What if an employer mislays an employee resignation?

Yesterday I posted a piece on a local authority’s nonsensical decision to dismiss an employee from its employment when that employee had already resigned over four weeks previously. The question one reader has posed to me off the back of that post is if an employee has correctly sent a letter of resignation, but the employer has not read it (for example it has been mislaid) then when does the employment relationship come to an end (immediately or when finally read)?

The first thing to say is that a resignation is a unilateral act – it does not depend upon an employer ‘accepting the resignation’. In the normal course of event an employer has no right to interfere with a resignation (technically, an employer could apply for an order for specific performance of the contract – such as working the notice period – but the Courts have said repeatedly they will not make an order to that effect). The only exception is where a resignation is in the heat of the moment and even here, the employer is only allowed to give an employee the opportunity to ‘row back’ from the resignation if they acted rashly.  

But, to return to the question, in the previous article the employer received an email of immediate resignation at 9.21am on 4 March 2019, even though (allegedly) this was quarantined and not seen by anyone until it was released at early the next day. It is a fair question. In 2018 the Supreme Court (Newcastle upon Tyne NHS Foundation Trust v Haywood) considered whether the end of employment for an employee dismissed was the date a letter was sent, the date a letter was delivered to an employee’s address, or the date the employee first had the reasonable opportunity to read the correspondence. The Supreme Court (by a majority) determined the case in be the latter option in cases where termination is given by an employer to an employee (affirming a series of EAT decisions from 1980 onwards) but, intriguingly, that does not appear to be reciprocated in cases where termination is initiated by the employee.

In a dissent to the Lady Hale’s majority Supreme Court decision Lord Briggs (81) suggested there was an implied contractual term in all relationship contracts (including non-employment contracts):  

In my judgment there has been for over two centuries a term generally implied by law into relationship contracts terminable on notice, namely that written notice of termination is given when the document containing it is duly delivered, by hand or by post, to the home (or, if appropriate, business) address of the intended recipient, rather than, if later, when it actually comes to the recipient’s attention, or when the recipient, absent at the time of delivery, has returned home and has had a reasonable opportunity to read it. 

Lord Briggs (dissenting judgment in Newcastle NHS Foundation Trust v Haywood).

If Lord Briggs was correct then resignation is (under common law) effective at the time it was delivered, whether or not it came to the recipient’s notice. But the majority rejected that finding, which is why it was only when a dismissal notice is reasonable accessible to the recipient that it is effective.

I think the result is a somewhat confused position. For an employee the situation is certain but for an employer it does not appear that the same rationale is applicable in Haywood.

On my reading, if an employer terminates a contract that termination is only effective at the point the employee can reasonably receive it – even if delivered sometime beforehand. However, if an employee terminates the contract and delivers this to the employer then this is effective immediately (this distinction between approaches is referenced by Lady Hale at paragraph 31 of Haywood). I do not say this frequently, but I do have some sympathy for the employer in this situation (if the ignorance is genuinely inadvertent).

The issue of when resignations are effective (or the very similar effective date of termination after resignation) has been considered by at least two judgments of the EAT.

In Potter & Ors v RJ Temple PLC (2003) the claimant sent a fax resignation on Friday evening, when the office was closed, knowing it would not actually be read until the following week. The case concerned whether the effective date of termination was the date an employee faxed (remember them!) the company (as the employer argued, as the ET claim would then be out of time) or when read the following week (as the claimant argued, meaning the claim was in time). The EAT concluded (emphasis added) “we hold that where an employee communicates his immediate acceptance of a repudiation by fax [resignation], the effective date of termination is the date of receipt of the fax, not any later date when it is read or acted on.”

Similarly, in Horwood v Lincolnshire County Council (2012) a claimant sent a resignation letter on 28 January 2010, which was received (special delivery) on 29 January 2010. The letter was not read by the company until 1 February 2010. The next day, on 2 February 2010, the employer wrote to the claimant acknowledging the resignation and stating the effective date of termination was 2 February – the claimant relied on this date as the date of termination. The EAT agreed with the ET that notwithstanding the date in the letter the actual date of termination was the 29th of January (when the letter was received but had not read by the employer).

The conclusion therefore is that an employee’s resignation is effective as soon as it is delivered to the employer, whether or not the employer knows about the correspondence. As the two cases above show (and nearly all other cases on the similar issue) this usually raises its head when there is a question of whether the claim is in time. So really, it is an issue you should ensure you avoid by ensuring any claims are not left to the last couple of days of a limitation period, as by doing that one simple mistake of dates can destroy the chances of pursuing a positive claim.

I hope that answers the question for my inquisitive reader, please do keep questions coming if there are subject you think would be helpful to cover.

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