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Resignations - Clarifying the Termination Date is Key

16 November 2018 #Termination

The Court of Appeal recently confirmed that an ambiguous letter of acceptance of resignation from an employer did not vary the original termination date by agreement.

JLT Speciality v Craven concerned a bonus advance of £500,000 which was agreed to be repayable if the Claimant resigned “on or before 31 December 2016”. The Claimant’s contract specified that he had a 52-week notice period, with a provision that such notice shall not expire before 31 December 2016. The Claimant resigned on 23 September 2015 “with effect from today’s date”. However, the contract specified that the employment could not come to an end before 31 December 2016. In response, JLT wrote to the Claimant accepting his resignation and confirming his employment “will end on 1 January 2017”. JLT subsequently wrote on various occasions to the Claimant stating his employment would end on 31 December 2016, thus the bonus advance would be repayable and needed to be paid by 7 January 2017. The Claimant did not pay back the advance.

JLT issued a claim for the repayment of the advance bonus in the civil courts and applied for summary judgment. The Claimant argued that the first acceptance letter from JLT amended his termination date to 1 January 2017 (thus the bonus was not repayable).

The Court of Appeal rejected the Claimant’s assertion, noting that the letter was not an “expression of willingness to contract on specified terms” and by continuing to work the Claimant had not accepted that new “offer.” As such the parties had continued under their existing rights and obligations. As such, the termination date was 31 December 2016 and had not been varied by JLT’s initial acceptance letter. Therefore, the bonus advance was repayable and summary judgment was granted in favour of JLT.

While the facts of the case are a little unusual, they reflect the need for both parties to clarify an employee’s termination date following a resignation.

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