Employment contracts — termination or mutual separation?
By Louise Corfield
Louise Corfield looks at what happens when decisions to terminate an employee overlap with a mutual separation.
It is well known that an employment contract can be brought to an end in a number of ways: by dismissal by the employer; notice given by the employee or an employee’s acceptance of a repudiatory breach; frustration; expiry; or mutual agreement. In cases where it is suggested that there was a mutual agreement, employment tribunals will always carefully scrutinise that suggestion, but they do not always get it right. The June 2013 Employment Appeal Tribunal (EAT) decision in Francis v Pertemps Recruitment (Appeal No: UKEATS/0003/13/BI) is the most recent high-profile example of a failure by an employment tribunal to do just that.
Most commonly, the scrutiny of a suggested mutual agreement or mutual separation arises in situations in which an employer has given an employee the choice to ‘leave before they are pushed’. The leading authority on this point is Sheffield v Oxford Controls Company  IRLR 133 in which it was held that if an employee chooses to leave consensually, but only because of the threat that they will be dismissed if they do not leave, then this is no real choice at all. The causative link to the ending of the employment contract is the threat, and therefore despite the employee ‘choosing’ to leave it will be considered a termination. In Sheffield v Oxford Controls Company, Arnold J made clear, however, that if the threat is not causative and an employee consents to go and is genuinely willing to go on terms that have been agreed, perhaps because they are advantageous, then the threat is no longer causative and there will not be deemed to be a dismissal. Such a case would therefore be a consensual or mutual separation…
If you are registered and logged in to the site, click on the link below to read the rest of the No5 Chambers briefing. If not, please register or sign in with your details below.
Sign in or Register to continue reading this article
It's quick, easy and free!
It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.Register now
Why register to The Lawyer
In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.
Identify the major players and business opportunities within a particular region through our series of free, special reports.
Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.
More relevant to you
To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.
News from No5 Chambers
News from The Lawyer
Briefings from No5 Chambers
Gypsies and travellers have played a major role in human rights litigation both in the European Court of Human Rights and in UK courts
Judges make mistakes and legal error is accepted.