Case update
When does early conciliation extend the time period for unfair dismissal claims?
The Employment Appeal Tribunal (EAT) has held that the three month limitation period for unfair dismissal claims before the Employment Tribunal (ET) is only extended by the number of days of the early conciliation (EC) period that occurs after the effective date of termination (EDT). The days of the EC period that occur before the EDT are not included in the calculation to extend the time limit.
Background
17 February 2023
DFCB Capital Bank Ltd (DFCB) terminated the Claimant’s employment with effect from 17 February 2023, meaning that the EDT for the purposes of bringing an unfair dismissal claim before the ET was 17 February 2023.
28 February 2023
The Claimant started the EC process on 13 February 2023 (i.e. before the EDT). The EC process was concluded on 28 February 2023 with an EC certificate being issued.
30 May 2023
The Claimant brought an ET claim for automatic unfair dismissal on the grounds of having made a protected disclosure. By issuing a claim on 30 May 2023, the claim was (on the face of it) out of time, as it was brought more than three months from the EDT.
S.207B of the Employment Rights Act 1996 (ERA) provides circumstances in which an extension of time may be permitted in order to facilitate conciliation before proceedings are instituted by a potential claimant. It was agreed between the parties that the effect of s.207(B)(3) was that it would extend the three month limitation period provided in s.111(2)(a) ERA to bring a complaint before the ET.
The question, however, was whether the effect of s.207(B)(3) ERA would:
1) extend the three month limitation period by the number of days in the entire EC period; or
2) only extend the three month limitation period by the number of days in the EC period that occurred after the EDT.
The answer to that question was crucial to the Claimant’s ability to bring her claim. If the Claimant could rely on the entire EC period to extend the limitation period, even though some of the EC period fell before the EDT, then her claim would be in time. If instead the latter approach above was correct (i.e. that the limitation period would only be extended by the number of days of the EC period that fell after the EDT), then the Claimant’s claim would be out of time by three days.
The ET ruled in favour of DFCB and found that the limitation period to bring a claim was extended only by the number of days of the EC period that fell after the EDT. Therefore, the Claimant’s claim was brought outside of the time limit, which expired on 27 May 2023. The Claimant therefore appealed to EAT.
EAT Decision
The EAT upheld the ET’s decision and found that the Claimant’s claim was out of time.
The EAT explained that the correct approach for working out limitation periods in respect of a claim is by: (1) identifying the date when time starts to run; (2) adding the statutory limitation period to work out the expiry date; and then (3) working out whether there is any statutory provision that “stops the clock” or extends the time limit.
In respect of the Claimant’s claim for automatic unfair dismissal, the date by which time starts to run is the EDT. There is no need to include a period before the date when limitation started to run, as such a period does not count for these calculation purposes. Therefore the EAT concurred with the ET’s decision that the effect of s.207B(3) is to “stop the clock” and therefore extend the limitation period for an unfair dismissal claim by the number of days in the EC period that occurred after the EDT.
The EAT also rejected the Claimant’s argument that this unfairly penalises prospective claimants and that this would deter employees from commencing EC at an early stage. It considered that it would be an unfair “bonus or advantage” for the claimant to allow a time limit extension for bringing a claim that included any part of the EC period that occurred before the date when time began to run.
Key Takeaways for Employers
The EC process can be a beneficial process for both employer and employee, often facilitating a quicker resolution of disputes without recourse to the tribunal process.
Employers now have clarity on the date by which employees must bring a claim before the ET in circumstances where there has been a prior EC process.