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IMMEDIATE TERMINATION AND A NEW IMPLIED TERM

The Supreme Court has handed down its decision in Societe Generale v Geys [2012] UKSC 63. This update will look at the two most significant points from the judgment, and how the Court reached its conclusions.  By way of summary the two significant points are that:

1. A repudiation of a contract of employment by the employer which takes the form of an express and immediate dismissal does not automatically terminate the contract.  Rather, the normal contractual rule that the repudiation must be accepted by the other party applies, meaning that the contract continues in existence unless and until the employee expresses an intention to bring the contract to an end, or does something which is inconsistent with its continuation.
2. In order for an employer effectively to terminate a contract of employment pursuant to a contractual payment in lieu of notice clause, it is necessary that the employee actually receives his payment in lieu of notice and that he receive notification from his employer, in clear and unambiguous terms, that such a payment has been made and that it is made in the exercise of the contractual right to terminate the employment with immediate effect.  There is an implied term to this effect.