Buddy says: It is unlikely that a termination in such circumstances would be a resignation, it is more likely to be treated as a dismissal.  Existing case law suggests that, for there to be a resignation, there should be some form of negotiation and discussion, leading to a result which is a genuine choice on the part of the employee.

Employer information

In the recent case of Sandu v Jan de Rijk Transport Ltd the Court of Appeal considered whether an employee resigned or was dismissed when he entered into a severance agreement during a meeting at which he was told that he was going to be dismissed.  There was conflicting evidence on what happened at that meeting, and the employer argued that Mr Sandhu was not, in fact, dismissed at that meeting and that he resigned, having negotiated satisfactory severance terms during the course of the meeting.  A letter was signed by the employer and Mr Sandhu, in which it was agreed that he would work for a specific period, keep his company car for another period and that his employment would terminate on a specific date.

The Court held that in this case the employee had been dismissed.  The Court of Appeal suggested that resignation implies some form of negotiation and discussion, leading to a result which is a genuine choice on the part of the employee.  It noted that he had no warning of the purpose of the meeting, was not able to take advice and had no time to reflect. It therefore could not be said that he was negotiating freely, but rather was trying to get the best out of the inevitable dismissal.  It also noted that the terms of the severance agreement were not particularly favourable to Mr Sandu.

Where an employer is seeking to negotiate a termination by mutual agreement and wishes to avoid the tribunal finding that the employee was dismissed, it should ensure that there is some form of negotiation and discussion, leading to a result which is a genuine choice on the part of the employee.  Failure to do this could result in the termination being classed as a dismissal, with potential for an unfair dismissal claim and uplift of compensation if the employer does not comply with the statutory dismissal procedures.