Forced resignation held to be a dismissal

The Court of Appeal in Sandhu v Jan de Rijk Transport Ltd [2007] considered whether an employee had resigned in response to a threatened dismissal, and should therefore be regarded as having been dismissed, or whether he voluntarily resigned after agreeing severance terms with his employer.

The Court of Appeal decided that Mr Sandhu had in the circumstances been dismissed and was therefore able to bring a claim for unfair dismissal in the Employment Tribunal.

Mr Sandhu was called into a meeting, of which he was given no prior notice, and informed by his employer that he was being dismissed. However, at the same meeting, the employee negotiated favourable severance terms. Mr Sandhu subsequently brought a claim against the company for unfair dismissal.

Although the original Employment Tribunal and the Employment Appeal Tribunal decided that Mr Sandhu had voluntarily resigned after negotiating favourable financial terms, the Court of Appeal disagreed. This was on the basis that it could not be said that Mr Sandhu had freely negotiated his departure terms. He had had no warning that the purpose of the meeting in which he was to be dismissed was to be a dismissal meeting. He had received no independent advice and had no time to reflect on his position. He was simply attempting to salvage what he could from the fact that he was going to be dismissed.

The Court of Appeal in this case was very critical of the employer's failure, taking into account its size (with hundreds of employees) to have proper structures in place for disciplining and dismissing its employees. The employer in this case failed to investigate allegations of misconduct regarding Mr Sandhu and failed to notify him of the charges against him in advance of the meeting in which he was dismissed. This case is a prudent warning to employers who fail to adopt a fair process prior to dismissal and seek to agree settlement terms with its employees.