Francis v Pertemps Recruitment Partnership Ltd concerns the dividing line between dismissal and termination of a contract by mutual consent. Mr Francis was a temp in the fortunate position of having a contract of employment with an agency – who supplied him to Transco to do administrative work. When the successors to Transco’s business, SGN, no longer required his service, he was given the choice of taking a redundancy payment or hanging on while the agency looked around for new work for him.

On his return to Pertemps on 12 December 2006 (yes 2006 – it has taken that long to resolve!) he had the options outlined to him (in rather inelegant terms):

Depending on how you feel yourself, whether you are happy for Pertemps to keep on looking for another assignment for you elsewhere, and we do have other bits and pieces in at the moment or things coming up in the New Year, that we’ll be happy obviously to speak to you about or…there might be an entitlement for you to a redundancy payment from Pertemps because of the work you have previously…for the last two and a half years…has come to an end.

He was also told that in either case he would receive a payment of two weeks’ pay, described as “notice pay”.

To start with he opted for staying on, but then he concluded the chances of something turning up were slim, and as he would not be able to claim jobseekers’ allowance if he remained with the agency, he changed his mind. He also lacked faith that he would be engaged through Pertemps to work in a possible opening at the Scottish Parliament. He was then given a letter which looked suspiciously like notice of termination:

Following your meeting of 12th December 2006 it is with regret that I confirm the position of Process Assistant will become redundant with effect from 12th December 2006…Please treat this letter as formal notice of redundancy…In accordance with your contract of employment you are entitled to two weeks notice, therefore your last date of employment will be recorded as 26th December 2006.

The letter was written by an HR advisor and is, on any reading, a pretty poor effort. Mr Francis exercised his right of appeal and in February 2007 his redundancy was confirmed.

Mr Francis presented a claim to an employment tribunal which concluded that “…the parties mutually terminated the contract. There was no dismissal”. Pertemps had maintained that he was not entitled to make such a claim, because his employment had been terminated by mutual agreement, rather than by dismissal, and that when they had talked about “redundancy” and “notice” they had not really meant it.

While an employment tribunal interpreted the situation as one where Mr Francis was not under pressure to end his contract and that there had been a consensual parting of the ways, the Employment Appeal Tribunal held that it had missed the point that there had been a contract of employment which had been terminated without Mr Francis’s consent.

If the Tribunal had focused not on upon the employment relationship, but upon the contract of employment, it could have reached no conclusion but that that contract had come to an end without the Claimant having in any way consented to that taking place. It follows that the conclusion of the Tribunal is wrong. We suspect it committed the error, understandable in the particular circumstances of this case, of focusing upon the employment relationship and its continuation rather than on the contract which could not continue as it had before.

It therefore substituted its own finding that there had been a dismissal. So, after seven years, the matter is now to be remitted to a new tribunal to consider whether the dismissal was fair. The EAT noted that the claim is of relatively low value and urged the parties to consider mediation – not before time!