14 October 2011 #Employment
The Court of Appeal has upheld the EAT’s decision in CF Capital v Willoughby concluding that an employer was unable to withdraw notice of termination given to an employee as a result of a “misunderstanding.” CF Capital sought to rely on the “special circumstances” exception which would allow the employer to retract the notice. However, the Court of Appeal (in agreement with the EAT) held that the notice given by the employer was clear and unambiguous and provided a clear intention to terminate.
In this case, CF Capital provided Ms Willoughby with notice to terminate her contract on the understanding that she would be re-hired as an agency worker. However, Ms Willoughby was unwilling to accept the new terms and so the employer sought to retract its notice and reinstate her on the original terms of her employment. Ms Willoughby refused and claimed wrongful and unfair dismissal.
The Court of Appeal based its decision on the general legal premise that a party is not allowed unilaterally to withdraw notice which is given properly. However, it highlighted the fact that the case law in this area has developed certain “special circumstances”, usually involving notice given in the heat the moment, which can entitle the party to withdraw it subsequently. However, the Court of Appeal confirmed that the “special circumstances” exception can only be used in extreme cases and not where the notice was given as a result of a “misunderstanding”.
The Court of Appeal noted that although “notice of dismissal cannot be unilaterally retracted” it can be “withdrawn by consent.” Further, Lord Justice Rimmer explained that the “special circumstances” exception (which CF Capital sought to rely on) would apply where notice was given as a result of an “acrimonious exchange between employer and employee...uttered in the heat of the moment such that there may be a real questions as to whether they were really intended...” Therefore, notice given as a result of a “misunderstanding” would not suffice.
Employers should be mindful, when serving employees with notice of termination, that it will be extremely difficult (if not impossible) to withdraw it, unless the employee agrees. Employers need to ensure that they are completely satisfied that they are making the right decision, in order to avoid potential unfair and wrongful dismissal claims.