The Employment Appeal Tribunal’s decision on the Meaker v Cyxtera Technology UK Ltd case is a useful reminder of the importance of the precise wording of termination letters and settlement agreement proposals.

Background

 Mr Meaker, a manual worker was employed by Cyxtera Technology UK Ltd (CTUK) in a heavy manual night role.  Mr Meaker suffered back injuries and had been absent for an extended period. A conversation held with HR indicated that the employer was considering terminating his employment, and the possibility of a settlement agreement was raised.

Following further conversations with HR Mr Meaker believed that further enquiries were going to be made about alternative employment. But this was not the case.

CTUK sent him a letter on 5 February 2020, which was received on 7 February 2020.  The letter was headed “without prejudice”.  It started by stating it had been agreed that there would be a mutual termination of employment with Mr Meaker’s last day of employment being 7 February 2020. The letter also offered an ex-gratia payment, conditional on Mr Meaker signing a settlement agreement.  This was not signed by Mr Meaker. No settlement agreement was reached and a payment in lieu of notice was made on 14 February 2020.

Mr Meaker presented a claim for unfair dismissal on 19 June. At a preliminary hearing, the employment tribunal decided that his claim was out of time (three months from the effective date of termination) as CTUK asserted that his termination date was 7 February 2020. Mr Meaker appealed.

The tribunal found that the letter of 5 February was a dismissal letter, that the effective date of termination was 7 February 2020 and that the claimant’s subsequent claim of unfair dismissal, was, on that basis, presented out of time. It declined to extend time. The claimant appealed.

EAT decision

The EAT upheld the decision that Mr Meaker’s employment was terminated. The letter dated 5 February 2020 was a termination letter.

Notwithstanding the letter was headed “without prejudice”, the tribunal reads it as having two distinct parts. The first part was deemed to be an open communication confirming the termination of Mr Meaker’s employment on 7 February 2020. The offered ex-gratia payment was conditional on signing a settlement agreement. But the termination of employment on 7 February 2020 was not conditional on signing a settlement agreement and was therefore an effective termination.

The EAT also concluded that the claimant had not shown that it was not reasonably practicable to bring his claim in time.

Read the full case Meaker v Cyxtera Technology UK Ltd.

Learning

This tribunal case demonstrates the importance of being very clear in any communication about termination of employment.  If an employer wants to make the termination itself conditional on entering into a settlement agreement, they should use clear wording to do so.  It is also a good practice to keep open and without prejudice communications separately to avoid confusion.

It is also an important reminder about time limits in unfair dismissal and breach of contract claims. The claim will have to be submitted in three months less a day of the alleged termination.