Can a job termination be consensual?

In the recent case of Riley v Direct Line Insurance Group the claimant had Autism Spectrum Disorder.

He was absent from work due to this condition for several years. A return to work was attempted but was unsuccessful. Medical evidence indicated that he would never be able to return to work in his role. The claimant was informed that, under a permanent health insurance scheme called Pay Direct offered by UNUM, his salary payments would continue to be made up to retirement age if his employment ended. The claimant checked with UNUM and then agreed to this proposal. A formal termination meeting was held with him. The letter sent following this meeting referred to him having been ‘dismissed’.

The claimant brought a claim for, amongst other things, unfair and discriminatory dismissal. The tribunal found that the claimant had not been dismissed. The termination of his employment was consensual meaning that the claims of unfair and discriminatory dismissal failed.

The Employment Appeal Tribunal agreed with the tribunal’s conclusions. In particular, there was the required clear evidence of a free and consensual termination. The claimant was not tricked or coerced in any way. He participated in the discussions, was given time, and fully understood what he was doing. The existence of a letter which said the claimant was dismissed did not undermine this conclusion - the termination was agreed consensually before the letter was written.

If a simple settlement agreement had been agreed between the parties in this case at the point that the consensual agreement to terminate was reached, then this whole claim could have been avoided. A settlement agreement would have prevented the employee seeking to bring tribunal proceedings, after the event, arguing that they were ‘tricked’ and never consented in the first place. Employers who find themselves in similar situations should give serious consideration to requiring the employee to enter into a settlement agreement recording the consensual agreement between the parties.