In a recent judgment, the Employment Appeal Tribunal (EAT) clarified that a genuine but mistaken belief by an employer that an employee had resigned could amount to a “some other substantial reason” (SOSR) for dismissal under the Employment Rights Act 1996.
The case involved Ms Korpysa, who was employed via an agency and placed with an end-client. When the client ceased operations during the March 2020 COVID-19 lockdown, her services were no longer needed. According to the agency, Ms Korpysa then requested her holiday pay and a P45, citing that she had secured a new job; a request the agency interpreted as a resignation and acted on accordingly. However, Ms Korpysa later brought a claim for unfair dismissal, alleging she had not resigned.
The employment tribunal initially sided with Ms Korpysa, finding she had only asked for a copy of her contract and an advance on her holiday pay – actions that, in the tribunal’s view, did not clearly indicate an intention to resign. The tribunal concluded that the agency had dismissed her based on a mistaken assumption and ruled that this did not constitute a fair reason for dismissal.
The agency appealed the decision.
The EAT found that while the tribunal had been correct in identifying the employer’s belief as mistaken, it had erred in concluding that such a belief could never amount to an SOSR reason. The EAT confirmed that a sincerely held but incorrect belief that an employee has resigned can, in principle, justify dismissal provided it is not irrational or baseless.
The EAT also criticised the tribunal for not properly assessing whether the employer’s belief was reasonable and whether appropriate steps were taken to verify the resignation. It emphasised that determining fairness requires an evaluation of the reasonableness of both the belief and the employer’s response to it.
As a result, the EAT overturned the tribunal’s finding of unfair dismissal and remitted the case back for reconsideration, focusing on whether the employer’s mistaken belief qualified as a SOSR and whether the dismissal was fair in the circumstances.
Final Word
This case serves as a reminder that even a genuine mistake by an employer, such as wrongly assuming an employee has resigned, can potentially justify dismissal, provided the belief is reasonable and grounded in fact. However, employers must tread carefully by taking reasonable steps to clarify an employee’s intentions before taking any action as this is essential to avoid procedural missteps and unfair dismissal claims.
