'Without Prejudice' Letter Was Termination Letter for Purposes of Employment Tribunal Claim

What Was the Background to the Claim?

In the case of Meaker v Cyxtera Technology UK Ltd, Mr Meaker had been off sick for an extended period of time and was not able to return to his duties. Cyxtera indicated to Mr Meaker that it was considering terminating his employment, and raised the possibility of entering into a settlement agreement. Mr Meaker was under the impression that discussions would continue, but instead Cyxtera wrote to him on 5 February 2020 on a 'without prejudice' basis, enclosing a draft settlement agreement. The letter referred to a mutual agreement to terminate Mr Meaker's employment. It confirmed that Mr Meaker's termination date would be 7 February. It also set out Mr Meaker's notice and holiday pay entitlements, and that he would be sent his P45. The letter also offered a further payment which would be conditional upon Mr Meaker entering into a settlement agreement. He did not enter into the agreement.

Mr Meaker received his notice and holiday pay on 14 February. He subsequently brought an unfair dismissal claim, and a preliminary argument arose in respect of whether the claim had been brought in time. An Employment Tribunal claim must be brought within three months of the 'effective date of termination' (EDT), with an allowance for any time spent in ACAS early conciliation. The EDT was crucially important in this case. If the EDT was the date stated in the letter (7 February) then Mr Meaker's claim would be out of time. Alternatively, if the EDT was the date of the payment (14 February), the claim would be in time and could proceed.

The Tribunal found that the letter was an effective termination letter and that Mr Meaker's claim was therefore out of time. Mr Meaker appealed to the EAT.

What Was the EAT's Decision?

The EAT dismissed Mr Meaker's appeal. The EDT was the date of the summary dismissal, even in circumstances where the dismissal was a breach of contract. It was not necessary for Mr Meaker to 'accept' the breach in order for the termination to be effective.

In respect of the letter itself, its construction was a question of fact for the Tribunal, whose decision could only be overturned if it was perverse. Whilst the letter wrongly referred to a mutual agreement to terminate Mr Meaker's employment, this did not undermine the clear and unambiguous wording of the letter. The letter confirmed that Mr Meaker's employment was to terminate on the stated date. Although it was marked 'without prejudice' the Tribunal had been entitled to read it as having an open section, which set out the termination arrangements, and a second 'without prejudice' section, concerning the settlement agreement.

What Can Employers Learn From This Decision?

Whilst the appeal went in the employer's favour, this case nevertheless highlights the confusion that can be caused when an employer fails to clearly separate out 'open' and 'without prejudice' correspondence. A best practice approach would be to set out termination arrangements in open correspondence. This reduces the risk of any argument that the termination is subject to agreement. If the employer wishes to offer a settlement agreement it should do so separately, on a without prejudice basis.

For more information on 'open' and 'without prejudice' correspondence, please contact Ellen Netto in our Employment law team on 0117 314 5377. Alternatively, please complete the form below.