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In the sphere of employment law, the claims history in terms of the Master Policy reveals that missed time limits in unfair dismissal claims are one of the most common causes of claims for negligence in employment litigation matters. This is always a topical issue and, as we report below, even the Supreme Court has ruled on the topic of termination date and time limits for unfair dismissal claims.

In this article we go back to basics, taking a look at time limit issues in relation to unfair dismissal claims, and provide some risk management tips to avoid negligence claims arising.

Relevant time limit

An unfair dismissal claim must generally be presented to the employment tribunal “before the end of the period of three months beginning with the effective date of termination (EDT)”, in terms of the Employment Rights Act 1996 (ERA 1996), s 111(2)(a).

In claims alleging unfair dismissal, time starts to run from and including the EDT. To determine the last day of the three month time limit, take the day and date immediately before the EDT and go forward three months. So, where, say, the EDT is 10 July, the three month time limit begins to run from the beginning of that day and the claim must be presented to and received by the employment tribunal not later than midnight on 9 October.

The EDT in terms of ERA 1996, s 97(1) is:

• the date on which the notice expires, where the contract is terminated by notice, whether issued by the employer or by the employee;
• the date on which termination takes effect, where the contract is terminated without notice;
• the date on which termination takes effect, where the contract is a limited term contract which terminates by virtue of a limiting event without being renewed.

In many cases, the employee’s EDT is clear and undisputed – for example, the EDT is 17 May 2011 and therefore the three month time limit would expire at midnight on 16 August 2011. An ET1 in the prescribed form setting out a claim for unfair dismissal would require to be presented to the employment tribunal office (by hand, by post, by fax or online submission) before midnight on 16 August 2011. If that claim was received by the employment tribunal by that date, the unfair dismissal claim can proceed as it was lodged in time.

Ascertaining the EDT

So, why are so many time limits missed for unfair dismissal claims? Many factors can arise at the time of dismissal which can catch out the unwary solicitor in ascertaining the EDT – internal appeals, ambiguous termination letters and delay in the employee receiving the dismissal letter. If errors are made by solicitors at the stage of identifying the EDT, this will result in the wrong time limit being identified which, as we see below, can result in a claim being ruled as time-barred as it is lodged out of time.

Even the Supreme Court looked recently at this thorny issue, in Gisda Cyf v Barratt [2010] UKSC 41. The employer dismissed the employee by recorded delivery letter signed for by her son on 30 November. She was expecting the decision letter to arrive, but was away for a few days for family reasons and did not open the letter until her return home on 4 December. She presented an unfair dismissal claim on 2 March. If the EDT was 30 November, her unfair dismissal claim was presented out of time. If it was 4 December, her unfair dismissal claim was presented within time.

The Supreme Court held that the EDT was 4 December, i.e. when she actually read the letter. As she did not know of the decision until 4 December, had not deliberately failed to open the letter and had not gone away to avoid reading it, then the EDT would be the date she actually learned of the decision to dismiss – that is, when she read the letter. Her claim for unfair dismissal was presented within the three month time limit and could proceed.

ET discretion to extend time limit

If an unfair dismissal claim is not presented within the initial three month period from the EDT, the employment tribunal may consider a complaint presented “within such further period as it considers reasonable in a case where it is satisfied that it was not reasonably practicable for the complaint to be presented before the end of the period of three months” (ERA 1996, s 111(2)(b)).

So – when is it not reasonably practicable for the complaint to be presented before the end of the three month period? We detail two examples below where solicitors were involved, but remember that each case turns on its own facts.

Case study 1

An employee taking legal advice which turned out to be wrong legal advice, was not a sufficient reason in one case to allow the tribunal to exercise discretion and allow the claim to be presented late. The solicitor advised the employee to await the outcome of the appeal against dismissal before lodging a claim of unfair dismissal, which he did. The claim was lodged one day late. The Employment Appeal Tribunal (EAT) held that the claimant who had taken (negligent) legal advice and relied on it was aware of the issue of time limits and had himself miscalculated the last date for lodging the claim. The EAT concluded that it was reasonably practicable for the claimant to present his claim for unfair dismissal in time. He did not do so, and his claim for unfair dismissal was dismissed.

• That claimant may well look for a remedy against the solicitor who gave the negligent advice.

Case study 2

Where the employee’s solicitor posted the ET1 claim for unfair dismissal but it did not arrive at the tribunal office within the three month time limit, that was not a sufficient reason in one case to allow an extension of the time limit. The “not reasonably practicable” test is only satisfied if the claimant or their advisers can show that they have taken all reasonable steps to see that the claim was received by the tribunal in time, and this includes checking the position if no reply has been received. In these circumstances, as the solicitor had not carried out any such check, it could not be said to have been not reasonably practicable for them to have presented the claim in time.

• The claimant was unable to proceed with his unfair dismissal claim and that claimant may well look to the solicitor for a remedy.

Risk management points

If you are instructed to advise an employee in connection with an unfair dismissal claim, you must identify and diary the critical dates – the EDT and time limit for lodging any claim for unfair dismissal – and always diary reminders ahead of critical dates. Better to diary the earliest possible date for presenting the ET1 to be on the safe side – better early than late.

If in doubt about calculating these dates, take expert advice or pass the client to a solicitor with the relevant expertise. In the words of the Master Policy insurers – “do not dabble”. The maximum compensation for a successful unfair dismissal claim is over £80,000 per employee. This could be the potential value of any negligence claim if a time limit is missed because of an administrative error or the time limit is miscalculated, and the unfair dismissal claim is lodged late and is ruled as time-barred.

Tell the client of these critical dates with a clear deadline to provide you with instructions if you are to prepare a claim for unfair dismissal for their approval. Also, provide clear instructions that if they do not provide instructions by that date, you will not lodge any claim on their behalf and they may lose their right to pursue the claim. It is crucial to record what you have been instructed to do, and also tell the client what you will not do. A written record of advice and instructions should avoid any confusion or misunderstanding, and will of course allow you, or the Master Policy insurers on your behalf, to defend your position if a dispute arises at a later stage, as can happen.

If your client’s instructions are to present the ET1 claim form, present it and have a diary system to ensure you have an email or postal acknowledgment within the time limit. If you have not received such acknowledgment, call the tribunal office to check and resubmit the ET1 if required.