where the notice had already been given by the employee & that doing so amounted to a dismissal before notice had expired. A majority in the EAT in Hamblin disagreed.
7/ The EAT in Hamblin held that given the employment contract continues during a notice period, the employer is entitled during that period to effectuate any PILON clause. The fact that H derived most of his earnings from commission was immaterial.
8/ The EAT in Fentem noted the extent of the EAT's entitlement to depart from its previous decisions, as per the 5 categories outlined in British Gas v Lock:
9/ The EAT rejected F's argument Hamblin was per incuriam Tipton from which F suggested a common sense/purposive approach could have been discerned. The EAT considered the per incuriam principle only applied where the oversight made the reasoning demonstrably wrong.
10/ F's main argument focused on whether Hamblin was manifestly wrong. F argued that his termination was clearly within s.95(1)(a) ERA, which brooked no exceptions - he was employed under a contract & it was terminated by the employer.
11/ OE noted the height of the Lock threshold & asserted that in Hamblin what had happened was merely the bringing forward of the date of termination, not altering the mode of termination - which was H's resignation.
12/ The EAT started its analysis by noting that termination by agreement falls outside the statutory definition of dismissal. Secondly, it noted that whilst an employer unilaterally terminating early during a notice period results in dismissal that wasn't what happened in Hamblin
13/ The EAT accepted OE's characterisation of Hamblin was a combination of an employee giving notice of resignation & an employer then invoking a contractual clause applicable when notice of resignation has been given, to end employment on an earlier date.
14/ F argued that even in that circumstance the termination resulted from a unilateral act of the employer, regardless of it being parasitic upon the employee's resignation & a termination allowed for under the employment contract.
15/ The EAT found highly troubling the conclusion in Hamblin that there was no dismissal. However, the question of whether it was manifestly wrong required consideration of whether a reasonable analysis could be argued in defence of Hamblin's outcome.
16/ The mainstay of the EAT's finding that Hamblin wasn't manifestly wrong was that it was reasonably arguable a provision of the contract could provide for an employer to cause employment to end sooner than the notice given without altering how & when resignation takes effect.
17/ The EAT also noted that there's a body of case law referenced in Harvey about what happens when an employer terminates with notice & the employee wants to bring the end of his employment forward, with the case law going against a finding that the employee has then terminated.
18/ Whilst HHJ Auerbach accepted F's submission those cases were all about the date being brought forward to accord with the employee's wishes, he didn't consider it obvious they offered no reasonable basis for arguing the line taken in Hamblin.
19/ As a result, in spite of his misgivings about Hamblin, HHJ Auerbach found that none of the Lock exceptions applied, he was bound by Hamblin, & any release from Hamblin's shackles would be a matter for the Court of Appeal.
20/ I guess that means I look forward to @MattJEJackson and @AdamSolomon3 arguing the point on the Court of Appeal livestream at some point in 2023.
Share this Scrolly Tale with your friends.
A Scrolly Tale is a new way to read Twitter threads with a more visually immersive experience.
Discover more beautiful Scrolly Tales like this.