Dismissal or leaving by mutual agreement

Mutual agreement to terminate employment is not a dismissal and so unfair dismissal cannot be claimed. The key is whether the employer has actually terminated the contract.

In Francis v Pertemps Recruitment Mr Francis was employed by the employment agency Pertemps, which placed him in work with a client whose identity was specified in the contract of employment. When that client no longer needed the services of Mr Francis, Pertemps offered him the choice either of two weeks' notice plus redundancy pay or two weeks' notice with the agency whilst it looked for other work with a view to him working for a new client.

At first he chose the latter option but then he changed his mind and chose the former. The HR department wrote to him confirming his position was redundant and that he was to treat the letter as "formal notice of redundancy". He was also told he had a right to appeal "against the decision to terminate your employment". Mr Francis appealed unsuccessfully. When Mr Francis claimed unfair dismissal, Pertemps argued that there was no dismissal but that the employment had ended by mutual agreement. The employment tribunal accepted this argument but the EAT overturned it.

The question of whether there was a dismissal for unfair dismissal purposes depended on whether the contract of employment had been terminated by the employer. They said that all the language used was consistent with termination by the employer. The choices offered to Mr Francis both involved his being given notice. The employer's arguments that "notice" and "redundancy" were loose terms, not intended to have their formal meaning, and that the right to appeal was "meaningless", were rejected as unrealistic. The appeal was allowed and a finding that there had been a dismissal was substituted. It was sent back to consider if this was fair or unfair. They recommended mediation pointing out that the sums at stake here were relatively small.