Dismissal for refusal to agree changes to the employment contract during the pandemic was unfair


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An employment tribunal has held that a solicitor was unfairly dismissed for refusing to agree to changes to her employment contract that would have given the employer the freedom to unilaterally reduce her pay and hours to 80% (on five days' notice) or place her on furlough in Khatun v Winn Solicitors. Although there was "some other substantial reason" for her dismissal there had been a lack of meaningful consultation and a failure to reasonably consider alternatives to dismissal. 

Due to a downturn in work at the start of the Covid-19 pandemic, the firm of solicitors decided to place around half of its staff on furlough and require the remaining staff to babysit the cases of the furloughed staff.  The claimant was one of the solicitors selected to continue working.  Her head of department met with her and said that everyone would need to agree variations to their contracts, which were non-negotiable, or face likely dismissal. The contract variation was emailed to all staff the next day, with the instruction that it was to be signed and returned within 24 hours or the employees would face likely dismissal. 

The claimant replied by email to the HR Director saying that she was unwilling to agree to the variation. The Head of Department then phoned the claimant to re-iterate the firm's position. The firm's Chief Operating Officer then instructed the HR Director to terminate the claimant's employment immediately with no notice. The claimant brought a claim for unfair dismissal.

The tribunal found that the dismissal was unfair. Although there were "sound, good business reasons" for implementing the contractual variation and so the dismissal met the test for "some other substantial reason" the employer had failed to act reasonably. There had been no meaningful consultation. Although the firm argued that it did not have time to negotiate with over 300 staff members, the tribunal noted that, as all the other staff had signed, it would only have needed a meaningful discussion with the claimant. It was clear that the firm had not reasonably explored alternatives to dismissal, and it was also relevant that the firm had not offered any right of appeal. As a result of these various factors, the dismissal did not fall within the band of reasonable responses of a reasonable employer and was unfair.

Take note: This decision shows the importance of consulting, and considering reasonable alternatives to dismissal. Although the tribunal was not critical of the employer's tactic of using the threat of dismissal to get employees to sign up to the new terms, such practices have been labelled "completely unacceptable" in a recent Parliamentary debate.  The debate was held on the "fire and re-hire" tactics which have become common during the pandemic and which trade unions are currently trying to ban.

 
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