When does contract begin?

Mr Toon accepted a job offer which was intended to start some two months later. Around a week after the contract was signed the employers changed their mind, having decided to close that office. They paid him a week’s pay as notice for terminating the contract. The contract stated that the first three months was a trial period during which the employee’s contract could be terminated with a week’s notice; but elsewhere in the contract it said the employer had to give one month’s notice to terminate the contract in the first five years. The tribunal had to decide which of the two notice provisions applied, given that Toon had not yet started work. It decided he was entitled to a month’s notice because he had not yet started work and his employment was therefore not terminated “during the first three months”.

The EAT held that the tribunal was wrong and Toon was only entitled to a week’s notice. This is because it was an anticipatory breach of contract, meaning that the employer was indicating that it intended not to be bound by the contract in advance. On the first day that the contract came into effect the employer would have been entitled to give a week’s notice, and the letter was advance warning that that was what it was going to do.