Covid 19 – Employee succeeds with unfair dismissal claim after refusing to agree changes

Employers may propose changes to an employee’s contract of employment at any time, but if the employee does not agree to those changes, the employer cannot unilaterally impose the terms.

However, where an employer has sound business reasons for the change, they may be able to fairly dismiss and offer re-engagement on the new terms and conditions. This will often be deemed to be ‘Some Other Substantial Reason’, which is capable of being fair, provided that the employer acts reasonably in treating this as the reason for dismissal.

When might a dismissal connected with changes to terms and conditions be unfair?

In the recent case of Ms A Khatun v Winn Solicitors Ltd: 2501492/2020, the employer had informed staff they were required to agree to give the employer the unilateral right to place them on furlough or to reduce their pay by 20%. The Claimant was informed of the requirement on 24 March 2020. When she refused to agree to the change, her employment was terminated on 26 March 2020.

The Employment Tribunal found the employer had confused the reason for dismissal with the fairness of the decision to dismissal. The Tribunal accepted that there were sound, business reasons for the decision to impose changes. However, the employer had failed to act reasonably by not consulting with the employee prior to dismissal. The Tribunal found that – in spite of the exceptional circumstances – the employer could have taken the time to discuss the requirements with her. This was particularly the case given that the vast majority of employees had agreed the changes and thus consultation would not have been particularly difficult. The Claimant had indicated, several times, that she may be prepared to agree if the employer could respond to her concerns. The Tribunal found that the employer’s failure to do so rendered the dismissal unfair.

This case highlights that – whilst an employer may well have a sound reason to terminate employment – it is important to follow as thorough a procedure as possible. It may be possible – in exceptional circumstances – to follow a less robust procedure, but Tribunals will generally expect to see at least some consultation regarding changes to terms and conditions of employment.

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Cartwright King has lawyers in many areas of law, and the information we are sharing has been written by Head of Employment Law Martin Cornforth.

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