Letter of dismissal took effect on reading, not sending, says Supreme Court

Lauren Barratt was dismissed by charity Gisda Cyf over allegations about inappropriate behaviour at a private party. A disciplinary hearing on 28th November 2006 told her she should expect a letter outlining its decision on 30th November.

Barratt's sister had given birth so she travelled to visit her, leaving early on 30th November. She returned on 3rd December but was only told that a letter had arrived for her on 4th December, when she read it.

She appealed through the organisation's own procedures and, when that failed, launched a claim for unfair dismissal and sex discrimination on 2nd March 2007.

Such claims must be lodged within three months of a dismissal, and her claim would only be heard if the date of that dismissal was 4th December.

The Supreme Court ruled that the 'effective date of termination' of Barratt's employment was the date on which she read the letter.

"The simple but crucial question therefore is, when did the termination of her employment take effect?," said the ruling of the Court, delivered by Lord Kerr. "Was it when her employer decided to terminate the employment? Alternatively, was it when the letter was sent or on the day that it was delivered? Was it when Ms Barratt read the letter or should the termination be regarded as having taken effect when she had a reasonable opportunity of learning of the contents of the letter? If so, when did that reasonable opportunity arise?"

Gisda Cyf argued at employment tribunals and on appeal in the courts that Barratt had had a reasonable opportunity to see the letter before 4 December, and that the date should have been earlier.

The Supreme Court said that in order to assess the existence of that reasonable opportunity it had to look at Barratt's behaviour over the course of those few days.

"In examining the question whether Ms Barratt had the opportunity to learn of the contents of the letter, should the focus be on the reasonableness of her behaviour in failing to avail of the chance to discover what it contained, or should it be on the existence of the opportunity to do so?" said the ruling.

"The Employment Judge, the EAT and all the members of the Court of Appeal were unanimous in the view that to include consideration of the behaviour of the respondent in an assessment of whether she had a reasonable opportunity to find out what the letter contained was not an error of law," it said. "We agree."

Though there were people at her home who could have opened the letter and told her of its contents, the Court said that it was not unreasonable for her to not leave instructions for that to happen.

"The circumstances of the present case exemplify the need to be mindful of the human dimension in considering what is or is not reasonable to expect of someone facing the prospect of dismissal from employment," said the ruling. "To concentrate exclusively on what is practically feasible may compromise the concept of what can realistically be expected."

"The prospect of summary dismissal for gross misconduct (which Ms Barratt apparently entertained) is a fairly unenviable one. That she should wish to read the letter in which that prospect materialised is not in the least surprising. If it contained details of the findings made against her, it is entirely to be expected that, at least in the first instance, she would wish to absorb these alone. She is not to be condemned, therefore, for failing to give instructions that the letter should be opened and read to her during the weekend that she spent with her sister," said the ruling.

The Court said that the concept of a 'reasonable opportunity to discover' in relation to dismissal came from the Brown v Southall & Knight case. Termination of employment only takes effect when a person either reads a letter dismissing them or has a reasonable opportunity to read it. "If, however, the employee deliberately did not open the letter or if he went away to avoid reading it, he might well be debarred from saying that notice of his dismissal had not been given to him," said the Court.

The Court of Appeal had said that an Employment Tribunal was within its rights to rule that Barratt had not deliberately gone away to avoid reading the letter.

The charity argued that there was no demand in contract law for an employee to know of their termination for that to take effect. It also said that Barratt's behaviour was so severe that it was a rejection, or 'repudiation' of the contract, and that the employer's letter was an acceptance of that repudiation that took immediate effect.

The Supreme Court rejected these arguments, saying that employment law was a special case in which the balance of power favoured employers. Employees with little knowledge of contract law could not be expected to know of its demands, Lord Kerr said.

"As [Court of Appeal judge] Mummery LJ said, [Section 97 of the Employment Rights Act] is a statutory construct. It is designed to hold the balance between employer and employee but it does not require – nor should it – that both sides be placed on an equal footing," said Lord Kerr. "Employees as a class are in a more vulnerable position than employers. Protection of employees' rights has been the theme of legislation in this field for many years. The need for the protection and safeguarding of employees' rights provides the overarching backdrop to the proper construction of section 97."

"The essential underpinning of [Gisda Cyf's] case, that conventional principles of contract law should come into play in the interpretation of section 97, must therefore be rejected," he said. "The construction and application of that provision must be guided principally by the underlying purpose of the statute viz the protection of the employee's rights. Viewed through that particular prism, it is not difficult to conclude that the well established rule that an employee is entitled either to be informed or at least to have the reasonable chance of finding out that he has been dismissed before time begins to run against him is firmly anchored to the overall objective of the legislation."

The ruling considers postal communications differently than in some areas of contract law. The 'postal rule' in relation to contracts ensures that when it comes to making offers or accepting offers in contracts, communication is said to have taken place as soon as a letter is put in a post box. It cannot be retracted even if the recipient has not yet read the communication.

"Key to understanding when an offer can be withdrawn or not is when that offer is being accepted," contract law specialist Richard Parkinson told OUT-LAW Radio recently. "Now in terms of postal rule there is a slight anomaly in that if an acceptance is posted it is deemed to have been served at the time when it is put in the letter box so following that there can be no argument that the offer could be withdrawn."