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The Employment Appeal Tribunal (EAT) has held in Basra v BJSS Ltd that a tribunal was wrong to exclude evidence of pre-termination negotiations under Section 11A of the Employment Rights Act 1996 when determining the effective date of termination for the purposes of an unfair dismissal claim.

Section 111A allows employers and employees to have confidential discussions regarding ending the employment relationship, even where there has been no previous dispute. The discussions will be inadmissible as evidence in any subsequent employment tribunal proceedings for unfair dismissal.

Mr Basra was employed as a technical architect towards the end of 2013. A couple of years later BJSS began to have concerns about his performance following complaints from customers. It raised these concerns at a meeting with Mr Basra, during which he suggested that he could resign. Two letters were subsequently sent by BJSS to Mr Basra on 1 March 2016.

The first invited him to a disciplinary meeting, and the other (which was marked "without prejudice and subject to contract") offered him three months' salary in return for immediate termination under a settlement agreement. On 3 March Mr Basra responded by email accepting the offer but did not sign a settlement agreement. He instructed solicitors who wrote to BJSS to say that he had been signed off with stress and would not be attending the disciplinary hearing. BJSS then wrote a letter on 15 March stating the Mr Basra's employment had been terminated by agreement on 3 March.

Mr Basra brought an unfair dismissal claim and BJSS argued that his employment had ended by mutual termination and, in the alternative, that his 3 March email was a resignation. The tribunal held that the acceptance email amounted to a resignation and, as he had not been dismissed, his claim fell away. It excluded BJSS's offer letter as protected under section 111A.

The EAT disagreed, holding that the dividing line between what is and what is not excluded by section 111A lies on the point at which the contract is terminated. Where there is a dispute as to whether or not the contract was terminated on a particular date, the tribunal would not be in a position to say what evidence should be excluded until that dispute is determined. The matter was remitted to the same tribunal to re-examine its findings in the context of BJSS's without prejudice offer of a settlement agreement.

Take note: As the tribunal noted at first instance, there is little leverage left to an employee who chooses to resign and then agree the terms of their departure. Basra demonstrates the importance of a claimant protecting their position by stating that their decision to leave their employment will be subject to suitable terms being agreed. The protection of section 111A will then apply until the point at which a settlement agreement is signed.

This article is taken from HR Law January 2018.