The company had been owned equally by Mr. Sheffield and Mr. Raison. The Raisons gained effective control of the company on the issue of shares. Mr. and Mrs. Sheffield had been employed, but after a row, she was told she would have to go. This prompted Mr Sheffield to say: ‘Well, if she goes, I go.’ The same day, Mr Raison asked Mr Sheffield how much he wanted in order to go, and was told andpound;10,000. The company could not pay all at once. Mr Raison prepared draft heads of agreement, which they discussed further, before the heads were initialed to show agreement. Mrs Sheffield then signed her ‘resignation letter’. The tribunal was asked whether Mr Sheffield’s resignation in the agreement was something which terminated the contract of employment on the initiative of Mr Sheffield, or whether, it was made from a threat that he would be dismissed if he did not resign with a result that that was a dismissal by the company notwithstanding the intermediate negotiation.
Held: He had resigned.
Arnold J said: ‘It is plain, we think, that there must exist a principle, exemplified by the four cases to which we have referred, that where an employee resigns and that resignation is determined upon by him because he prefers to resign rather than be dismissed (the alternative having been expressed to him by the employer in terms of the threat that if he does not resign he will be dismissed), the mechanics of the resignation do not cause that to be other than a dismissal. The cases do not in terms go further than that. We find the principle to be one of causation. In cases such as that we have just hypothesised, and those reported, the causation is the threat. It is the existence of the threat which causes the employee to be willing to sign, and to sign, a resignation letter or to be willing to give and to give the oral resignation. But where that willingness is brought about by other considerations and the actual causation of the resignation is no longer the threat which has been made but is the state of mind of the resigning employee, that he is willing and content to resign on the terms which he has negotiated and which are satisfactory to him, then we think there is no room for the principle to be derived from the decided cases. In such a case he resigns because he is willing to resign as a result of being offered terms which are to him satisfactory terms on which to resign. He is no longer impelled or compelled by the threat of dismissal to resign, but a new matter has come into the history, namely that he has been brought into a condition of mind in which the threat is no longer the operative factor of his decision; it has been replaced by the emergence of terms which are satisfactory. Therefore we think that the finding that Mr Sheffield had agreed to terms upon which he was prepared to agree to terminate his employment with the company – terms which were satisfactory to him – means that there is no room for the principle and that it is impossible to upset the conclusion of the Tribunal that he was not dismissed.’
Judges:
Arnold J
Citations:
[1979] ICR 396, [1979] IRLR 133
Jurisdiction:
England and Wales
Cited by:
Cited – National Westminster Bank v Utrecht-America Finance Company CA 10-May-2001
An agreement between the parties for assignment or novation of a credit agreement, contained a ‘take out’ agreement (‘TOA’). The defendant began proceedings in California to rescind the agreement, and the claimants obtained summary judgement under . .
Cited – Sandhu v Jan De Rijk Transport Ltd CA 10-May-2007
The court was asked whether the claimant had been dismissed or had resigned. He had attended a meeting to be told that his contract was to be finished. The company later complained that he had resigned when they were unable to reach a compromise on . .
Cited – Jones v Mid-Glamorgan County Council CA 13-May-1997
On being told he was to be dismissed, Mr Jones had taken early retirement. He made a claim in the County Court that his pension had been wrongly reduced, The court rejected his allegation that he had acted under duress. His subsequent claim of . .
Lists of cited by and citing cases may be incomplete.
Employment
Updated: 29 April 2022; Ref: scu.185974