on Thursday, 21 September 2023.
In the case of Riley v Direct Line Insurance Group plc Mr Riley was employed as a home claims advisor by Direct Line Insurance Group plc (DLIG). He had autism spectrum disorder, anxiety, and depression. He was a member of a private health insurance scheme that would provide benefits until state pension age in the event of the employee's incapacity.
Following a lengthy period of ill-health absence, DLIG broached the topic of whether Mr Riley would be interested in agreeing the termination of his employment, on the basis that he would be able to access incapacity benefits from his private health insurer. Mr Riley agreed in principle that he would be interested in termination on this basis, so long as he would be able to access those benefits.
Following a period of discussions between the parties and the insurer, Mr Riley's entitlements were confirmed. A final meeting took place to confirm arrangements for terminating his employment, following which the employer sent a letter referring to Mr Riley's 'dismissal'.
Mr Riley brought Employment Tribunal claims including unfair dismissal and failure to make reasonable adjustments. The Tribunal rejected the claims, finding that Mr Riley had not been dismissed because his employment terminated by mutual agreement. Mr Riley appealed to the EAT.
The EAT rejected the appeal. It had been open to the Employment Tribunal to find that the parties had mutually agreed the termination of employment. Where employment terminates by freely given mutual consent of the parties, this does not constitute a dismissal in law. Each decision will turn on its own facts, and in Mr Riley's case there was ample evidence that both parties had mutually consented to the termination. Mr Riley had not been tricked or coerced and he was an active participant in discussions with the private health insurer.
This is a fact-specific decision, which nevertheless serves as a useful demonstration of the distinction between mutually agreed termination and a dismissal in law. In circumstances where employment is terminated through mutual agreement, employers should ensure this decision is clearly documented, and depending on the circumstances it could be sensible to consider entering into a settlement agreement in order to record the agreement reached.