CF CAPITAL V WILLOUGHBY
FACTS
In the case of CF Capital v Willoughby, the employer, CF Willioughby entered into discussions with Ms Willoughby about a potential redundancy situation and the possibility of her switching from employment to self employment, as a way of avoiding redundancy. Ms Willoughby stated that before she could make a decision, she would need further details about the arrangement.
In December, the employer wrote to Ms Willoughby confirming that her current employment would terminate with effect from 31 December and as of 1 January she would be engaged under the terms of the new self employed arrangement. Upon receipt of the letter, Ms Willoughby telephoned her employer, stating that she would not accept the new arrangement and that she regarded herself as dismissed.
The employer sought to rectify the situation and indicated that there had been a misunderstanding and that if Ms Willoughby did not want to accept the self employed arrangement, her position would revert to what it had been previously before.
Ms Willoughby rejected this and brought a claim in the Employment Tribunal for unfair dismissal and wrongful dismissal. The employer argued that Ms Willoughby had not been dismissed but had resigned.
DECISION
The Employment Tribunal originally found that whilst the employer's letter on the face of it was a dismissal, there were "special circumstances", namely a mistake or genuine misunderstanding between the parties as to what had been agreed. The Tribunal decided Ms Willoughby should have realised this.
Ms Willoughby appealed to the EAT and argued that the "special circumstances" rule only really applied where words were spoken in the heat of the moment. This was not the case here. The EAT overturned the Tribunal's decision and agreed that the dismissal was effective. The Employer appealed.
The Court of Appeal agreed with the EAT that Ms Willoughby had been dismissed. It found that the letter of dismissal used clear and unambiguous words of dismissal. Where this applies it is difficult to find an exception to this rule. The "special circumstances" rule will require exceptional circumstances and a simple mistake in issuing a letter, as in this case, will not suffice.
PRACTICE POINTS
In the current economic climate where employers and employees are seeking more and more alternative and novel ways to avoid redundancies, this case is a good example to employers of ensuring that they pay attention to detail and finalise terms before issuing notices of termination. It will only be in very rare circumstances that an employer is able to retract a dismissal, so care must be taken to ensure that termination letters are accurately drafted and do actually intend to end the employment relationship.
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