UK: Termination - employers should not describe notice pay as "ex gratia"; notice runs from day after receipt

A recent EAT case highlights the importance of taking care when drafting termination letters and, ideally, of obtaining a statutory compromise agreement to waive claims. An employer had dismissed an employee without notice where there was no pilon clause. It made a payment intended to cover notice pay, but unfortunately described this as an "ex gratia" payment in the termination letter. The EAT construed this to mean that the payment was not being made pursuant to any contractual obligation and therefore the employee was still entitled to claim damages for breach of her notice clause. (Publicis Consultants v O'Farrell, EAT)

The EAT has also confirmed that, unless an employment contract provides otherwise, notice of dismissal (whether oral or written) starts to run on the day after the working day during which it is received by the employee. This will obviously affect when the employment ends for payroll purposes and the time limits for tribunal claims. Employers wishing to include the day of receipt in the notice period need to specify this expressly in the employment contract. (Wang v University of Keele, EAT)