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UK – Temporary employee wins right to appeal unfair dismissal

23 August 2013

A temporary worker assigned to a client company has successfully won the right to bring an unfair dismissal case against his recruitment agency Pertemps, according to the Chartered Institute of Personnel Development (CIPD). According to the judgement of the Employment Appeals Tribunal (EAT) the temporary worker did not leave his job by ‘mutual consent’.

The temporary worker, Mr Francis, was advised by the client company that the job he was performing was being moved to another location. As a result, the client company no longer required his services. Mr Francis’ recruitment agency, Pertemps, provided Mr Francis with two options;

1)      Accept two weeks’ notice and receive redundancy pay

2)      Accept two weeks’ notice with the agency looking for alternative employment for him

Mr Francis chose the former and Pertemps wrote to him confirming that his position was redundant and that he was to treat the letter as a formal notice of redundancy. The letter confirmed that he had two weeks’ notice and gave him a right of appeal against the decision to terminate his employment. Mr Francis appealed and was unsuccessful. He then claimed unfair dismissal. 

Pertemps argued that there was no dismissal and that the employment relationship had ended by mutual agreement. The employment tribunal identified that Mr Francis was, unusually, working under an employment contract that meant that his employment would come to an end if the work for Pertemps’ client ended as neither the agency nor Mr Francis had the contractual right to move elsewhere. If the agency tried to move him to another client, it would have breached the provision that he worked for the specified client. The agency would have needed Mr Francis’ consent to a contract variation.

The tribunal looked at who had brought the contract to an end. It decided that Mr Francis had had a choice and had been under no pressure to end the contract. It concluded, therefore, that the agency and Francis mutually terminated the employment contract. So, this meant there was no dismissal and Francis could not pursue his claim for unfair dismissal. He appealed.

The EAT allowed the appeal and overturned the employment tribunal’s decision. The question of whether there is a dismissal for unfair dismissal purposes depends on whether the employment contract is terminated by the employer with or without notice. In contrast, the test for whether a redundancy payment should be made depends on whether the employment relationship is being terminated. So, even if an employer terminates contracts of employment, employees may not be entitled to a redundancy payment if they are re-engaged under new contracts.

In this case, the focus should not have been on whether Mr Francis remained in employment, or had the option to do so, but whether the employment contract was terminated and, if so, by whom. The EAT held that, if the employment tribunal had focused on the contract of employment rather than on the employment relationship, it would have concluded that the contract had ended without Mr Francis having consented to it. All the language used was consistent with the contract being terminated by Pertemps and both the choices offered to Mr Francis involved his being given notice of termination of employment.

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