Repudiation – When Does Termination Take Effect?

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In the event that a contract of employment is wrongfully repudiated the question often arises as to when the effective date of termination is.  There was some debate surrounding whether termination took place automatically (i.e. when the repudiation took place) or alternatively when the wronged party accepted the repudiation.  In the recent case of Geys v Societe Generale London Branch it was held that termination would not take effect until repudiation is accepted.

In November 2007, the Claimant was informed that his employment was going to end and that he would receive payment in lieu of notice in December 2007.  The Claimant reserved his rights as an employee and it was only in January 2008 that he received his payslip for the payment.

Due to the proper notice that had to be given under the contract a more generous termination payment was due if the termination took effect in 2008 rather than 2007, and it was for this reason that the date of dismissal was disputed.  The court held that if automatic termination took effect then this would enable a wrongdoer to determine a termination date which was to the detriment of the wronged party.  The fact that the Claimant did not receive payment in lieu of notice until January 2008 was determinative of the date of the proper notice of termination entitling him to a greater termination payment.

From a practical standpoint it is important that employers take care when drafting their termination of employment letters to their employees and that the notice is always ‘clear and unambiguous’.  The letter should not, as in this case, require the employee to have to ‘… check his bank account regularly in order to discover whether he is still employed’.  For any advice on the implications of termination dates and the process which needs to be taken please contact our Employment law team or call 01254 222399.

This entry was posted in Employment Law.

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